US Blocks Malaysian Palm Oil Producer for Human Rights Violations
Two weeks ago, an AP news article exposed troubling information regarding the palm oil industry in Malaysia, the second largest producer of palm oil in the world behind Indonesia. Last year, a petition was filed by various nonprofit organizations, asking for FGV Holdings Berhard to implement changes in the way they treat their workers. FGV is not only Malaysia’s largest palm oil, company, they are a joint-venture partner with American consumer good company, Proctor & Gamble.
The US Customs and Border Protection Office of Trade recently blocked shipments from FGV due to concerns of forced labor, child labor, as well as other abuses including physical and sexual violence. However, the United States is not the only country that has taken action against FGV. FGV Holdings was the center of attention for labor abuses at a global Roundtable on Sustainable Palm Oil certification group two years ago. Palm oil from FGV has even made its way into supply chains of Nestle, L’Oreal, and Unilever. These companies are not only globally recognized, but strive to have positive reputations amongst their consumers.
AP reporters interviewed over 100 current and former workers from multiple countries, including FELDA (Federal Land Development Authority), a Malaysian government entity that owns approximately a third of FGV shares. AP discovered that Rohingya Muslims were forced to work on Malaysian plantations, as well as minors. Some went unpaid and were even trafficked and raped. Despite these human rights violations, FGV claims they recruit migrant workers legally and do not hire contract workers. Other governments and companies are starting to cut ties with FGV after these findings as well. Interestingly, the way the US Customs and Border Protection Office of Trade responded leaves many companies with an important decision. They can either cut ties with FGC altogether and possibly lose profits, or risk their products being denied upon entry to the United States. Either way, the US Customs and Border Protection Office of Trade is not outright blocking all imports on products with palm oil. Basically, they say that it is up to each company to provide proof that their products are sourced without human rights violations in order for them to be accepted in the United States.
FGV is clearly a company that cares more about its profits more than its social impact. Now, we will see how companies that rely on FGV for palm oil will react after these violations were brought to light. These finding are especially troubling, and will have severe consequences not just for FGV, but for companies further along in the FGV supply chain in the near future if serious changes are not made for their workers. Through this pseudo ban, the United States is essentially deputizing these companies to fight against human rights violations.
By Jake Raimer (October 12, 2020)