British home appliance maker Dyson has cut ties with Malaysian supplier ATA IMS, following an audit that revealed red flags about the company’s labour practices, as well as allegations from a whistleblower.
ATA confirmed that Dyson had terminated its contract with the parts supplier. This is a huge blow for the company, considering that the British brand made up 80% of ATA’s revenue, which also sent its share prices plunging. With a six month contractual notice, the contract termination will go into effect on 1 June 2022.
Dyson said that it found out about the audit results in October, and also learned of allegations about “unacceptable action” from a whistleblower in September. ATA had earlier been accused of using forced labour practices by worker rights specialist Andy Hall, including unethical recruitment practices and inadequate working and living conditions.
The allegations sparked an investigation by the US Customs and Border Protection, but ATA denied these claims. Hall said that he had regularly informed Dyson of his concerns since 2019, but has received minimal response.
Seven current and former ATA employees told Reuters about excessive working hours and debt bondage practices. One former employee said that in June, he was taken to a police station by ATA officials and was questioned about supplying activists with information regarding the factory’s working conditions. He also claims to have been beaten by the police after the questioning.
ATA said that it had hired consultants to review and verify Dyson’s audit, and also appointed a Malaysian law firm to conduct an independent review of allegations of physical abuse by the former worker. The firm added that the findings will be finalised soon, but preliminary findings “indicates that the allegations may be unjustified.”