Malaysian palm oil giant hit with US ban over abuse concerns

The United States has banned imports from a Malaysian palm oil giant whose products are found in numerous everyday goods worldwide over concerns its workers face a litany of abuse.  

Palm oil is a common ingredient in items ranging from processed foods to cosmetics, and Malaysia is the second-biggest producer of the commodity after neighbouring Indonesia. 

Together, the countries produce 85 percent of the world's supply.

But the industry has long been controversial, with activists saying it drives the destruction of rainforests to make way for plantations and workers frequently face abuse.

US Customs and Border Protection (CBP) announced late Wednesday it was banning imports of palm oil from FGV Holdings, one of Malaysia's top producers of the commodity, following a year-long investigation.

The probe found indications workers were subject to physical and sexual violence, intimidation and had their wages withheld, while there were also concerns the company was using child labour.

"The use of forced labour in the production of such a ubiquitous product allows companies to profit from the abuse of vulnerable workers," said CBP official Brenda Smith.

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

The American decision, which came into force Wednesday, means that all palm oil and palm oil products made by FGV and related companies cannot enter the US.

FGV said it was "disappointed" by the move when it had been "taking concrete steps" in recent years to improve standards at its operations. 

"FGV does not tolerate any form of human rights infringements or criminal offence in its operations," the company said in a statement.

Steps include improving procedures in recruiting migrant workers, a commitment to paying foreign worker recruitment fees, and ramping up investment in improving their accommodation, it said. 

Malaysian palm oil companies rely on an army of low-paid foreign workers, from countries including Indonesia, India and Bangladesh.

But critics complain that workers sometimes have to pay large fees to agents to secure jobs in Malaysia, which leaves them saddled with huge debts.