Is the US Ignoring Human Trafficking Abuses to Score Its TPP Trade Deal?

Lured by the promise of $316 a month to work on road construction, Arjunan traveled last year from India to Malaysia, where his employer confiscated his passport and decided to pay him just $36 — barely enough to cover food.

When Arjunan protested, his boss phoned India and told Arjunan's wife that he would cut off her husband's leg and hand. So she pawned jewelry to buy back the confiscated passport. But even after she paid out nearly $1,400, Arjunan's boss still won't give it back.

Arjunan's ordeal, documented by the Solidarity Center, is typical in Malaysia, a country that the US State Department has "deemed not to be making significant efforts to comply with the minimum standards" to fight forced labor and human trafficking. In 2014, the State Department put Malaysia on notice and slapped the country with its lowest ranking in its annual Trafficking in Persons Report (TIP), putting it in Tier 3 alongside nations like North Korea and Iran.

Related: Thailand, Malaysia, and Venezuela Get Failing Grade in Battle Against Human Trafficking

On July 9, Reuters reported that the State Department is preparing to certify that Malaysia has made significant strides in fighting human trafficking — upgrading it to a Tier 2 "watch list." The timing couldn't be better for the Malaysian government, which is eager to join the Obama administration's landmark Trans-Pacific Partnership (TPP), a massive trade deal with Pacific Rim nations that aims to unite nearly 40 percent of the world's GDP into one free-trade zone.

When contacted by VICE News, Pooja Jhunjhunwala, a spokesperson for the State Department, would neither confirm nor deny that Malaysia's status is being upgraded.

In Malaysia, meanwhile, anti-trafficking campaigners say that no real progress has been made.

"Human trafficking and forced labor are as bad as ever here," Charles Santiago, a member of the Malaysian parliament and a leading anti-trafficking campaigner, told VICE News. "We have women who are raped endlessly, workers who are malnourished… and there's no political will to take it seriously."

But in order for Malaysia to join the trade deal, it is crucial that its status be upgraded. When the Senate recently passed legislation giving President Barack Obama fast-track authority to negotiate the trade accord, Sen. Robert Menendez (D-NJ) added an amendment saying that no such procedures could be negotiated with countries that have been designated Tier 3.

Related: Southeast Asia Has a Plan to Tackle Human Trafficking, but There's an Elephant in the Room

Menendez is concerned that the Obama administration is preparing to manipulate the human rights report and elevate Malaysia to the Tier 2 watch list in order to bypass his amendment.

Upgrading Malaysia, he told VICE News, "would represent a blatant manipulation of [the administration's] own ranking system, undermining the credibility of our international efforts to fight human trafficking. It would be a stain on our country's record of upholding human rights around the world."

On Wednesday, Menendez wrote a letter calling the upgrade a "cynical maneuver to get around the clear intent of Congress." It was signed by 18 other senators, including Elizabeth Warren (D-Mass.) and presidential candidates Bernie Sanders (D-Vt.) and Marco Rubio (R-Fla.).

The senators warned that upgrading Malaysia would undermine future efforts to fight human trafficking.

"As the US government's principal tool to engage foreign governments on human trafficking, the integrity of the TIP report ranking process is a reflection of our country's principles and must be upheld," it said.

Experts argue that Malaysia's trafficking crisis is getting worse, as ethnic clashes and an economic crisis force refugees from Myanmar and Bangladesh to flee to Malaysia through the Bay of Bengal. The crisis made international headlines when the bodies of 139 Rohingya, a persecuted ethnic minority from Myanmar, were discovered at the Thai-Malaysian border last month. Investigators suggested that the migrants had been chained, tortured, and dumped into holes in the ground.

In the first three months of 2015, smugglers and human traffickers transported 25,000 migrants along this route — double the rate from the year before, according to the UN High Commissioner on Refugees. Traffickers often charge ransoms or force migrants into debt-peonage, Alice Nah, an expert on human trafficking at the University of York, told VICE News.

The problem extends far beyond the mass graves. In 2014, Malaysia was home to nearly four million foreign workers who staff its burgeoning construction, electronics, and services industries. Nearly a third of workers in the electronics industry and a third of migrants in Malaysia overall are either trafficked or forced to work, according to Nah.

"The government knows it and doesn't do anything about it," she said.

According to the latest State Department and UN reports, Malaysia allows employers to seize worker passports, charge exorbitant fees for "employment recruitment," and withhold pay with impunity, even if many of these practices are technically illegal.

The situation is especially dire for those fleeing to Malaysia from nearby conflict zones. "Refugees in Malaysia lack formal status or the ability to obtain work permits under Malaysian law," reads the 2014 TIP report. The State Department suggested a number of concrete steps the Malaysian government should take to upgrade its status: enforce laws that prohibit employers from confiscating passports, crack down on the exploitative labor recruitment and the forced labor industry, and allow victims of human trafficking who are currently detained in government facilities while awaiting deportation to seek work in the interim.

In June, Malaysia passed a law allowing trafficking victims to work while waiting to be deported, after UN Special Rapporteur for Human Trafficking Maria Grazia Giammarinaro visited the country and noted that its detention policy is particularly abusive. The law change, which observers describe as the only significant step Malaysia has taken on trafficking, took place after the review period for the current TIP report that is being drafted had closed.

Dr. Michael Jeyakumar Devaraj, a Socialist Party member of the Malaysian parliament, told VICE News that the country's political elites do not take trafficking seriously. The ruling National Front Party has been in power in some form since 1957, making it the longest serving ruling party in the world. Human rights are not among its top priorities, Devaraj said.

In fact, he accuses the Malaysian security forces of involvement in trafficking on the Thai-Malaysian border.

"We see complicity in the enforcement agencies on a very huge scale in terms of trafficking there," he said. "If you talk to Rohingya migrants, they tell you the police are told which trucks, the ones full of trafficked people, not to check…. Our authorities here are deeply compromised."

This assessment was echoed by Alice Nah and Charles Santiago, who accused the government of "covering up" the extent of trafficking at the border.

The Malaysian Embassy in Washington, DC, did not respond to a request for comment, but Malaysia has arrested several border agents this year for their involvement in trafficking.

The Southeast Asian nation's inclusion in the trade deal is a major priority of the Obama administration. The president visited the country in 2014 and called it a "pivotal state" in the coalition that his administration is building to counteract China's influence in the Pacific. The trade negotiations are now in their final stages, and according to William Watson, a trade policy analyst at the Cato Institute, a negative TIP report could potentially derail a final deal.

"Obama knows he can't just kick Malaysia out or remove them from the equation," Watson told VICE News. "It would cause other dominos to fall."

David Abramowitz, the former chief counsel to the House Foreign Affairs Committee and a member of the Alliance to End Slavery and Trafficking, agreed that Malaysia's expected upgrade might be more about geopolitical interests than actual progress on human rights.

"The analysis of the report should be on the facts of the trafficking, not on political considerations," he told VICE News. "And the steps Malaysia has taken so far do not amount to real change."

He suggested that the upgrade could have the effect of stripping the TIP ranking of its power to incentivize actual progress.

"The message other countries will take, when it comes down to it, is that they can rely on the US to elevate issues like trade over human rights issues," he remarked.

Santiago was more blunt.

"If the US statement gives us a Tier 2 upgrade, it means the US State Department endorses trafficking in this part of the world. There's no other way to look at it," he said.

Related: Meet the Nepalese Woman Who Has Saved 50K People from Human Trafficking

Meanwhile, Menendez and other senators have worked with the Obama administration to hammer out a compromise deal that will allow Malaysia to join the TPP as long as the administration certifies sometime in the near future that it is making progress on human trafficking.

"I worked in good faith with the administration," Menendez said.

But the compromise is not yet in effect; a Tier 3 designation would exclude Malaysia from the TPP as the law stands.

Santiago agrees that an adjustment in his country's ranking for the sake of trade would be unfortunate.

"If we get Tier 2, it will be a blatant display of American hypocrisy," he said. "It will show that human rights always take a back seat to economic interests. They might as well throw the entire TIP in the trash."

William Watson at Cato says the whole controversy shows why linking trade agreements and human rights is a messy business.

"Of course this looks bad for the president," he said, while noting that "trade and human rights are really two separate things. I don't see that punishing the people of Malaysia by excluding them from TPP is a viable approach to human trafficking."

Menendez doesn't share this view.

"A free trade deal with a country in which about a quarter of workers in a sector like electronics manufacturing are in situations of forced labor is ineffective trade policy," he insisted. "Fighting human trafficking in our trading partners helps to improve the rule of law, tackle corruption, and improve the livelihoods of workers."

Follow Avi Asher-Schapiro on Twitter: @AASchapiro