An investigation by The Telegraph has resulted in allegations of modern slavery made against Kwang Li Industry, a Malaysian supplier to Shimano, the world’s largest manufacturer of bicycle componentry.
The investigation included interviews with current and former factory workers, salary and contract analysis, and correspondence with the Nepali Embassy in Malaysia.
It alleges that migrant Nepalese workers employed in a factory in Malaysia producing parts for Shimano have faced a series of unfair working practices. These include salary deductions, pay below minimum wage, recruitment fees tied to the worker's employment set up as high interest loans, confiscation of passports, and even physical abuse.
It appears, if the allegations are correct, that the recruitment of migrant workers stems from a desire to meet the growing demand for bikes, and therefore bicycle components during and after the Covid-19 pandemic. Similar practices were reportedly also rife in Malaysia’s rubber glove factories. With production unable to keep pace with demand, factory owners looked to bring in cheap labour from Nepal and Bangladesh.
The issue then arises that, during the well-documented downturn in the bicycle industry (a downturn that left Shimano profits down 40% in the first half of 2023), these imported workers are left to pick up their own costs, violating labour laws.
These added costs imparted onto the workers includes the cost of recruitment, medical screening and flight tickets. This was then compounded by the alleged introduction of wage-theft policies, including reductions in monthly wages, and unpaid suspensions lasting up to 15 days.
What’s more it appears that if targets were not met then threats of deportation, physical violence, and forced resignation were also utilised.
Shimano is investigating the matter, telling The Telegraph “This is a serious accusation and it stands against what we believe in at Shimano. We are currently investigating the matter with the relevant parties and will use appropriate action to ensure the situation is resolved.”
In a similar vein, Kwang Li Industry strenuously denies any allegations: “We vehemently deny all the false allegations made against us ... this includes but not limited to the allegations of physical abuse and threats, illegal salary deductions and recruitment fees, and unpaid suspensions.
“We wish to state that our company has adhere [sic] to all the requirement and regulation of the labour law in Malaysia, which governs various aspects of employment, including working hours, minimum wage, and other related matters.”
This marks the end of a tumultuous year for Shimano, one in which is posted a drastic reduction in its profits amid a global shrinking of the bicycle market, followed by its high-profile recall of over two million crankset and more recent vulnerability to a ransomware attack, which saw the hackers leak sensitive company files.
Cyclingnews has reached out to Shimano for comment.
