Malaysian palm giant IOI to conduct audit after report alleging labour abuse

Workers stand near palm oil fruits inside a palm oil factory in Sepang, outside Kuala Lumpur, February 18, 2014. REUTERS/Samsul Said

KUALA LUMPUR, July 2 (Reuters) - Malaysian palm oil giant IOI Corp (IOIB.KL) will undergo an audit to assess the compliance of its labour policies and working conditions at its plantations, the firm said on Friday, following a report by a human rights group alleging violations.

Helsinki-based Finnwatch on Wednesday published a report alleging that Indian migrant workers at an IOI estate face poor living conditions, paid high recruitment fees, and were paid below the minimum wage. read more

IOI said it viewed the report's findings seriously and would strive to improve the implementation of its labour policies and working conditions.

"Within the next months, IOI will undergo an audit supervised by one of our key customers and assisted by a reputable international labour rights consulting firm," it said in an exchange filing. It did not name the customer and the consulting firm.

The audit will seek to ascertain any non-compliance with its labour policies or unsatisfactory working conditions faced by its 16,000 workers in Malaysia, the company said.

The statement came a week after IOI said it will assist in any investigation after the U.S. Customs and Border Protection (CBP) said in a letter to an activist that it was investigating the firm over forced labour allegations. read more

The company denied Finnwatch's accusation of worker's having to pay recruitment fees. It said workers had instead paid "illegal monies" in their home country to unknown persons, which is beyond IOI's jurisdiction and should not be considered as such fees.

IOI highlighted its commitment to make ex-gratia payments to workers who had been charged the fees before introducing a no recruitment fees policy in 2017. It said the 918 workers eligible for the payment had been paid by June.

It said workers were guaranteed to receive the minimum wage, and had issued a guideline to enable a transparent process for them to verify their working hours and calculate their wages.

Reporting by Mei Mei Chu Editing by Ed Davies

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