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1 Oct 2020

Tashny Sukumaran, South China Morning Post

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

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 [...], while admitting to concerns the embargo could have a negative effect on the country’s economy.


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.”


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”.

“The investigation also raised concerns that forced child labour is potentially being used in FGV’s palm oil production process,” it added.

In response, FGV – which falls under the Federal Land Development Authority, a government agency that organises smallholder farmers who grow cash crops – said it had been working to “correct the situation” since 2015.

“FGV’s efforts are well documented and available in the public domain,” the company said. “FGV is disappointed that such a decision has been made when FGV has been taking concrete steps over the past several years in demonstrating its commitment to respect human rights and to uphold labour standards.”