PETALING JAYA - The United States has downgraded Malaysia to the lowest ranking in its annual human trafficking report, to the same category as Zimbabwe, North Korea and Saudi Arabia.
According to the latest Trafficking in Persons (TiP) Report - which ranks 188 nations according to their willingness and efforts to combat trafficking, and is considered the benchmark for global anti-trafficking commitment - trafficking victims are thought to comprise the majority of Malaysia's estimated two million illegal migrant labourers.
Many of the victims are migrants who have willingly come to Malaysia from neighbouring countries like Indonesia, Myanmar, Cambodia and Bangladesh, attracted by Malaysia's large supply of jobs and high regional wages, it said.
The report said that once in Malaysia, they fall prey to forced labour at the hands of their employers, recruitment companies or organised crime syndicates, who refuse payment, withhold their documents or force them into indentured servitude.
It said that while Malaysia has increased its preventative efforts against trafficking via public service announcements, there were fewer identifications of trafficking victims, fewer prosecutions and fewer convictions this year than in 2012.
The US downgrade could result in economic sanctions and loss of development aid, the report said.
Malaysia's relegation to Tier 3 in the US State Department's TiP report published yesterday indicates that the country had failed to comply with basic international requirements to prevent trafficking and protect victims within its borders, it said.
Authorities not only failed to investigate cases brought to them by NGOs, they also failed to recognise victims or indications of trafficking, and instead treated cases as immigration violations, it said.
Some immigration officials were also accused of being involved in the smuggling of trafficking victims, yet the Government did not investigate any such potential individuals or cases.
The Guardian of London reported that the downgrade could be seen as a considerable blow to Malaysia's image and is sure to strain diplomatic relations.
Malaysia is a strategic US partner in President Barack Obama's "pivot" to the east, with the United States serving as Malaysia's largest foreign investor and fourth-largest trading partner.
The downgrade could also spell restrictions on US foreign assistance and access to institutions like the World Bank and International Monetary Fund.
However, such moves can be waived under national security considerations, The Guardian said.