Trump administration to block second-hand palm oil in Malaysia amid forced labor discoveries

Trump administration to block second-hand palm oil in Malaysia amid forced labor discoveries

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It is the latest in a series of customs restrictions and border protection designed to prevent products made with forced labor from entering the US market.

CBP issued a “withheld release order” on Wednesday, allowing the agency to hold shipments of palm oil and palm oil products produced at Sime Darby Plantation Berhad.

“Palm oil is an ingredient in many products that American consumers buy and use. And I think it is important that manufacturers and importers are aware of where they are most at risk from forced labor and demand that their suppliers are adhering to the protection of rights. their workers, “said Ana Hinojosa, executive director of CBP’s Trade Remedy Law Enforcement Directorate.

After a months-long investigation into alleged labor abuses, CBP determined that the company’s palm oil production in Malaysia met the criteria for stopping imports into the U.S.

Sime Darby Plantation Berhad is the world’s largest oil palm plantation company by planted area and produces about 20% of global production by capacity, according to the company.
This is the second order focused on Malaysian palm oil in recent months. Earlier this year, CBP blocked palm oil imports from FGV Holdings Berhad, an agricultural company based in Malaysia after a year-long investigation.

The latest investigation found evidence of debt bondage, poor living and working conditions, poor sanitation, manipulated wages and excessive overtime at Sime Darby Plantation Berhad, Hinojosa told CNN.

“In many cases, we also find cases of physical violence, sexual violence, intimidation,” she said.

Hinojosa said that the “vast majority” of palm oil comes from Malaysia and Indonesia. She said that palm oil plantations in Malaysia are very remote areas – far from transport and communication.

The US imported approximately $ 410 million of crude palm oil from Malaysia in fiscal 2020, which constituted approximately 31% of total crude palm oil imports from the US, according to preliminary CBP data. This does not include products that include palm oil.

In many cases, she said, there are armed guards on these plantations that restrict the movement of workers and there is a “strong connection” between forced labor and countries or industries that are heavily dependent on migrant workers.

Sime Darby Plantation Berhad employs approximately 24,800 migrant workers, who represent 63% of its local workers in Malaysia, according to CBP.

CBP issued 13 orders aimed at forced labor practices in the last fiscal year, which ended in September 2020.

In late November, CBP announced that it would stop shipments of cotton and cotton products from a major cotton producer in the Xinjiang region of western China due to forced labor issues.
The US has banned the import of goods produced by forced labor since the early 1930s, but enforcement was extremely sparse. A 2016 change in the law that ended the exceptions, along with increased awareness and a boost from then CBP Commissioner Gil Kerlikowske encouraged the agency to use its authorities more aggressively, agency officials previously told CNN.

During the Trump administration, the agency stepped up its efforts in this area.

“One thing we are sometimes asked is, ‘Is this going to end the change of government?’, And I would say it is a cross-cutting and very bipartisan issue,” said Hinojosa.

Although CBP has yet to delve into Biden’s transition team on forced labor issues, Hinojosa predicted that this would remain a priority for the agency.

“You will see a lot more of that in the coming months and years,” she said.

Update: After the story was published, Customs and Border Protection reported that it provided an inaccurate number of Sime Darby Plantation Berhad’s production capacity to Malaysia. This story has been updated with company figures.

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