Electronics majors Samsung and Panasonic are accused of exploiting and underpaying Nepalese workers in their supply chains in Malaysia. The workers said that they had been deceived about pay and their passports had also been confiscated.
According to an investigation by the Guardian, the workers were told that they must pay large fines if they wanted to return to Nepal before the end of their contract. They were even forced to work for up to 14 hours, with restricted toilet breaks.
Reacting to the news, both the companies have launched probes into the serious allegations made by the workers.
Guardian spoke to as many as 30 Nepalese migrants, who work for Samsung and Panasonic.
While some of Samsung's workers were employed by the company, majority of them were hired through a labour supply firm.
The workers for Panasonic are employed by subcontracting firms.
While both Panasonic and Samsung forbid their suppliers from confiscating passports or charging migrant workers recruitment fees, those interviewed by the news paper claimed they had to pay up to £1,000 to recruitment agents in Nepal to secure their jobs.
In response to the allegations a Samsung spokesperson Samsung said, "As a committed member of the Electronics Industry Citizenship Coalition (EICC), we comply fully with the EICC's Code of Conduct and have found no evidence of violations in the hiring process of migrant workers hired directly by our manufacturing facility in Malaysia."
"We are currently conducting on-site investigations of labour supply companies we work with in Malaysia and the migrant employees hired by these companies. If any violations are uncovered, we will make immediate corrective actions and moving forward we will suspend our business with companies that are found to be in violation."
Panasonic in a statement told Guardian: "Panasonic will conduct a full investigation into the claims made by the Guardian. We are taking these allegations very seriously and if, in fact, we discover that one of our suppliers has violated such laws or regulations, we will ensure and require them to take necessary corrective action immediately.
"We expect all of our suppliers to strictly comply with our CSR [Corporate Social Responsibility] policy and declaration. These expectations are outlined in Panasonic's contracted terms and conditions with each supplier. We do not tolerate breaches of these terms."
Earlier this year Samsung along with other tech firms such as Apple, Sony and Microsoft were accused of using cobalt mined by child labourers in Congo. Amnesty International also said the companies had failed to carry out basic checks on the source of the materials used in their products.