Dyson Terminates Deal With Malaysian Supplier Over Forced Labor

Malaysia's ATA IMS Bhd said on Monday that findings of forced labor allegations in a recent audit by its biggest customer Dyson were not conclusive but admitted the impact of Dyson's contract termination would be significant.

Photo Insert: Dyson founder, renowned inventor James Dyson

High-tech home appliance maker Dyson told Reuters last week it was ending its contract with ATA, which derives 80% of its revenue from the firm, after an audit of the company's labor practices and allegations by a whistleblower.

Dyson did not disclose the audit findings but ATA, which makes parts for Dyson vacuum cleaners and air purifiers, had said the audits found forced labor allegations, which it viewed seriously, Reuters reported.

On Monday, ATA said in a statement it only received a summary of the audit and that auditors said they were unable to "conclusively determine whether all allegations are true or false."

The audit summary alleged poor living conditions, issues regarding zero-recruitment fees for foreign migrant workers, unethical recruitment practices by agents, use of irregular workers, concerns of retaliation, unpaid allowances and bonuses during COVID-19 in 2020, and unlawful deductions for meals, ATA said.

"The company reiterates that it takes the forced labor allegations seriously and had engaged professional advisers to assist the company to review, verify and validate the audit findings," ATA said.

ATA said it would see revenue drop by 30% in its 2022 financial year and by 40% in 2023, following the Dyson contract termination. The company expects to undertake cost-cutting measures in response to the termination of the Dyson contract, it said.

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