| KUALA LUMPUR
KUALA LUMPUR Malaysian police have arrested 42 men after a riot by up to 1,000 mostly Nepalese workers sparked fires and destroyed parts of an electronics export factory, highlighting accusations of poor conditions for many of the estimated four million foreign workers in the Southeast Asian country.
The riot broke out in the southern industrial hub of Johor state on Tuesday at a factory run by JCY International (JCYI.KL), a Malaysian firm that makes parts for electronic giants including Samsung SAGR.UL, Hitachi (6501.T) and Western Digital (WDC.O).
Workers had accused the firm of negligence after an employee at a nearby JCY factory died last Thursday after complaining of chest pains, according to local news reports.
The unrest spilled over to the firm's other factory in Kulaijaya, police said, culminating in a stand-off between riot police and protesters. The factory suspended operations on Wednesday.
"This was caused by a misunderstanding between the employer and employees over the terms of their work," the district's deputy police chief, Mohad Idris Samsuri, told Reuters.
Those arrested would be charged under the anti-rioting law, he said.
JCY, which specializes in manufacturing parts for hard disk drives, issued a statement to the stock exchange saying that the unrest would not impact its business.
"The company is currently taking active steps and measures to address the above matter and to reach an amicable settlement with the workers," it said.
Malaysia's record on treating foreign workers is under scrutiny after the U.S State Department downgraded the country in June to Tier 3 in its 2014 Trafficking in Persons Report, triggering potential sanctions. The report cited widespread problems of forced labor and a lack of enforcement by the authorities as major reasons for the downgrade.
Malaysia's large electronics, plantation and construction industries rely heavily on unskilled foreign labor from countries such as Indonesia, Bangladesh and Nepal.
The immigrants often arrive in Malaysia heavily in debt after paying high fees to labor agencies and are commonly given substantially lower salaries and even different jobs to the ones they were promised, according to studies by advocacy groups.
Verite, a non-profit organization that deals with labor issues, says companies commonly withhold workers' passports and have poor health and safety practices.In 2010, over 5,000 foreign workers protested against JCY after a similar incident when a Nepalese employee died from a high fever. Workers had alleged that the management was slow in sending the employee to hospital.
Last week, three Bangladeshi workers died when a 300-tonne concrete section fell on them at a railway construction site line in Kuala Lumpur.
(Reporting By Trinna Leong; Editing by Stuart Grudgings)