Unique-Dyson dumps Malaysian provider ATA over labour considerations By Reuters

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© Reuters. FILE PHOTO: A Dyson logo is seen on 5th Avenue in New York, New York, the United States, March 19, 2019. REUTERS / Carlo Allegri / File Photo

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By A. Ananthalakshmi

KUALA LUMPUR (Reuters) – Dyson has ended its relationship with supplier ATA IMS Bhd after an audit of the Malaysian company’s labor practices and allegations of a whistleblower, Reuters, famous for its high-tech vacuum cleaners, said.

ATA, which is already under investigation by the US on charges of forced labor, did not have an immediate response. She has previously denied such allegations.

Shares in ATA, which makes parts for Dyson’s vacuum cleaners and air purifiers, fell 30% to their lowest level since April 2020, according to the Reuters report. Dyson accounts for nearly 80% of its sales, according to ATA.

The dismissal is also a severe blow to Malaysia, a major electronics manufacturing center that was scrutinized this year for the exploitation of foreigners who make up a large proportion of factory workers.

Privately owned by British billionaire James Dyson, Dyson said it received the results of a working conditions review at ATA in early October. It said it learned of allegations from a whistleblower at an ATA factory in September and hired a law firm to investigate those allegations.

“Despite intensive engagement in the past six weeks, we have not seen sufficient progress and have already removed some production lines,” Dyson, headquartered in Singapore, said in a statement to Reuters. “We have now terminated our relationship with a six-month notice period. We hope that this gives the ATA impetus for improvement and enables an orderly exit in the interests of the employees.”

ATA dismissed allegations of forced labor in its factories in May after a prominent human rights activist said US authorities were investigating the company’s labor practices.

Activist Andy Hall shared a letter from the U.S. Customs and Border Protection (CBP) stating that he had agreed to investigate an ATA unit after reporting complaints from workers.

The CBP did not comment on the investigation.

The CBP has banned six Malaysian companies from selling their products in the US in the past two years after finding evidence of forced labor.

In July, the U.S. State Department put Malaysia on a list of more than a dozen countries, including China and North Korea, and said it had made no progress in eliminating trafficking in human beings.

Most of the migrant workers in Malaysia are from Bangladesh and Nepal and are employed in factories, plantations and construction sites.

ATA posted record sales and earnings for the fiscal year ended March 2021 as COVID-19 induced lockdowns fueled demand for household appliances like the Dyson stick vacuum.

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