YTY Group Issues Statement on Social Compliance

Friday, November 8, 2019

Given the increasing public review and commentary on the topic of social compliance as it relates to manufacturers of single-use Examination and Surgical gloves, YTY Group, as a large and long-standing member of this industry, has felt it necessary to clarify our position on this important topic. It is our hope that through this statement we provide guidance on our social compliance policies and practices, and the future direction we seek to take on this matter. Additionally, in speaking candidly about social compliance, we hope the seriousness of our intent, and the progress we have made, and continue to make, is recognized.

While the definition of “social compliance” is broad and multi-dimensional, for us, social compliance speaks to the notion of how a business treats its employees, the environment, and the primary stakeholders it engages with, such as suppliers and customers. With respect to our employees, there is a particular constituency that receives special attention, which is foreign workers, given the large number of foreign workers our industry employs as a whole. These workers originate from neighbouring countries, and stay in Malaysia for an extended period of time so as to earn wages higher than what they would likely earn in their home country.

For YTY Group, there are four areas that are particularly relevant in respect of the treatment of foreign workers, which collectively form an integral part of our social compliance policy framework:

It is a clear policy of YTY Group to not charge foreign workers any recruitment fees. In addition, we do not condone, nor knowingly work with, any local recruitment agencies who impose any unreasonable fees themselves. We are aware that certain local and foreign agents charge unreasonable recruitment fees to foreign workers, and we strictly discourage this practice. We are further tightening our recruitment procedures to obtain written confirmation from all local and foreign agencies involved in our recruitment efforts that no unreasonable recruitment fees are being imposed on foreign workers, and that they are willing to be audited on this point to confirm compliance.

The guidelines set forth by Malaysia’s Employment Act are clear on the permissible number of hours an employee can work each week, and the need for a compulsory rest day in this period. YTY Group is focused on ensuring compliance with these provisions even though foreign workers routinely request to work extended hours so as to be able to earn a higher wage. We do not practice any forced overtime; all overtime that is legally permissible is arranged on a voluntary basis and compensated in accordance with the prevailing regulations.

YTY Group not only permits, but requires, foreign workers to retain their own passport at all times. We do not hold the passports of any foreign workers other than for routine processing matters. In addition, we allow for freedom of movement within our premises, but also into and out of our facilities. All foreign workers have a designated break in each shift they are obligated to take, and are free to leave the factory premises when they have completed their work.

Foreign workers are provided accommodation in hostels that we either own ourselves, or which we have rented from third-party providers. Our focus on foreign worker welfare, therefore, extends beyond the factory premises and into the hostels in which they reside. We routinely monitor the security, cleanliness and house-keeping within the hostels to ensure a safe and comfortable standard of care is provided. In addition, we are actively taking a number of steps to ensure compliance with the updated Department of Labor (JTKSM) guidelines around worker housing.

YTY has long valued the contribution of all its employees irrespective of nationality, race, religion, gender or educational background. Foreign workers, in particular, have played an important role in our growth and success, and we are grateful for their contributions. Beyond the measures noted above, we have institutionalized several initiatives for foreign worker well-being which include, but are not limited to providing clean canteen conditions and subsidized food, free transportation, free health check-ups, cash awards for ideas leading to business improvement, long-term employment, annual bonuses, and recognition for high-performers. We also have a formal Foreign Worker Committee, comprised of representatives from each foreign worker ethnic group and senior officials from the company, which meets regularly to discuss matters relating to foreign worker welfare. In short, we view ourselves to be an inclusive employer, and one who has consistently taken a number of measures to treat foreign workers with dignity and respect.

YTY Group has well-documented policies, guidelines, SOP’s and a Code of Conduct, all of which are periodically reviewed and updated in line with changes to prevailing local laws, feedback from stakeholders, and industry best practices. Additionally, we allow ourselves to be audited against the most comprehensive of social compliance standards, both on the request of our customers but also proactively, and on a voluntary basis. To this end, we are pleased to note that we are the first, and to date only, company in our industry to receive the coveted Worldwide Responsible Accredited Production (WRAP) accreditation, and as part of that achievement, obtained a “Gold” rating, which is the highest rating within the framework. Additionally, we have received a Business Social Compliance Initiative (BSCI) rating of “A” in a recently concluded 2019 audit, which is also the highest classification possible. Both industry-leading recognitions have been awarded to Medisafe Technologies, a wholly-owned subsidiary, and is indicative of the philosophy we adopt as a Group towards maintaining the highest standards of social compliance, environmental responsibility and worker welfare.

Despite these recognitions, and the numerous steps we have taken in our business to enhance social compliance over the years, we believe we can and should do more. Our focus, therefore, is to remain an industry leader in respect of the approach we take and the accreditations we seek to attain, to raise the bar on the social compliance standards we, as a Group, aspire to, and to ensure that we achieve these elevated standards in a practical and progressive manner. To this end, we continue to partner with respected, independent audit agencies to obtain feedback on areas relating to social compliance within our operations which we can further enhance and, as evidence of this, are in the midst of a Sedex Members’ Ethical Trade Audit (SMETA) review, which we expect to complete in December 2019.

YTY Group does, and will continue to operate, our business with the highest regard for our employees, irrespective of whether those employees are local or foreign. Moreover, as an active member of the Malaysian Rubber Glove Manufacturer’s Association (MARGMA), the industry tradebody, we remain committed to raising social compliance standards within our industry, especially in the light of recent controversy.

If you have any questions on YTY Group’s approach to social compliance, you are welcome to get in touch with Ravi Ragunathan, Vice President, Human Resources, via email.