Addressing Forced Labor in Malaysia Migrant laborers have the potential to become the victims of forced labor practices, due largely to the significant debt they incur through the process of recruitment, obtaining travel documentation and gaining entry into a foreign country. During 2021, this issue gained heightened attention due to the increased focus of the U.S. Customs and Border Patrol on migrant working conditions, with the agency issuing a number of Withhold Release Orders refusing entry of products into the U.S. market that were suspected of being made in whole or in part by forced labor. This included several Malaysian companies involved in the manufacture of personal protective equipment and palm oil products. When migrant workers arrive in Malaysia, they sometimes find that the salaries they earn are too low to cover the cost of repaying recruitment fees and expenses. Compounding the problem, their employers often withhold employee identity documents. This can put migrant workers in a precarious position as they are dependent on their job to repay their debts and, if they face challenging working conditions, they may be unable to look for other employment given the inaccessibility of their work permits and identity documents. Citi has a longstanding prohibition against providing financing to any company that uses forced labor practices as defined by the ILO’s 11 Forced Labour Indicators. The Citi Malaysia team partnered with our global ESRM team to conduct a portfolio review in Malaysia to determine which Citi clients may have higher risk for potential forced labor practices and whether those clients have policies and procedures in place to address that risk. Out of hundreds of corporate and subsidiary client relationships reviewed, we identified 29 in higher-risk sectors with high migrant labor employee populations that required enhanced ESRM due diligence to assess client practices against international labor practices. In situations where this review uncovered high risks that were not adequately addressed through company policies and practices, or when credible accusations of forced labor existed, we engaged those clients on improvements needed. When necessary, we required clients to bring in labor rights experts to audit and suggest improvements for their policies and procedures, and we set up regular meetings to assess progress to close these gaps. While this is an important step, we also acknowledge that due to the long history of precarious migrant labor working conditions in Malaysia, and in other countries that rely on similar systems, it will take time and continued work to raise awareness to change ingrained practices. With this in mind, Citi Malaysia and the ESRM team took an additional step to educate clients and raise awareness by working with a forced labor expert to develop a webinar for our Malaysian clients. This webinar focused on international standards based on the ILO’s Forced Labour Indicators, risk identification methodologies and best practices for preventing forced labor in corporate operations and supply chains, such as employer payment of recruitment fees, reimbursement of debt, ethical recruitment procedures, employee access to identity documents, and proper pay, overtime management and grievance mechanisms. More than 100 clients in Malaysia attended this webinar and it was very well received. Learn more about this issue on the U.S. Customs and Border Protection and ILO websites. Contents ESGatCiti SustainableFinance SustainableProgress Equitable&ResilientCommunities Talent&DEI RiskManagement&ResponsibleBusiness Appendices CITI 2021 ESG REPORT 128