Following an internal inquiry that discovered a violation of the furniture retailer's own regulations, Ikea stores in Malaysia severed connections with a labour provider.
Investigations by the retailer revealed that numerous security officers in IKEA's Malaysian stores had been forced to pay money to secure their positions. According to communications reviewed by the Financial Times, a campaigner claimed Nepali workers had paid up to $1,000 (RM4,402) in recruitment fees to land security guard jobs in Malaysia, which prompted Ikea to initiate its probe.
Ikano Retail, which manages IKEA stores in Malaysia, Singapore, Thailand, the Philippines, and Mexico, and Inter Ikea, which is in charge of the brand's franchise stores, were in charge of the investigation. Ikano claimed that the investigation proved that many of the security guards operating in Malaysian IKEA stores had paid recruitment fees, which violates the company's code of conduct.
"We were unable to address our issues with our provider despite many weeks of discussion," Ikano made a statement about the situation, saying, "We have consequently ended our partnership."
According to Ikano, the matter has been reported to the Nepalese embassy and local law enforcement. The company also states that they have found a new supplier who will hire employees directly as opposed to using subcontractors.
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