Companies at risk if neglect human rights issues - KPMG
Legal actions and sanctions against companies over human rights issues are increasing worldwide, and KPMG cautions Malaysian companies to wake up to this risk before it's too late.
A check of the Withhold Release Orders (WRO) list issued by the US Customs and Border Protection (CBP) included four companies from Malaysia as of December 2020: Sime Darby Plantation Bhd, FGV Holdings Bhd, Top Glove Sdn Bhd and TG Medical Sdn Bhd. The WRO effectively prevents imported goods from entering the US if suspected to be produced by forced labor. Based on the updated active list, Malaysia currently has the second highest number of companies in the WRO - second only to China.
KPMG's Governance and Sustainability advisory unit executive director Phang Oy Cheng commented: "For unprepared companies, receiving a WRO or import sanction can be costly not least for the impact to the company's future earnings.Failure to identify and respond to human rights issues will lead to costly and disruptive legal actions, cause investor divestment, negative publicity, reputation damage and significant financial loss. "The damages cause by poor human rights risk management have a perpetual effect that will take companies tremendous effort and resources to repair."
© 2022 KPMG PLT, a limited liability partnership established under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.