The United States Bans Malaysian Palm Oil Over Concerns of Workers Abuse

The United States has banned imports from a Malaysian palm oil giant whose products are found in numerous household goods over concerns that its workers face a litany of 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 recent months.

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

But activists have long claimed that low-paid workers on plantations face abuse, and also blame the industry for driving destruction of rainforests to make way for plantations.

Workers facing abuse 

Announcing the ban late on Wednesday, US Customs and Border Protection (CBP) said there was evidence Sime Darby workers face abuses including sexual and physical violence, withholding of wages and restrictions on movement.

The CBP said it issued a ‘withhold release order’ on Sime Darby, which will allow it to detain shipments based on suspicion of forced labour involvement under longstanding US laws aimed at combating human trafficking, child labour and other human rights abuses.

The CBP said the order was based on a months-long investigation that reasonably indicated the presence of the International Labour Organization’s forced labour indicators at Sime Darby plantations.

“We do believe that there are some issues that are systemic across all of Sime Darby’s plantations,” Ana Hinojosa, executive director of CBP’s Trade Remedy Law Enforcement Directorate, said on a call with reporters.

Malaysian companies on radar

Sime Darby is the third Malaysian company to be slapped with a US ban this year over forced labour allegations after FGV Holdings, another Malaysian palm oil producer, and Top Glove, the world’s biggest producer of medical-grade latex gloves.

Malaysia relies on over 337,000 migrant workers from countries like Indonesia, India and Bangladesh to harvest the palm fruit.

The CBP said the United States imported about $410 million worth of crude palm oil from Malaysia in the fiscal year that ended in September 2020, accounting for just over 30 percent of the United States’ total palm oil purchases.

Sime Darby says its annual exports to the United States total about $5 million.

The company, which supplies major firms like Nestle and Unilever, runs a network of sprawling plantations, and employs migrant workers from countries including Indonesia and Bangladesh.

Earlier this year, anti-trafficking group Liberty Shared had petitioned the CBP to ban imports from Sime Darby over concerns about labour abuse.

In October, the US banned imports from another Malaysian palm oil producer, FGV Holdings, following a lengthy probe that found indications its workers faced abuse.

Sime Darby did not respond to requests for comment.

It supplies to some of the biggest names in the business, from Cargill to Nestle, Unilever and L’Oreal, according to the companies’ most recently published supplier and palm oil mill lists.

The ban “demonstrates how essential it is for Americans to research the origins of the everyday products that they purchase,” said CBP acting commissioner Mark A. Morgan.

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