Shimano has allegedly sold components produced by ‘modern slaves’ following a fluctuation in operations around the Covid pandemic, according to an investigation by The Telegraph.
The Japanese company sources components from a Malaysian supplier - Kwang Li Industry - that has been accused of exploiting migrant workers from Nepal.
Workers at the factory say that they have been subject to physical abuse and threats, unlawful salary deductions and recruitment fees, and unpaid suspension.
Responding to the allegations, Shimano has launched an investigation into Kwang Li Industry, and told The Telegraph that it was “currently investigating the matter with the relevant parties”, adding that it would “use appropriate action to ensure the situation is resolved.”
Kwang Li Industry strongly denies the allegations.
The Telegraph’s investigation included interviews with existing and former workers at the factory, analysis of payslips, contracts and correspondence between Kwang Li Industry and Nepal’s embassy in Malaysia.
The investigation by the paper alleges that whilst Shimano saw bumper profits due to a boom in demand during the Covid pandemic - with a record sales increase of 44 per cent in 2021 - its factory increased operations, instructing a Nepalese recruitment agency to find workers.
It is alleged that whilst the factory agreed to pay recruitment fees for these workers, the workers themselves have been forced to pick up the cost - which covered medical screening, flight tickets and more - but their salary, below Malaysia’s monthly minimum wage, left them unable to do so.
As has been well documented across the cycling industry, a subsequent decrease in sales followed the boom. At this point, workers allege that they were subject to illegal monthly reductions in wages, unpaid suspensions lasting up to 15 days, threats of deportation if targets were not met, physical violence and forced resignation.
A spokesperson for Shimano told The Telegraph: "This is a serious accusation, and it stands against what we believe in at Shimano. We are currently investigating the matter with the relevant parties and will use appropriate action to ensure the situation is resolved."
A spokesperson for Kwang Li Industry told the paper: “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.
“We wish to state that our company has adhere[d] to all the requirement and regulation of the labour law in Malaysia, which governs various aspects of employment, including working hours, minimum wage, and other related matters.”
Cycling Weekly has approached Shimano and Kwang Li Industry for additional comment and will update this story if this is provided.
Earlier this year, Shimano recalled as many as 760,000 cranks, after reports of failures resulting in injury. The recall applied in the USA and Canada, with an inspection programme being launched in Europe.
At the time, Thomas Jervis, a partner at Leigh Day solicitors who specializes in product liability, told Cycling Weekly that this was a "very unusual approach to corrective action".
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