Palm Oil Producer FGV Holdings Berhad Accused of Forced Labor Practices


Three nonprofit organizations are seeking to ban imports from one of the world’s largest producers of palm oil — a major ingredient in packaged foods such as chocolate — citing incidents of worker exploitation and “slave-like” conditions on the company’s Malaysian plantations. The groups filed petitions with U.S. Customs and Border Protection on Thursday alleging that the company FGV Holdings Berhad uses a forced labor to grow and harvest its palm oil, the Washington Post reports.

Like corn and soybean oil, palm oil is an ingredient in many products ranging from toothpaste to instant ramen to Girl Scout Cookies. The oil is favored by food companies because it doesn’t contain trans fats and is useful as preservative. However, the palm oil industry has also been criticized for contributing to deforestation of tropical rainforests, causing the destruction of endangered animal habitats, and displacing indigenous communities.

Major international companies such as Procter & Gamble, Mars, Nestlé, Hershey, and Pepsi purchase a portion of their palm oil, whether directly or indirectly, from FGV Holdings Berhad. The company operates 800,000 acres of palm oil farms in Malaysia and over the last several years those farms have been the subject of multiple damning reports by watchdog organizations and the U.S. government detailing human rights violations against migrant workers.

Advocates for the workers charge that migrants working on FGV farms are forced into debt bondage with the farm, have their passports confiscated, and are prevented from leaving the property. The organizations say some farms may use child labor. The allegations are in line with reports from the U.S. Department of State’s 2019 Trafficking in Persons Report: Malaysia. Roughly 20,000 migrants are believed to work on FGV plantations in Malaysia.

In January, FGV had pledged to shareholders that it would “correct all charges in respect of human rights abuses and violations,” according to the Post. But the organizations fighting for a ban on the company’s palm oil say that there are still reports of labor abuses at FGV farms.

In statements to the Washington Post, companies that use FGV palm oil took different levels of responsibility for the supply chain. Hershey’s says it’s told suppliers to cease purchasing FGV palm oil, while Mars and Nestlé passed the buck to their suppliers and said they’ve asked FGV to resolve the issues with its farms. Meanwhile, Cargill used semantics to separate itself from the situation saying it’s continuing to buy FGV palm oil — but only outside of the United States.

The palm oil industry is far from the only offender facing accusations of forced labor. A 2015 investigative report by the Associated Press found that many U.S. restaurant chains were serving shrimp processed with migrant slave labor. Earlier this year, the New York Times reported that companies such as Nestle, Godiva, and Nutella were purchasing hazelnuts from farms with terrible records of refugee labor abuses and child labor.

• Mars, Nestlé and Others Were Supplied By a Malaysian Company Using Forced Labor. Such imports Should Stop, Groups Say. [WaPo]
• 2019 Trafficking in Persons Report: Malaysia [State.gov]
• All Labor Coverage [E]



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