The US State Department certified on Monday that Malaysia is making progress in the fight against human trafficking — but human rights groups, Malaysian activists, and a number of US Senators accuse Barack Obama's administration of manipulating the record to allow the Southeast Asian country to join the president's massive free trade deal, the Trans-Pacific Partnership (TPP).
On Monday, US Secretary of State John Kerry released the annual Trafficking in Human Persons report (TIP), upgrading Malaysia from Tier 3, the worst designation, to its "Tier 2 Watch List."
"The Government of Malaysia does not fully comply with the minimum standards for the elimination of trafficking; however, it is making significant efforts to do so," the report said.
The upgrade allows the Obama administration to "fast-track" Malaysia's membership in the TPP. An amendment written by Sen. Robert Menendez (D-NJ) had barred countries with a Tier 3 designation from participating in the trade deal.
'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.'
Many anti-human trafficking advocates are crying foul.
"The State Department has sold out human rights to corporate and regional interests," David Abramowitz, the former chief counsel to the House Foreign Affairs Committee and a member of the Alliance to End Slavery and Trafficking, told VICE News following Monday's announcement.
"Like Malaysian unions, experts, and rights activists, we are astounded at this decision," Shawna Bader-Blau, executive director of nonprofit labor organization the Solidarity Center, told VICE News. "The administration has lost a huge opportunity to advance human rights in its trade relationships with the 'upgrade.' Either ending trafficking is a priority, or it isn't. This decision makes it look like it is not a priority."
Menendez responded that the report jeopardized US credibility in fighting human trafficking.
"I am profoundly disappointed by this year's TIP report," he said in statement. "The administration has turned its back on the victims of trafficking, turned a blind eye to the facts, and ignored the calls from Congress, leading human rights advocates, and Malaysian government officials to preserve the integrity of this important report."
The US State Department did not respond to requests by VICE News for comment.
In Malaysia, meanwhile, anti-trafficking campaigners have said that no real progress has been made and that the State Department's ranking has been politicized.
"Human trafficking and forced labor are as bad as ever here," Charles Santiago, a member of the Malaysian parliament and a fierce opponent of trafficking, told VICE News earlier this month. "We have women who are raped endlessly, workers who are malnourished... and there's no political will to take it seriously."
Menendez believes the administration is manipulating the human rights report to elevate Malaysia to the Tier 2 Watch List in order to bypass his amendment.
Before the announcement Monday, he told VICE News that "changing Malaysia's status 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."
'The analysis of the report should be on the facts of the trafficking, not on political considerations.'
Last 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.
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 previous 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 report released on Monday condemned human trafficking in Malaysia, but maintained that some improvements had been made over the last year.
"A significant number of young women, mainly from Southeast Asia, and to a much lesser extent Africa, are forced into prostitution although recruited ostensibly for legal work in Malaysian restaurants, hotels, and beauty salons," it read. It also noted that tens of thousands of foreign workers are denied legal status, and that the government only successfully prosecuted three individuals for forced labor and trafficking in the last year.
The report did praise the government for adopting "a pilot project to allow a limited number of victims [of human trafficking] to work outside government facilities," and for passing a draft law that would allow more detained foreign workers to leave government detention centers.
Alice Nah said these reforms do not amount to a serious change in policy, and do not warrant an upgrade in Malaysia's status.
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.
'If we get Tier 2, it will be a blatant display of American hypocrisy.'
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 before the report was released. "It would cause other dominos to fall."
David Abramowitz agreed that Malaysia's upgrade is 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 when VICE News spoke to him ahead of Malaysia's reclassification.
"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."
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. But the compromise is not yet in effect.
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."
On Monday, Menendez announced he would push back against the new TIP Report.
"I intend to use all of the tools at my disposal — from hearings to legislation to investigations — to challenge these upgrades," he vowed. "The United States' commitment and credibility in fighting the scourge of modern day slavery is on the line. We need to make clear that the TIP report must not be subject to political manipulation."
Follow Avi Asher-Schapiro on Twitter: @AASchapiro