Malaysia's Sime Darby to look into report of forced labor in call for U.S. import ban

FILE PHOTO: A general view of the Sime Darby Plantation headquarters in Petaling Jaya, Malaysia October 2, 2019. REUTERS/Lim Huey Teng/File Photo

KUALA LUMPUR (Reuters) - Malaysia’s Sime Darby Plantation on Wednesday said it will look into “serious allegations” of forced and child labor conditions in its estates after an activist group petitioned the U.S. Customs to ban imports of its palm oil.

The world’s largest palm oil company by landsize is the latest Malaysian palm giant to be hit with calls for an import ban following two similar petitions against FGV Holdings in August last year.

Sime Darby is seen as a leader in sustainably-produced palm oil. The allegations could hurt Malaysia’s efforts to brand its palm products as friendly to the environment and people amid rising anti-palm oil sentiment.

In its petition to the U.S. Customs and Borders Protection made public this week, Hong Kong-based anti-trafficking group Liberty Shared said it found presence of labor abuse in Sime Darby plantations after conducting interviews with workers and civil society, and scrutinising public disclosures, audit reports, and sustainability initiatives.

“For example, workers described the imposition of arbitrary penalties, threat of and actual sexual harassment, physical threats and abuse, various and inconsistent deductions in pay, varying conditions of accommodation, and fees charged for basic facilities,” said managing director Duncan Jepson.

Sime Darby said the allegations were against its public commitments to responsible agriculture and human rights.

“In the spirit of openness, transparency and collaboration that Sime Darby Plantation has always upheld, we intend to engage with Liberty Shared to further understand these allegations in detail to enable us to conduct a thorough and immediate investigation, and take corrective action, as the findings may warrant,” it said in a statement.

Malaysia is the world’s second largest producer and exporter of the cheap edible oil found in everything from chocolate to lipstick, and relies on over 337,000 migrant workers from countries like Indonesia, India and Bangladesh to harvest the fleshy palm fruit.

The palm industry has in recent year battled criticisms of rampant clearing of tropical forest for new plantations and poor treatment of workers, 84% of which are foreigners.

Reporting by Mei Mei Chu; Editing by Michael Perry