US bans palm oil imports from Malaysian producer FGV

The United States has banned imports of palm oil from Malaysian company FGV Holdings following an investigation into allegations it uses forced labour, the US Customs and Border Protection (CBP) agency said.

FGV, one of the world’s largest crude palm oil producers, and some other suppliers of the oil used in everything from food and cosmetics to biodiesel have long faced allegations from rights groups over labour and human rights abuses.

In response, FGV said “it is fully committed to respecting human rights and to upholding labour standards”.

The US agency said the ban was the result of a year-long investigation that revealed signs of forced labour such as abuse of the vulnerable, deception, physical and sexual violence, intimidation and threats, and retention of identity documents.

The investigation also raised concerns that forced child labour was potentially being used in FGV’s production processes, CBP said in a statement, adding that the ban would come into effect immediately.

“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 trade office.

Indonesia and Malaysia are the two biggest producers of palm oil and the industry has also been blamed for deforestation and the destruction of natural habitats.

Smith said CBP had received allegations around the broader palm oil industry and asked US importers to look into the labour practices of their suppliers.

“I can’t be more specific at this point but I would suggest that US importers doing business with palm oil producers take a look at their supply chain and ask a lot of questions around the labour practices,” she said.

‘Concrete steps’

In a statement to Al Jazeera, FGV said it has taken “concrete steps over the past several years” to improve its labour practices.

The company said its migrant workers, mostly from Indonesia and India, are briefed on the terms of their employment, job scope and their rights and responsibilities before they leave their home countries and upon arrival in Malaysia.

It also said it pays its workers “at the very least, minimum wage” under Malaysian law, and has spent 350 million Malaysian ringgit ($84.4m) over the last three years upgrading housing facilities for its plantation staff.

FGV also denied it retains its workers’ passports, adding that it has installed 32,350 safety boxes for its staff to store their documents.

The CBP’s Smith said US consumer goods giant Procter & Gamble, which has a joint venture with FGV, should take the ban “seriously” if it is an importer of its palm oil products.

Procter & Gamble did not immediately respond to the Reuters news agency for requests for comment.

The CBP ban comes after rights groups called on US authorities last year to investigate FGV over concerns about forced labour and human trafficking on its plantations.

About 80 percent of palm plantation workers in Malaysia, or some 337,000 workers, are migrants from countries including Indonesia, India and Bangladesh.

Anti-trafficking group Liberty Shared submitted a petition to CBP in April against another Malaysian palm oil producer, Sime Darby Plantation, over alleged labour abuse.

The company said in July it had asked the rights group for more information and that it would swiftly address any breaches following a thorough investigation.