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Insurance Schemes

51. It is mandatory for employers to insure all foreign workers employed. However,
stakeholder complaints have highlighted the unnecessary expense stemming from multiple
insurance schemes with multiple insurance providers (26 insurance providers). They suggest
that insurance requirements may be subsumed into one package to be competitively provided
by the appointed insurance provider.

52. Current insurance provisions must go through an appointed third party service
provider - Skim Perlindungan Insurans Kesihatan Pekerja Asing (SPIKPA). They direct
coverage network for foreign workers’ health care needs together with provision of
hospitalization benefits. However the Insurance Scheme does not cover for nonhospitalisation
treatment. It has been asserted that the premium cost is unduly high and the
RM20,000 overall coverage annual limit is insufficient to meet a major medical emergency.
A second insurance scheme as required under section 26(2) of the Workmen Compensation
Act 1952 is the Foreign Worker Compensation Scheme. This is for protection of foreign
workers for employment workplace injury and but it is unclear if injury sustained outside the
workplace is sufficiently covered.

Human smuggling and trafficking

53. Malaysian law prohibits all forms of human smuggling and trafficking. Malaysia has
enacted the Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007.
Nevertheless, enforcement actions to detect and punish criminals engaged in human
smuggling or trafficking have not been pursued with conviction and determination. For
example, investigators have discovered in 2015 illegal migrant camps and burial ground for
deceased migrants on the border with Thailand which have implicated both federal and state
enforcement officials as well as local government authorities. However, none of the
perpetrators have been brought to book and further progress on prosecution appeared to have
stalled.

54. The majority of human smuggling and trafficking victims are from Indonesia, India,
Bangladesh, Myanmar and China. As described above, these victims of human smuggling or
trafficking are likely to be undocumented workers subject to forced labour from debt bondage
at the hands of their employer, employment agent or informal labour recruiters.

55. Reflecting this reality on the ground, Malaysia had been placed on the Tier 2 Watch
List nine times in the period 2006 to2018 based on the annual United States State Department:
Trafficking in Person Reports.

Forced Labour Issues

56. The International Labour Organisation defines forced labour as work that is
performed involuntarily and under the menace of any penalty. (ILO Forced Labour
Convention 1930) (No: 29). It refers to situations in which persons are coerced to work
through the use of violence or intimidation, or by more subtle means such as manipulated
debt, retention of identity papers or threats of denunciation to immigration authorities.

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