The US Bans Shipments of Palm Oil after Finding Indicators of Forced Labour
By: Ashwathy Nair
- All shipments of palm oil giant to be banned after finding indicators of forced labour.
- The investigation “reasonably indicates” abuses against workers.
- US ban also should be a red flag for Asian and Western financial institutions.
The United States stated that it will be banning all shipments of palm oil from one of the world’s biggest producers after discovering signs of forced labour and other mistreatments on plantations that feed into the supply chains of some most famous food and cosmetic companies of America.
The order against Malaysian-owned Sime Darby Plantation Berhad along with its local subsidiaries, joint ventures and affiliates followed an intensive months-long investigation by Border Protection’s Office of Trade and the US Customs, said one of the executive directors of the agency, Ana Hinojosa.
The investigation “reasonably indicates” that abuses against workers including physical as well as sexual violence, restriction of movement, intimidation and threats, withholding of wages, debt bondage and excessive overtime.
Hinojosa stated that some of the problems that seemed to be systemic, occurring on numerous plantations, which stretch across wide swaths of the country.
“Made by forced labour into the United States, Importers should know that there are reputational, financial and legal risks associated with importing goods.”
The announcement of the orders was just after three months of the federal government slapped the same ban on another Malaysian palm oil giant named FGV Holdings Berhad, which was the first palm oil company ever targeted by Customs over concerns about forced labour.
Representing a third of the total value shipped in, the US imported USD 410 million of crude palm oil from Malaysia in the fiscal year 2020.
In the aftermath of an in-depth investigation by The Associated Press into labour violations on plantations in Malaysia and neighbouring Indonesia, which together generate around 85% of the USD 65 billion supply of the world’s most consumed vegetable oil, the bans, followed by petitions filed by non-profit organisations and a law firm, came.
Palm oil is found in almost half of the products on supermarket shelves along with being present in most of the cosmetic brands. It is present paints, pesticides, animal feed, biofuels and even hand sanitizer.
More than 130 current and former workers from two dozen palm oil companies including Sime Darby, for its investigation, were interviewed by AP. Reporters discovered everything from rape and child labour to trafficking and outright slavery on plantations in both countries.