PMARKET equipment maker Dyson today severed its partnership with a major supplier accused of “unacceptable” labor practices at its Far East factories.
The privately owned firm of British billionaire James Dyson has concluded a contract with Malaysia’s ATA IMS, which makes parts for its high-end vacuum cleaners and air purifiers.
The move comes at a time when the ATA is reportedly facing investigation by US authorities into allegations of forced labor made by a whistleblower earlier this year.
Dyson later launched an audit into the supplier’s practices that reported its findings last month.
Dyson, which is headquartered in Singapore, said: “Despite intense engagement over the past six weeks, we have not seen substantial progress.
“We have now terminated our relationship with six months contract notice. We hope this gives the impetus to reform the ATA, and enables a systematic return to the interests of workers who are employed.
Shares of ATA fell 30% on the Kuala Lumpur exchange. Bin bases, battery covers, brush bars and other parts for Dyson’s appliances account for about 80% of its revenue.
The move comes as a major blow to Malaysia, where manufacturers face scrutiny over claims of excessive hours and cramped living conditions for migrant workers from Bangladesh and Nepal.
The ATA has previously denied allegations of forced labor in factories. According to the latest figures, more than half of its 8,000 employees are foreigners.
It posted record revenue and profit for the year ended March 2021 as the Covid-induced lockdown boosted demand for home appliances such as Dyson’s stick vacuum cleaners.
In a filing to the National Stock Exchange, the company said today that it was in talks with Dyson on the findings of the audit, and had appointed advisors to review them.
Nepal-based labor rights activist Andy Hall told Reuters that Dyson’s decision would have a “huge impact” on thousands of workers.
A Dyson spokesperson said the firm “demands the high standards of third-party companies operating in the supply chain, and we take immediate action where we see deviations from our strong global wellness standards”.