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US Palm Oil Ban: Why Are MAFI and MITI Silent?

US Palm Oil Ban: Why Are MAFI and MITI Silent?
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By Charles F Moreira

On 30 December 2020, almost six months ago, the U.S. Customs and Border Protection (CBP), which comes under the United States Department of Homeland Security, issued a press release on it website stating:-

Effective December 30, 2020, U.S. Customs and Border Protection (CBP) personnel at all U.S. ports of entry will detain palm oil and products containing palm oil produced by Sime Darby Plantation Berhad and its subsidiaries, joint ventures, and affiliated entities in Malaysia.

The issuance of a Withhold Release Order against Sime Darby Plantation palm oil is based on information that reasonably indicates the presence of all 11 of the International Labour Organization’s forced labor indicators in Sime Darby Plantation’s production process.

The eleven Forced Labour Indicators listed in a booklet published by the International Labour Organization (ILO) are:-

  • 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
  • Excessive overtime

The presence of a single indicator in a given situation may in some cases imply the existence of forced labour. However, in other cases you may need to look for several indicators which, taken together, point to a forced labour case. Overall, the set of eleven indicators covers the main possible elements of a forced labour situation, and hence provides the basis to assess whether or not an individual worker is a victim of this crime.

https://www.ilo.org/wcmsp5/groups/public/—ed_norm/—declaration/documents/publication/wcms_203832.pdf

This ban follows a ban by the CPB on 30 September 2020 on similar grounds upon palm oil and palm oil products produced by FGV Holdings Berhad, its subsidiaries and joint-ventures, and the CBP’s ban on 15 July 2020 on similar grounds upon medical glove maker Top Glove Corporation Berhad,which is still in force until today.

In the Federal Register, Vol. 86, No. 58, dated 29 March 2021, the CPB stated:-

This document notifies the public that U.S. Customs and Border Protection (CBP), with the approval of the Secretary of Homeland Security, has determined that certain disposable gloves, have been mined, produced, or manufactured in Malaysia by Top Glove Corporation Bhd with the use of convict, forced or indentured labor, and are being, or are likely to be, imported into the United States.

This Finding applies to any merchandise described in Section II of this Notice that is imported on or after March 29, 2021. It also applies to merchandise which has already been imported and has not been released from CBP custody before March 29, 2021.

https://www.govinfo.gov/content/pkg/FR-2021-03-29/pdf/2021-06393.pdf

According to an Associated Press (AP) report on 31 December  2020, these bans were, “triggered by petitions filed by non-profit groups and a law firm and came in the wake of an in-depth investigation by  AP into labour abuses on plantations in Malaysia and neighbouring Indonesia, which together produce about 85% of the $65 billion supply of the world’s most consumed vegetable oil.”

The “in-depth” investigation referred to was published by AP on 24 September 2020:-

https://apnews.com/article/virus-outbreak-only-on-ap-indonesia-financial-markets-malaysia-7b634596270cc6aa7578a062a30423bb

Sime Darby Plantation

On 9 September 2020, Bernama reported “Sime Darby Plantation Bhd (SDP) is looking into getting parolees to join the plantation industry due to a major shortage of workers following the COVID-19 pandemic.”

On 24 September 2020, the New Straits Times (NST) wrote “Inmates are given the chance to have a fresh start in life through the Corporate Smart Internship Programme (CSI) by Sime Darby Plantation Bhd in collaboration with the Malaysian Prisons Department.”

Soon after on 28 September 2020 the NST wrote “Foreign Workers (at SPB) Satisfied with Wages, Benefits.”

On 29 September 2020, Rian Maelzer of China Global Television Network (CGTN) wrote “Malaysia’s multi-billion dollar palm oil industry has long depended on low-paid foreign workers. Now, it’s suffering from an acute labor shortage after many of those workers left during the coronavirus pandemic, and the government imposed a freeze on migrant workers entering the country. Businesses are now looking to locals, including prison parolees, to try to fill some of the shortfall.”

On 18 December 2020, the NST wrote that SDP was “Helping Foreign Workers Return Home Safely.”

On 8 April 2021, Free Malaysia Today wrote “Sime Darby Plantation has brought back over 100 migrant workers from Bangladesh as part of a pilot scheme to overcome Covid-19 labour shortages.”

So OK, SDP faced a shortage especially of migrant labour due to the COVID-19 pandemic and was providing opportunities for prisoners who had served their time or after remission of their sentences as well as existing prison inmates with work and opportunities to learn new skills which they would otherwise be highly unlikely to get due to their criminal record.

Such moves would be considered as progressive in many of the western liberal-democracies, including some more progressive cities and states of the United States, so why does the United States impose such a ban on the import of SDP’s products blindly based upon “reasonable indication” that SDP’s actions meet one or more of the ILO’s Forced Labour Indicators without considering the specific nuances.

The CBP’s bans have already negatively impacted both SDP’s and FGV’s sales, which in turn negatively impact their employees both migrant and Malaysian.

For instance, on 8 February 2021, Reuters reported that “major palm oil buyers are seeking to block FGV Holdings and Sime Darby Plantations from their global supply chain” after CBP’s ban.

The Reuters report continues that U.S. food company General Mills said that it had issued a global ‘no buy orders’ on both companies, and that sources had said that other buyers had also requested suppliers to reduce or exclude the two companies’ products for supplies entering not only the United States, but also Europe, Australia and Japan over the CBP’s allegations of “forced labour”.

An allegation is “a claim or assertion that someone has done something illegal or wrong, typically one made without proof”, according to the Google English Dictionary provided by Oxford Languages, so the CBP’s bans are not based upon reliable proof determined by the CBP or its agents.

In a press release on 2 October 2020, the Malaysian Palm Oil Certification Council (MPOCC) expressed great concern over the CBP’s ban against a Malaysian plantation company over “forced labour, abuse, deception, physical and sexual violence, intimidation and threats and the retention of workers’ identity documents” allegations and that under the Malaysian Sustainable Palm Oil (MSPO) certification scheme, which is  mandatory  across  for  the whole industry, there are clear  and  strong requirements that workers’ rights and health  and  safety  and no  forms of forced or trafficked labour are employed.

Also, that all  MSPO  certificate  holders  must abide  by Malaysian  laws and regulations  which  includes  the Immigration  Act  670  and  Anti-Trafficking  in Persons and Anti-Smuggling of Migrants Act (2007)

The MPOCC added that  it is a cultural norm in the rural Asian and Malaysian communities, for children  to  accompany  their  parents  or  guardians at  work  in  the  agricultural sector during off-school  hours for social  safety  reasons, in which case the children may wish to help their parents to pick some loose fruits but this should not be construed as child labour which is forbidden under the Employment Act 1955 and further stipulated in Act 670.

On 9 March 2021, The EDGE Markets reported that the “The EU-Malaysia Chamber of Commerce and Industry (Eurocham) is monitoring the situation when it comes to the US Customs and Border Protection (US CBP)’s Withhold Release Orders (WROs) on palm oil and palm products produced by FGV Holdings Bhd and Sime Darby Plantation Bhd.”

Conspicuous silence

Conspicuously silent on these bans are the Ministry of Agriculture and Food Industries (MAFI) and the Ministry of International Trade and Industry (MITI), as well as their respective ministers Datuk Seri Dr Ronald Kiandee and Dato’ Seri Mohamed Azmin Ali, either in their respective ministries’ press releases or in the various media reports.

None of MAFI’s press releases in 2020, the last dated 16 December 2020 speak about this ban and we are unable to find any of its 2021 press releases on its website. However, to be fair, its press releases are mostly about domestic Malaysian issues related to agriculture, food supply and COVID-19, so perhaps international issues are not part of MAFI’s portfolio.

https://www.mafi.gov.my/kenyataan-media-2020

On the other hand, matters of international trade are part of MITI’s portfolio but digging through MITI’s media statements in 2020, we found only one dated 29 July 2020 entitled Miti Pushes For Awareness On Labour Standards Compliance Among Manufacturers which was about a MITI seminar addressing labour  standards  compliance  issues  among  manufacturers,  particularly  on  foreign workers management, which was shortly after the Top Glove ban but well before the SDP and FGV bans. The 2020 list is here:-

https://www.miti.gov.my/index.php/pages/view/7284

There were no MITI press releases about the ban amongst its 2021 press releases.

https://www.miti.gov.my/index.php/pages/view/5000?mid=67

This is rather curious, especially when at times like these when Malaysia is paying out financial assistance to citizens and businesses which have been adversely affected by the COVID-19 pandemic and requires every sen of foreign revenue which we can get, especially when these bans are based upon mere allegations by parties and organisations both domestic and foreign which may have a political or some other agenda against palm oil or the Malaysian government.

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