US blocks imports of palm oil from Malaysia's Sime Darby

It is the third US ban on a Malaysian firm last year over forced labour allegations

Palm oil is used in everything from food to cosmetics to biodiesel. It is mainly produced in Malaysia and Indonesia. The ban on Sime Darby, the world's largest palm oil company by land size and seen as a leader in sustainably produced palm oil, could
Palm oil is used in everything from food to cosmetics to biodiesel. It is mainly produced in Malaysia and Indonesia. The ban on Sime Darby, the world's largest palm oil company by land size and seen as a leader in sustainably produced palm oil, could be lifted if remedial action is taken.PHOTO: REUTERS

KUALA LUMPUR • The United States banned imports of palm oil from Malaysian producer Sime Darby Plantation from Wednesday over allegations of forced labour in the production process, the US Customs and Border Protection (CBP) said.

The ban on Sime Darby, the world's largest palm oil company by land size and seen as a leader in sustainably produced palm oil, is another blow to an industry that has faced mounting allegations of labour and human rights abuses.

Palm oil is used in everything from food to cosmetics to biodiesel. It is mainly produced in Malaysia and Indonesia, where the producers are also blamed for wide-scale deforestation and habitat destruction.

Sime Darby is the third Malaysian company to be slapped with a US ban last year over forced labour allegations after FGV Holdings, another Malaysian palm oil producer, and Top Glove, the world's biggest producer of medical-grade latex gloves.

The CBP said it issued a "withhold release order" on Sime Darby, which will allow it to detain shipments based on suspicion of forced labour involvement under longstanding US laws aimed at combating human trafficking, child labour and other human rights abuses.

A spokesman for Sime Darby did not comment immediately on the ban and allegations.

The CBP said the order was based on a months-long investigation that reasonably indicated the presence of the International Labour Organisation's forced labour indicators at Sime Darby plantations.

Malaysia relies on over 337,000 migrant workers from countries like Indonesia, India and Bangladesh to harvest the palm fruit.

The ban on Sime Darby, effective from Wednesday, could be lifted if remedial action is taken.

The CBP said the United States imported about US$410 million (S$540 million) worth of crude palm oil from Malaysia in the fiscal year that ended in September 2020, accounting for just over 30 per cent of the US total palm oil purchases.

Sime Darby says its annual exports to the US total about US$5 million.

In July, Hong Kong-based anti-trafficking group Liberty Shared petitioned the CBP to ban Sime Darby products, citing evidence of labour abuse.

Sime Darby said at that time that the allegations contradicted the group's public commitments to responsible agriculture and human rights.

"We believe that we have a responsibility to respect, support, and uphold fundamental human rights as expressed in the Universal Declaration for Human Rights and the United Nations Guiding Principles on Business and Human Rights," the company says on its website.

REUTERS

A version of this article appeared in the print edition of The Straits Times on January 01, 2021, with the headline 'US blocks imports of palm oil from Malaysia's Sime Darby'. Subscribe