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FGV slams US directive against palm oil products

FGV Holdings says it has taken concrete steps to address concerns over forced labour in its production process.

Staff Writers
2 minute read
Plantation companies seeking RSPO certification must first meet a selection of sustainability standards. Photo: AP
Plantation companies seeking RSPO certification must first meet a selection of sustainability standards. Photo: AP

FGV Holdings Bhd today hit out at a directive issued by the US against palm oil and palm oil products produced by the agricultural giant based on claims of forced labour in the production process.

In a statement, it said the issues raised by the US Customs and Border Protection (CBP) had been the subject of public discourse since 2015.

“FGV has taken several steps to correct the situation,” it said, adding that these efforts were well documented and available in the public domain.

It listed some of these steps, including efforts to strengthen procedures and processes in the recruitment of migrant workers; discontinuing the recruitment and employment of refugees; and implementing an e-wallet cashless payroll system for plantation workers.

It also distanced itself from the practice of retaining workers’ passports, saying safety boxes had been installed at all complexes for workers to deposit their documents.

Concerning the right of workers to adequate housing, it said it had invested some RM350 million over three years to upgrade housing facilities for workers across the country.

“FGV is disappointed that such a decision has been made when FGV has been taking concrete steps over the past several years in demonstrating its commitment to respect human rights and to uphold labour standards,” it said.

The CBP withhold release order (WRO), which came into effect yesterday at all US ports of entry, will see palm oil and palm oil products made by FGV, its subsidiaries and joint ventures detained.

The CBP said its WRO was issued “based on information that reasonably indicates the use of forced labour”.

In a statement yesterday, it said indicators gathered throughout a year-long investigation included abuse of vulnerability, deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats, retention of identity documents, withholding of wages, debt bondage, abusive working and living conditions, and excessive overtime.

It also mentioned concerns of forced child labour in the production process.

“The use of forced labour in the production of such a ubiquitous product allows companies to profit from the abuse of vulnerable workers,” said Brenda Smith, executive assistant commissioner of CBP’s Office of Trade.

“These companies are creating unfair competition for legitimately sourced goods and exposing the public to products that fail to meet ethical standards.”