There is growing concern about the import ban on palm oil products into the United States.
A few companies were slapped with the withhold release order (WRO) by the US Customs and Border Protection (CBP) agency on claims of forced labour.
The affected companies have submitted evidence to clear their names to secure the entry of their goods into the US market.
The industry is also seeking more lasting solutions. About 100 people joined the recent online discussion on the issue hosted by the Law School of Universiti Malaya.
The webinar proved very informative. Constructive solutions were proposed.
Apparently, as explained by the Malaysian Palm Oil Board (MPOB) officer based in Washington, the US law on forced labour is not new. It has been around for many decades.
But, in the original act, only imported products which competed with locally produced US products were subjected to such a ban. Other products were spared from the ruling.
This changed in 2016, during the President Barack Obama administration, when the law was made to apply to all imported products. Since then, many imported products were affected.
Palm oil is not the first. According to information shared during the webinar, we have been aware of this all along.
The government has in fact created laws to get businesses to conform to the International Labour Organisation standards on forced labour. But we have been weak on enforcement and implementation.
Some of the criteria relate to poor living conditions of workers, the withholding of workers' passports and very low pay.
Under the requirements for the import of migrant labour, the amount that workers have to pay to secure jobs here can hold them in bondage for years, therefore forcing them to work to be relieved from such bondage.
All the panellists agreed that the issue of forced labour is here to stay. There is a good chance that the ruling may be adopted by other countries. This is in line with the new ESG demand on businesses globally.
Some say those businesses which fail to embrace ESG (good practices in environment, social and governance), will face obstacles in their business dealings.
In Malaysia, sectors which mostly use migrant labour include construction, plantation, manufacturing and food and beverage (F&B). The pressure is less for construction and F&B sectors since they are not exporting.
Apart from the US import ban, the palm oil industry also faces labour shortages.
With the current historic palm oil price touching RM7, 000 per ton, the shortage of migrant labor causes the industry to lose billions of ringgit in unharvested oil palm fruits. It appears that this issue of labour shortage won't go away anytime soon.
Unless the problems of import ban and labour shortage are addressed, the palm oil industry will face hard times in the coming years.
A planned phasing out of the industry's addiction to cheap migrant labour should receive serious consideration.
The industry must not discount a more concerted investment in technology to wean away from being over reliant on cheap labour.
Over the years, the industry has implemented many mechanisation approaches to ease their dependence on labour. But the mechanisation of the harvesting operation remains unresolved.
The industry may need to relook the bottlenecks in the adoption of technologies. There are now labour-saving technologies available as a result of years of investment in research and development.
They include robotics or drones, artificial intelligence (AI) and digitalisation. We need to not only boost our investment in R&D, but also tap into the best research brains locally and internationally to develop such technologies.
Using MPOB as the anchor R&D centre, a new research alliance on mechanisation and automation should be established to deliver this.
The research alliance should bring in R&D initiatives at universities and other research centres, such as MIMOS and SIRIM. The alliance should also explore links with international R&D centres which specialise in the relevant automation technologies.
Otherwise, such labour concerns will continue to haunt the industry in years to come.
Professor Datuk Dr Ahmad Ibrahim, Tan Sri Omar Centre for STI Policy, UCSI University