Forced labor, a new palm oil controversy

Posted on Jan 8, 2021 at 6:30 am

Suspected of being bad for health, criticized for its major role in deforestation, palm oil is seeing a new front open against it. It is now the working conditions in the plantations of this vegetable fat that are under fire from criticism: forced labor, sexual or physical violence, obstruction of free movement, deductions from wages.

The United States is starting to raise its voice against the producers. The US Customs and Border Protection Agency decided on December 30 to ban all imports of fat from the plantations of Malaysian giant Sime Darby, Malaysia’s second-largest producer.

Serious abuse

In concrete terms, palm oil from its plantations, or any product containing it, will no longer be able to enter the United States until further notice. The agency says it is in possession of information that suggests “reasonable” that Sime Darby employees are suffering serious abuse. In October, it was Felda Global Ventures Holdings (FGV), a Malaysian state-controlled company, that was banned from the US market.

In Malaysia, almost 80% of the workforce is foreign. The country is the second largest producer in the world after Indonesia, the two states together accounting for 85% of global palm oil production, which is found in processed food products, cosmetics, and biodiesels.

Sleep on the floor in the jungle

In recent months, surveys revealing the arduous nature of the work on the plantations have been increasing. According to the Associated Press (AP) story, the daily life of many workers is like that of Jum, an employee of Felda.

The boss of this worker confiscated his passport and then lost it, forcing him to stay in the plantation and to hide from the authorities by sleeping on the ground in the jungle. His biggest fear? The Tigers. “ I’m no longer a free man », He confides to the agency. “ I only want to go and see my father and my mother again “. Women are victims of rape. Malaysia, like Sime Darby, dispute these allegations, speak of isolated cases, and ensure that the rights of agricultural workers are protected.

The big brands are supplied in the region

Most of the major brands, Nestlé, Unilever, Procter & Gamble, source palm oil from the region. AP also underlines the role of financial institutions, Deutsche Bank, BNY Mellon, Citigroup or HSBC which indirectly support this industry. Highly demanded by manufacturers and thanks to high yields, production has exploded, from 5 million tonnes in 1999 to 72 million today.

After plunging during the pandemic due to collapsing demand for fuel, palm oil prices are trending higher. At the Kuala Lumpur Stock Exchange, they even reached their highest level in 10 years at 4,000 ringgits or 1,000 dollars. This rise is explained first of all by the rise in soybean oil prices, with manufacturers turning to palm oil. Next, production in Malaysia is expected to be less good than expected due to flooding.

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