Why the US has blocked imports of Malaysian palm oil

The US announced it will “detain palm oil and palm oil products” made by Malaysian firm FGV Holdings over concerns of forced labour. 

US Customs and Border Protection (CBP) announced it was issuing a Withdraw Release Order (WRO) on palm oil from FGV, one of the world’s largest palm oil producers, following a year-long investigation that had revealed “forced labour indicators”.

This included “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”, CBP said. 

The investigation had also raised concerns that forced child labour is potentially being used in FGV’s palm oil production process, the agency added.

Brenda Smith, executive assistant commissioner of CBP’s Office of Trade said: “The use of forced labor in the production of such a ubiquitous product allows companies to profit from the abuse of vulnerable workers.

“These companies are creating unfair competition for legitimately sourced goods and exposing the public to products that fail to meet ethical standards.”

Palm oil is found in around 50% of supermarket products including food, cleaning products and cosmetics. According to CBP, there have been $147bn worth of imports of palm oil since August 2018. 

However, producing the commodity has been linked to issues such as deforestation and forced labour in supply chains. 

Smith said: “CBP will continue to remind Americans that we can use our economic power to tell companies that we will not tolerate forced labor in US supply chains.

“We urge all consumers to research fair trade products and companies and shop directly with reputable retailers.”

FGV said it was disappointed by the decision as it had “been taking concrete steps over the past several years to demonstrate its commitment to respect human rights and to uphold labour standards”. 

It added it “does not tolerate any form of human rights infringements or criminal offense in its operations” and it pays “serious attention to any allegation of physical or sexual violence” in its supply chains.

“As a responsible company any case of such nature will be acted upon by FGV including by reporting them to the relevant authorities,” it said. 

Earlier this year, Malaysia began using the slogan “Palm oil is God’s gift” to market the controversial commodity following growing anti-palm oil sentiment from abroad.

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