KUALA LUMPUR (AFP) - Migrant workers employed by a Malaysian palm oil giant have faced mistreatment ranging from physical abuse to poor living conditions, a rights group said Wednesday (June 30).

IOI Corporation is the latest producer of the commodity to face such allegations, and it follows the United States banning imports from two other Malaysian palm oil firms over abuse claims.

Palm oil is a common ingredient in items ranging from processed foods to cosmetics, with Malaysia and neighbouring Indonesia producing 85 per cent of the world's supply.

But activists have long claimed that low-paid migrant workers on plantations face abuse, and also blame the industry for driving destruction of rainforests to make way for agricultural estates.

The latest allegations come in a report by rights group Finnwatch, which has for several years been documenting problems at IOI, a supplier to consumer giants including Nestle and Unilever.

The Finland-based group, which focuses on corporate responsibility, interviewed Indian workers at an IOI palm oil estate in central Pahang state.

The workers complained accommodation was poor, with some forced to sleep on the floor as they were not given beds, and toilets and kitchens in bad condition, the report said.

Workers were later given beds after Finnwatch complained.

A staff member is alleged to have slapped workers, some complained of paying hefty recruitment fees, in breach of IOI's own policies, and they were not given copies of their employment contracts, the group said.

They were also unhappy with the firm's complex, performance-based wage policies, it said.

Finnwatch said some problems had been rectified after they were raised, but the complaints highlighted "gaps in the IOI Group's wider recruitment and wage policies, and commitment to respect for human rights".

IOI did not immediately comment on the report.

Last year, the US banned imports of palm oil from Malaysian firms Sime Darby Plantation and FGV Holdings over allegations they mistreated migrant workers.