<article><p class="lead">The US will ban imports of all palm oil and derived products produced by Malaysia's FGV, its subsidiaries and joint ventures after the US customs and border protection (CBP) agency found evidence of forced labour and other abuses at the agricultural and agri-commodities firm. </p><p>The CBP will detain prohibited goods at US ports of entry under a withhold release order but allow importers of detained shipments to either re-export the goods or provide evidence that they were not produced through forced labour. </p><p>FGV is one of the world's largest producers of crude palm oil (CPO), accounting for around 15pc of Malaysia's annual CPO output, which stood at 19.9mn t in 2019. But the US imported only 279,000t of palm oil and its factions from Malaysia from January-July 2020, according to customs data, or just 2.3pc of Malaysia's exports, for use in mainly processed foods, cosmetics and pharmaceuticals. As such, stakeholders said the ban should not significantly impact market flows, although it may further tarnish the industry's reputation in key markets such as the EU.</p><p>The CBP announced the ban on 30 September after concluding a year-long probe into the company, which revealed "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", as well as potential forced child labour, in FGV's palm oil production process.</p><p>FGV responded that it has been working to improve conditions since 2015, when the firm's human rights abuses first came to light. But steps to improve working conditions, for which FGV indicated an implementation date, mostly began in 2019-20 when it was already under investigation by CBP. These include covering all migrant worker recruitment costs, hiring workers legally through official immigration channels and upgrading worker housing at plantations over the last three years. The company also stressed that it does not retain workers' passports and reports all cases of physical or sexual violence that occur at its facilities to the authorities. </p><p>FGV is certified under the Malaysian Sustainable Palm Oil (MSPO) scheme that requires producers to meet certain standards of social responsibility and employment conditions, which should have prevented many of the abuses uncovered by CBP. Certification criteria include providing a legal minimum wage and employment contracts, mutually agreed and legal overtime limits and pay and habitable living facilities, as well as preventing sexual harassment and child labour. MSPO has certified over 96pc of large palm oil estates, or 4.06ha of oil palm planted land in the country. </p><p>The CBP established a forced labour division in 2018 to investigate worker abuse allegations and enforce US federal statute 19 U.S.C. 1307, which bans the import of products produced using forced labour. It has active withhold release orders against 44 companies from 11 countries, as well as two fishing vessels.</p><p class="bylines">By Lauren Moffitt</p></article>
