US bans another Malaysian palm oil producer over rights abuses


The United States government has announced a ban on imports from a Malaysian palm oil giant whose products are found in numerous household goods over concerns of forced labour and other abuses.

The move against Sime Darby Plantation, one of the world’s biggest producers, marks the second time the US has blocked shipments from a palm oil company in the Southeast Asian nation in just months.

The decision came after an intensive months-long investigation by the U.S. Customs and Border Protection’s Office of Trade, said Ana Hinojosa, one of the agency’s executive directors.

Hinojosa said the investigation “reasonably indicates” abuses against workers that included physical and sexual violence, restriction of movement, intimidation and threats, debt bondage, withholding of wages and excessive overtime.

Some of the problems appeared to be systemic, occurring on numerous plantations, which stretch across wide swaths of the country, Hinojosa said.

Palm oil is a common ingredient in items ranging from processed foods to cosmetics, with Malaysia and neighbouring Indonesia producing 85% of the world’s supply.

“Importers should know that there are reputational, financial and legal risks associated with importing goods made by forced labour into the United States,” Hinojosa said in a press briefing.

The order was announced just three months after the government slapped the same ban on another Malaysian palm oil giant, FGV Holdings Berhad — the first palm oil company ever targeted by Customs over concerns about forced labour.

The U.S. imported US$410 million of crude palm oil from Malaysia in fiscal year 2020, representing a third of the total value shipped in.

The bans, triggered by petitions filed by non-profit groups and a law firm, came in the wake of an in-depth investigation by The Associated Press into labour abuses on plantations in Malaysia and neighbouring Indonesia.

The AP interviewed more than 130 current and former workers from two dozen palm oil companies, including Sime Darby, for its investigation. Reporters found everything from rape and child labour to trafficking and outright slavery on plantations in both countries.

Sime Darby has palm oil plantations covering nearly 1.5 million acres, making it one of Malaysia’s largest producers. It supplies to some of the biggest names in the business, from Cargill to Nestle, Unilever and L’Oreal.

The company issued a press release Thursday saying it has not yet received sufficient information about the allegations that triggered the ban, but was ready to work with the U.S. government and others to address their concerns. It said it is committed to combating forced labour and has implemented robust policies to protect worker’s rights.

“It would be in the interest of all parties, especially our foreign workforce and women employees, if these matters are addressed expeditiously,” the company said.

Palm oil can be found in roughly half the products on supermarket shelves and in most cosmetic brands.

Under Wednesday’s order, palm oil products or derivatives traceable to Sime Darby will be detained at US ports. (Source: Mainichi Japan)