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WASHINGTON / KUALA LUMPUR (REUTERS) – The United States has banned imports of palm oil from Malaysian company FGV Holdings Bhd following an investigation into allegations that it uses forced labor, the US Customs agency said on Wednesday (September 30). and Border Protection (CBP). .
FGV, the world’s largest producer of crude palm oil, and some other suppliers of the oil used in everything from food to cosmetics to biodiesel, have long faced accusations from human rights groups of labor and human rights abuses.
The US agency said the ban was the result of a year-long investigation that revealed signs of forced labor such as abuse of vulnerable people, deception, physical and sexual violence, intimidation and threats, and withholding of identity documents.
The investigation also raised concerns that forced child labor was potentially being used in FGV production processes, CBP said in a statement, adding that the ban would take effect immediately.
“The use of forced labor in the production of such a ubiquitous product allows companies to profit from the abuse of vulnerable workers,” said Ms. Brenda Smith, Executive Assistant Commissioner for CBP’s business office.
Indonesia and Malaysia are the two largest palm oil producers and the industry has also been blamed for deforestation and the destruction of natural habitats.
FGV said on Thursday (October 1) that it took steps to correct allegations that it uses forced labor and was disappointed with the US ban.
“FGV is disappointed that such a decision was made as FGV has been taking concrete steps over the past few years to demonstrate its commitment to respect human rights and uphold labor standards,” the company said in a statement.
The company said that all the issues raised have been the subject of public debate since 2015 and it has taken various steps to correct the situation, which are “documented and available in the public domain.”
FGV will continue to work with CBP to clear its name, the company said.
FGV shares fell as much as 6.1 percent in the opening bell.
CBP said it could not share the total imports of FGV, but that the ban “will not have a significant impact on total imports of palm oil and palm oil products from the United States.”
There has been US $ 147 billion (S $ 201 billion) in US imports of palm oil products since August 2018, CBP said in an email.
Ms. Smith said CBP had received allegations about the broader palm oil industry and asked US importers to investigate the labor practices of their suppliers.
“I can’t be more specific on 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 about labor practices,” he 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, Ms Smith said.
Procter & Gamble did not immediately respond to requests for comment.
The CBP ban comes after human rights groups asked US authorities last year to investigate FGV over concerns about forced labor and human trafficking on its plantations.
About 84 percent of Malaysian palm plantation workers, or some 337,000 workers, are migrants from countries such as Indonesia, India and Bangladesh.
Anti-trafficking group Liberty Shared filed a petition with CBP in April against another Malaysian palm oil producer, Sime Darby Plantation, for alleged labor abuses.
The company said in July that it had asked the rights group for more information and would promptly address any violations after a thorough investigation.
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