Hartalega sets aside RM40m for reimbursement of recruitment fees

PETALING JAYA: Hartalega Holdings Bhd is set to reimburse up to RM40 million in recruitment fees previously paid by migrant workers to employment agents during its recruitment process.

Its CEO, Kuan Mun Leong, stressed that the group is committed towards enhancing its social compliance policies in line with international benchmarks and the fee reimbursement is part of that commitment.

“This follows our previous zero recruitment cost policy instituted in April 2019, to protect the welfare of migrant workers and ensure that they are free from any recruitment costs,” he said in a statement.

Kuan acknowledged the recruitment fee paid to third parties by migrant workers is a complex global issue, which requires multi-stakeholder involvement to reach a solution as it is a shared responsibility. To overcome this issue it has engaged multiple stakeholders over the past year to find a solution.

“Towards the later part of 2019, we made the decision to remediate migrant workers who joined us prior to our Zero Recruitment Cost policy,” he said.

To address that, Hartalega appointed a third-party non-profit organisation with a proven track record in social compliance and recruitment fee remediation to conduct interviews with affected workers, earlier this year. Subsequently, the interviews concluded in June despite a delay due to the movement control order (MCO).

Kuan has set a target for the remediation to begin by the fourth quarter of 2020 and it will be completed over a span of up to 24 months. “Meanwhile, we are working with another external independent party to review our remediation plan,” he said.

Separately, the group disclosed that it has accepted an offer by Kumpulan Tanjung Balai Sdn Bhd for the proposed acquisition of a 60.57 acre sub-divisional portion of land for a purchase consideration of RM158.31 million in Sepang, Selangor, via its wholly owned subsidiary, Hartalega NGC Sdn Bhd.

It said the proposed acquisition will be financed with internally generated funds and/or existing credit facilities.

Hartalega said the acquisition is in line with the upsurge in demand of medical gloves across the globe due to the Covid-19 pandemic, which has created a higher safety and hygiene awareness across all industries.

Furthermore, it said, the land is located adjacent to its existing NGC Sepang facility, which is undergoing an expansion scheduled to be completed by 2021, which will increase its annual capacity to 44 billion pieces.

Additional glove manufacturing facilities will be built on the land, which will see an extra installed capacity of 19 billion pieces annually. Together with a previous acquisition of 95 acres in Banting, Selangor, Hartalega projected that its annual installed capacity will increase to 95 billion pieces upon completion by 2027.

source https://www.thesundaily.my/business/hartalega-sets-aside-rm40m-for-reimbursement-of-recruitment-fees-YY3405735