Malaysia's largest palm oil company FGV Holdings defended its labour practices yesterday, saying it was disappointed with the United States authorities for banning imports from the company, citing forced labour.

FGV, the world's largest crude palm-oil producer, said it has worked towards rectifying its labour standards progressively since 2015, and it will continue to engage the US Customs and Border Protection to clear the company's name.

On Wednesday, the US agency said it was issuing a withhold release order on products from FGV after finding indications of forced labour in its production process.

The order came just over a week after a report in Associated Press alleged widespread human rights violations in oil palm plantations in Malaysia and Indonesia.

"FGV is disappointed that such a decision has been made when FGV has been taking concrete steps over the past several years in demonstrating its commitment to respect human rights and uphold labour standards," the company said. It noted that its efforts have been "well documented" and the issues raised by the report have been the subject of public discourse since 2015.

It stressed on the difference between its operations and those of the Federal Land Development Authority (Felda), a government agency that is FGV's biggest shareholder.

The AP report documented labour practices in oil palm plantations linked to Felda. "FGV would like to clarify that it is not the commercial arm of Felda," the company had said on Saturday.

Felda owns 34 per cent of FGV's shares, but FGV stressed that its operations are "unique and independent". It claimed that it does not employ refugees among its 15,000 foreign workers.

The AP report alleged that some of the exploited workers in Malaysian plantations are Rohingya refugees. FGV denied holding its workers' passports, another claim that surfaced in the report.

The North America sector, including Canada, accounted for 5 per cent of FGV's total revenue last year and is valued at RM700 million (S$230 million), down from RM800 million in 2018.

FGV has an oleochemical plant in in Washington in the US which produces products such as fatty acid cuts. The plant is the third-largest oleochemical player in North America.

FGV was previously known as the global arm of Felda before it was listed as Felda Global Ventures in 2012, in an initial public offering valued at RM10 billion, the second-biggest IPO that year after Facebook, and the biggest in Asia.

A Wall Street Journal report in 2015 also alleged poor labour standards in FGV plantations, and the company said it has since invested in rectifying its labour standards.