A bombshell story from a U.K. newspaper this week has accused one of the world’s most recognized bicycle companies of producing parts through the exploitation of migrant workers.
Shimano, the world-famous Japanese manufacturer of cycling components, has come under scrutiny following an investigation by The Telegraph. The paper revealed allegations of the company’s involvement in sourcing components from a Malaysian supplier that abused Nepalese workers.
Conditions for the migrant workers resemble “modern slavery,” according to Andy Hall, a British labor rights specialist who reviewed the newspaper’s reporting. The investigation claimed to find disturbing practices in Shimano’s supply chain amid fluctuations tied to the COVID-19 pandemic.
In a response shared with GearJunkie on Friday, Shimano said it’s looking into the allegations.
“This is a serious accusation, and it stands against what we believe in at Shimano,” a spokesperson said. “We are currently investigating the matter with the relevant parties and will use appropriate action to ensure the situation is resolved.”
The Telegraph: Malaysian Supplier Abused Workers
Shimano has long used components sourced from Kwang Li Industry, a Malaysian supplier now accused of subjecting workers, predominantly migrants from Nepal, to harrowing conditions, The Telegraph reported. Workers at the Kwang Li Industry factory reportedly endured physical abuse, threats, unlawful salary deductions, recruitment fees, and unpaid suspensions, according to the investigation.
Meanwhile, Kwang Li Industry didn’t mince words in its response to the findings.
“We vehemently deny all the false allegations made against us … this includes but not limited to the allegations of physical abuse and threats, illegal salary deductions and recruitment fees, and unpaid suspensions,” a Kwang Li spokesperson told the paper.
The Telegraph’s investigation drew from interviews with current and former Kwang Li Industry employees, detailed analysis of pay slips, contracts, and correspondence between the supplier and Nepal’s embassy in Malaysia.
The investigation suggests that Shimano reaped substantial profits during the COVID-19 pandemic, experiencing a record-breaking 44% surge in sales in 2021. To meet the heightened demand, Shimano’s factory reportedly ramped up operations, prompting the engagement of a Nepalese recruitment agency to source workers.
Allegedly, while the factory agreed to cover recruitment fees, these expenses were offloaded onto the workers, including costs for medical screening and flight tickets. With salaries falling below Malaysia’s monthly minimum wage, workers could not cover these expenditures.
As the cycling industry experienced a subsequent downturn in sales, the situation worsened for the factory’s employees. They claim to have endured illegal monthly wage reductions, unpaid suspensions of up to 15 days, threats of deportation for failing to meet targets, physical violence, and forced resignations.
GearJunkie reached out to Shimano for more information. Stay tuned as this story develops.