Malaysia says palm oil giant FGV to face action over forced-labour issues in wake of US import ban

Human resources minister M. Saravanan says unspecified steps will be taken against the firm and admits the ban could have a knock-on effect on the country’s economy

US Customs says its investigation of the company revealed restrictions of workers’ movements, physical and sexual violence, withholding of wages, and debt bondage

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The headquarters of FGV Holdings in Kuala Lumpur. Photo: AP

Published: 4:39pm, 1 Oct 2020Updated: 7:59pm, 1 Oct 2020

The Malaysian government will be taking action to rectify poor labour conditions that led to a recent US ban on palm oil imports from the government-linked agribusiness FGV Holdings, human resources minister M. Saravanan said on Thursday, while admitting to concerns the embargo could have a negative effect on the country’s economy.

Saravanan told reporters he was uncertain about the details of the ban – which he said he was told about by the United States’ ambassador to Malaysia, Kamala Shirin Lakhdhir – and that he had not expected it to be implemented immediately.

He said issues surrounding the company, which is one of top palm oil producers in the world, were mainly in the Bornean states of Sabah and Sarawak “and involve families, their children”, without offering details.

“Action will be taken,” Saravanan added. “The country is at the moment relying very much on exports, and this is not a good sign for the country.”

He also said that another Malaysian plantation firm would soon face a US ban, although he did not specify which company.

The order issued by US Customs and Border Protection on Wednesday specifies that all palm oil and palm oil products made by FGV Holdings and its subsidiaries and joint ventures would be detained at US Customs due to indications of the use of forced labour.

US Customs said the order was the “result of a year-long investigation that revealed forced labour indicators including abuse of vulnerability, deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats, retention of identity documents, withholding of wages, debt bondage, abusive working and living conditions, and excessive overtime”.