US ban on palm oil from Malaysia’s Sime Darby shows abuses are now common knowledge

Photo by CEphoto, Uwe Aranas

The US ban on imports from one of the world’s biggest palm oil producers highlights the seriousness of human rights abuse issues. However, the ban on the Malaysian firm and ongoing media scrutiny are not likely to improve conditions for palm plantation workers unless the Malaysian government intervenes.

By Umair Jamal

The United States has banned imports from Malaysian palm oil giant Sime Darby Plantation over concerns that it uses forced labor.

The move, which went into effect on December 30, marks the second time the US has blocked shipments from a palm oil company from Malaysia in recent months.

Last year, the Associated Press (AP) conducted an investigation into the alleged mistreatment of workers, particularly women, in the production of palm oil in Malaysia and Indonesia.

The AP investigation, which may have influenced the US decision to ban Sime Darby, found that the reported cases of abuse were just the tip of the iceberg and the actual situation may be far worse.

Malaysia’s government appears to have turned a blind eye to the problem. The government’s disinterest in the issue may have encouraged the abuse and exploitation of workers in the country’s massive palm oil industry.

Investigations of worker abuse in Malaysia’s palm oil industry have picked up pace in the US

The US decision to ban Sime Darby and its subsidiaries came after a months-long investigation by the US Customs and Border Protection (CBP).

In October, the US banned imports from another Malaysian palm oil producer, FGV Holdings, after an extensive inquiry found evidence that the company’s workers were abused and exploited.

Ana Hinojosa, executive director of CBP’s Trade Remedy Law Enforcement Directorate, told reporters that the findings from the Sime Darby investigation “reasonably indicate” a range of abuses against workers including physical and sexual violence, extortion, debt bondage and withholding of salaries.

“We do believe that there are some issues that are systemic across all of Sime Darby’s plantations,” Hinojosa emphasized. “Importers should know that there are reputational, financial and legal risks associated with importing goods made by forced labor into the United States,” Hinojosa stressed.

CBP Acting Commissioner Mark A. Morgan said that the ban “demonstrates how essential it is for Americans to research the origins of the everyday products that they purchase.”

US Customs officials have come under pressure from lawmakers to act on the issue. In December, 25 Democratic lawmakers from the US House Ways and Means Committee called for a crackdown on the palm oil industry in Malaysia and Indonesia, asking CBP to consider a blanket ban on imports from both countries.

“The kinds of products impacted by these abhorrent labor practices are broad,” the Ways and Means Democrats emphasized in a letter written to the US CBP. “In our view, these odious labor practices and their pervasive impact across supply chains highlight the need for an aggressive and effective enforcement strategy, the letter said.

The letter further noted that “A robust enforcement strategy would give confidence to U.S. consumers that products on store shelves are not produced in illegal, and often abhorrent, working conditions.”

Photo by CEphoto, Uwe Aranas

Working conditions in Malaysia’s palm oil industry show pattern of abuse

The US decision to ban palm oil imports from Sime Darby comes in the wake of last year’s in-depth investigation by AP into labor abuses on plantations in Malaysia and Indonesia.

In its investigation, the AP questioned more than 130 current and former workers from two dozen palm oil companies. AP reporters also interviewed nearly 200 activists, government officials and lawyers, including some who helped trapped girls and women to escape.

The investigation found claims of a wide range of abuses in the palm oil industry, from rape and child labor to trafficking and outright slavery on plantations in Malaysia and Indonesia.

Sime Darby, which works with major brands like L’Óreal, Nestle and Unilever, employs a migrant workforce from countries including Indonesia and Bangladesh. At this point, it is unclear if these brands are considering action in the wake of damning reports of workers’ maltreatment at Sime Darby’s farms. Responding to the AP investigation, L’Oréal only said it “has put particular emphasis on supporting and empowering women, who are the first victims of many of the social and environmental challenges our world faces.”

In a separate statement, Unilever told AP that “the safety of women in global agricultural supply chains… including in the palm oil industry, remains a key concern.” As it appears, these statements from L’Óreal and Unilever are nothing but PR.

As for Sime Darby, the company said that it was assessing the situation and would engage with US CBP to address the concerns. “The allegations made suggest a breach in the implementation of [Sime Darby’s] own strict policies,” the company said in a statement.

It is unclear if the AP investigation and the US ban can significantly improve workers’ lives on Sime Darby’s plantations. The company may take cosmetic measures to improve the working conditions of some of its farms, in order to prepare a case against the US ban and push back against the media scrutiny. However, for any significant and permanent change to happen, Malaysia’s government needs to intervene. This doesn’t appear to be happening, as the government recently said that it has not received any reports of worker maltreatment in the palm oil industry.

As it stands, the government appears complicit in encouraging terrible work conditions. Malaysia’s palm oil producers have put forward a proposal to use prisoners for labor as the COVID-19 pandemic has exacerbated an existing labor shortage in the country. Ahmad Parveez Ghulam Kadir, director general of the Malaysian Palm Oil Board, a government body that works to promote the industry, said of the proposal, “It’s a win-win situation for the prisoners and for the industry.”

Workers’ rights experts believe that such programs would constitute institutionalized forced labor. “We should be wary of looking for alternatives that perpetuate poor labor practices, especially in the context of such unequal bargaining power,” said Liva Sreedharan, an expert in migrant and labor rights.

About the Author

Umair Jamal
Umair Jamal is a freelance journalist and a Ph.D. candidate at the University of Otago, New Zealand. He can be reached at and on Twitter @UmairJamal15