MAJOR BRAND COMMITS TO RESPECT LABOUR RIGHTS OF SECURITY GUARDS

IKEA Malaysia cuts its ties with private security contractor over recruitment fee payments and labour policy breaches. 

Keywords: certification, private security, training programmes, human rights, due diligence, client, working conditions  

Background

It is well-documented that third-country nationals (TCNs) are frequently subjected to illegal recruitment practices, including deceptive hiring, trafficking and forced labour. In the private security sector, contractors often use local recruitment agents that target vulnerable and poor workers. Agents charge prospective third-country nationals ‘workers recruiting fees,’ leading to increased risk of debt. Moreover, agents often withhold information on the location and conditions of employment. These practices are hallmarks of forced labour. Hence, it is important for companies to properly acknowledge such illegal recruitment practices and ensure they comply with their corporate responsibilities and human rights obligations set forth by the Guiding Principles for Business and Human Rights.   

Since 2022, IKEA updated its Inter IKEA Group policy on human rights, which materialised after an Inter IKEA Group-wide human rights baseline assessment which was subsequently cleared by the Management Board. The policy underscores IKEA’s commitment to respecting international human rights standards in its areas of operation. It emphasises embedding human rights considerations throughout the company’s activities and decisions. This involves proactively identifying potential human rights impacts, addressing any negative impacts and maintaining transparency and accountability.  

Good Practice

In Malaysia, IKEA stores severed ties with a private security provider after an investigation allegedly revealed a breach of IKEA’s own labour policies. The investigation allegedly disclosed that “many” security guards in IKEA’s Malaysian stores had paid recruitment fees to secure their positions. It was reported that these mostly Nepali workers paid fees as high as $1,000, and “multiple layers of sub agents [were] involved in the process in rural villages…” Subsequently, Ikano, the company that runs IKEA stores in Malaysia, secured a new supplier that recruited workers directly, instead of using subcontractors. Ikano also stated that it would conduct follow-up audits. Finally, Ikano explained that the incident had been reported to local authorities and the Nepalese embassy.  

Inter IKEA Group has acknowledged the various human rights risks when it comes to recruiting migrant workers, including high recruitment fees that migrant workers frequently pay. In response to this risk, IKEA completed projects to map their labour supply chains and highlight the risks associated with migrant worker recruitment.  

As a result of the risks associated with migrant worker recruitment, IKEA developed Guidelines on Responsible Recruitment, which aim to build the “understanding and ability of suppliers to responsibly manage the recruitment of migrant workers.” IKEA has since emphasised that they aim to improve and strengthen their dialogue with their suppliers while addressing key topics including working hours, fundamental labour rights and responsible recruitment of migrant workers to respect their human rights due diligence commitments.  

Corporate Ethics

IKEA developed Guidelines on Responsible Recruitment, which aim to build the “understanding and ability of suppliers to responsibly manage the recruitment of migrant workers.” IKEA is committed to eliminate worker-paid recruitment fees as shown by their stark decision in Malaysia to terminate their relationship with the private security contractor. The Swedish Company is co-founder of the Leadership Group for Responsible Recruitment chaired by the Institute for Human Rights and Business. This group works to eradicate worker-paid recruitment fees by following the “Employer Pays” principle aligned with the UN Sustainable Development Goal of decent work for all. IKEA expressly stated that they “strongly believe that migrant workers should be treated with respect” and they have therefore “committed to advocate for this goal more widely, with governments, businesses and other relevant organizations, and continue to look for ways to assist and support migrant workers.”  

Additionally, IKEA developed an introductory course on human rights and due diligence for all Inter IKEA Group co-workers during the 2022 Fiscal Year. More training programmes were created in collaboration with the International Organization for Migration for IKEA employees and business partners in Thailand, Vietnam, Malaysia, Philippines, Singapore and Australia. The programmes cover international standards, national laws, methods for taking action against unfair treatment and labour exploitation.

The International Code of Conduct

The International Code of Conduct prohibits Member and Affiliate companies from engaging in the trafficking of persons and requires their personnel to report any instances of trafficking to competent authorities. The International Code of Conduct defines human trafficking, in this context, as the recruitment, harbouring, transportation, provision, or obtaining of a person for labour or services through the use of force, fraud, or coercion for the purposes of subjection to involuntary servitude, debt bondage, or slavery.  

Furthermore, the International Code of Conduct prohibits Member and Affiliate Companies from using slavery, forced or compulsory labour, or to be complicit in any other entity´s use of such labour. 

Member and Affiliate companies of the International Code of Conduct Association (ICoCA) commit to the responsible provision of Security Services to support the rule of law, respect the human rights of all persons, and protect the interests of their clients.  

By joining ICoCA, the Member and Affiliate Companies affirm that they have a responsibility to respect the human rights of, and fulfil humanitarian responsibilities towards, all those affected by their business activities, including personnel, clients, suppliers, shareholders, and the population of the area in which services are provided. Furthermore, clients could also require that their security providers are ICoCA certified.  

Disclaimer 

The case map intends to promote conversations on the responsible provision of private security services, by providing a selection that shows on the one hand cases of abuses by private security companies, and on the other, cases of good practice. The case map exists to inform and provide a representation of selected incidents as well as good practices in the field of private security.  

The descriptions of the cases reproduced here are not intended to represent opinions or advertisements of the ICoCA or the authors. In cases where the practices of private security providers are presented as responsible, this should not be interpreted as legitimising any potential human rights violations that may have occurred. Similarly, the inclusion of certain cases does not imply that the ICoCA or authors endorse the conduct of any private security companies that have engaged in human rights abuses or violations. 

Sources

• Victims of Complacency – The Ongoing Trafficking and Abuse of Third Country Nationals by U.S. Government Contractors
• Malaysia: IKEA terminates relationship with security provider over recruitment fees paid by Nepali guards | Business & Human Rights Resource Centre  
• Ikea cuts ties with security services supplier over labour policy breach |Financial Times  
• Ikea cuts ties with security services supplier over labour policy breach | Irish Times  
• Protecting Migrant Workers | IKEA
• The Inter IKEA Group approach to human rights due diligence | IKEA  
• The Employer Pays Principle | Institute for Human Rights and Business 

This case was prepared by Anyssa Boyer, Graduate Institute of International and Development Studies. 

Disclaimer

As per the Disclaimer on the homepage, neither the International Code of Conduct Association nor any authors can be identified with any opinions expressed in the text of or sources included in The International Code of Conduct Case Map.