Legal complaint targets Proctor & Gamble’s purchases from Felda Global Ventures and acknowledges global buyers from same plantations, but similar cases not possible in Europe
Palm oil produced in Malaysia has been linked to environmental and human rights abuses.
A complaint filed by NGOs with
the US Customs and Border Protection (CBP) to halt imports from one of
Malaysia’s largest palm oil firms accused of various forced labour allegations
would not be possible in Europe due to the absence of relevant law.
The International Labor Rights
Forum (ILRF), Rainforest Action Network (RAN) and SomeOfUs filed
the complaint on 15 August and allege that palm oil imported from
Felda Global Ventures (FGV) in Malaysia by Procter & Gamble (P&G)
breaches the US Tariff Act. P&G operates a joint venture with FGV to refine
palm oil for its products.
Under the Act, US Customs is
required to deny entry to goods that arrive at US ports if there is reasonable
cause to believe they contain materials made with forced labour.
The NGOs cited field reports that
detail instances of forced labour and human trafficking at FGV-owned palm oil
Allegations against FGV date back
to 2015. A Wall
Street Journal investigation documented how payments to migrant
workers at FGV-owned plantations were withheld, passports confiscated and
‘violent forms of human trafficking’ were reported.
Later research by environmental
groups in the region painted a similarly depressing picture and in 2019 further
cases of debt bondage and workers being trafficked from Indonesia and
the Philippines to work on FGV plantations also surfaced.
The Roundtable on Sustainable
Palm Oil (RPSO), the leading palm oil certifier, suspended the
certification of one of FGV’s mills and supply bases in 2018, due to ongoing
violations. The RSPO recently reinstated FGV’s certification based on action
plans produced by FGV but no public information is available on its progress.
Judy Gearhart, executive director
of ILRF, said: “We are calling on US Customs to enforce current law and prevent
American consumers from unknowingly funding forced labour with each illicit FGV
palm oil product sold”.
FGV palm oil from Malaysia – the
world’s second largest producer – enters the US via major traders like Sime
Darby, Louis Dreyfus and Cargill and companies directly. The NGO complaint
states that P&G imported 14
million pounds of palm oil from its FGV venture in the past year,
while trader Bunge imported palm oil from 23 Felda/FGV operations to Illinois
in the first quarter of 2019.
Given the global nature of the
brands named in the complaint, it is believed a significant amount of FGV palm
oil is also imported into Europe. FGV palm oil is used by a host of other major
global consumer goods brands including Nestle, Mars, Mondelez and PepsiCo.
EU imports of Malaysian palm oil
topped €25.6m in 2018 – almost €6m more than in 2014.
In Nestle’s updated August
2019 palm oil supplier list, the makers of KitKat state they buy from three
FGV-owned mills (alongside hundreds of Felda-owned mills) through both Bunge
Europe and Bunge North America.
“We have engaged with FGV to
understand where they are making progress and where more work needs to be
done,” a Nestle spokesperson told Earthsight. “We will continue to help
ensure they take appropriate actions to eliminate labor rights abuses in their
Many other firms named also have
European operations but unlike in the US there is currently no Europe-wide
legislation that stops the importation of goods linked to forced labour,
although the introduction of a ban is being considered.
“FGV is a global company, as are
many of the brands and palm oil traders in question,” Robin Averberck,
agribusiness campaign director at RAN, told Earthsight. “Alongside US
major brands, RAN is equally concerned about European companies continuing to
purchase from FGV in violation of their own policies and the [Malaysian] law.”
Averberck believes that although
companies like Nestle adhere to initiatives such as the UK’s Modern Day Slavery
Act and that the EU has a regulation covering
forced labour within its borders, more needs to be done to monitor their global
“While most companies like Nestle
are meeting reporting requirements outlined under the UK Modern Day Slavery
Act, their actions are clearly not going far enough, as Nestle and others
continue to source from a palm oil company that has been repeatedly documented
to be engaged in forced labor practices for four years,” he added.
Ferrero, makers of Nutella and
Kinder chocolate, sourced
from two FGV-run mills in the first six months of 2017 but have now
stopped sourcing from the company.
A spokesperson at the Italian
firm did not confirm if the decision was linked to the labour abuse
allegations, but explained: “If it comes to our attention that suppliers engage
in practices that contravene the Ferrero Palm Oil Charter and are likely to
hinder our commitment to responsibly sourcing palm oil, we will stop sourcing
from these suppliers.”
The comments reflect Europe’s promotion of voluntary self-regulation instead of hard legislation to monitor global commodity supply chains.
It is an approach the recently published EU Communication on
protecting global forests is hoped will change by introducing tangible laws to
prevent commodities linked to deforestation and human rights abuses from
entering European markets.
“Ferrero supports the European
Commission’s proposed approach to strengthen international cooperation, set up
a multi-stakeholder dialogue and consider measures to address deforestation and
to encourage the use of certified sustainable palm oil,” the Ferrero