Activists urge U.S. customs to ban palm oil imports from Malaysia's FGV

KUALA LUMPUR (Reuters) - A group of non-governmental organizations is calling on U.S. authorities to ban imports of palm oil from Malaysia’s FGV Holdings and investigate the company, citing concerns of forced labor and human trafficking on its plantations.

U.S.-based NGOs International Labor Rights Forum (ILRF), Rainforest Action Network (RAN) and SumOfUs said they had filed a complaint with the U.S. Customs and Border Protection (CBP), which is required to deny entry of goods made with forced labor.

“We are calling on U.S. Customs to enforce current law and prevent American consumers from unknowingly funding forced labor with each illicit FGV palm oil product sold,” said Judy Gearhart, executive director of the International Labor Rights Forum.

“CBP needs to issue a detention order on all imports of them, and direct port managers to block their release into the U.S. We hope this will trigger a CBP investigation into FGV’s operations and the complaints of forced labor within their estates.”

FGV said in a statement on Thursday that it had always admitted to oversights and mistakes in the past, “all of which are being or have already been corrected.”

“However, FGV is fully aware that there is always room for further improvement, and we are always grateful when stakeholders engage with us or suggest refinements that will benefit everyone. FGV is committed to ethical and responsible development,” it said.

The world’s top producer of crude palm oil produced 2.8 million tonnes of the edible oil last year.

About 5% of its revenue from external customers in 2018 was from the United States and Canada, according to its annual report. FGV also has a joint venture oleochemical business with Procter & Gamble in Malaysia.

FGV had grappled with management shakeups and allegations of corruption in recent years, and is currently cutting costs by trimming staff and divesting assets.

After a Wall Street Journal report in 2015 detailed abuses faced by foreign workers at FGV’s plantations, the company withdrew its certificates of sustainability from its processing mills in 2016 to address concerns in its supply chain.

Global palm industry watchdog Roundtable on Sustainable Palm Oil (RSPO), which issues the sustainability certificates, found “exploitative” labor practices, dire living conditions for workers and lax oversight of contractors that hire the company’s foreign labor in an investigation into the company last year.

In response to that investigation, FGV said at the time that it had frozen all new recruitment of workers from external contractors, and negotiated to directly employ workers contracted through third parties to avoid displacing existing workers.

It said it would also revise benefits enjoyed by its plantation workers and absorb the costs of basic necessities, including food supplies given to its workers.

FGV’s statement on Thursday added that it recently adopted a group sustainability policy underscoring its commitment to the principles of human rights, no deforestation or planting on peat, and climate justice, among others.

As of August, 34 out of 68 mills owned by FGV have had their sustainability certifications reinstated.

Reporting by Emily Chow, editing by Deepa Babington