The interdiction of Malaysia’s palm oil and palm oil products by multinational corporations (MNCs) brings a serious repercussion, especially if it is based on groundless reasons.
US-based food company General Mills Inc was reported to have issued a global ‘No Buy’ order for imports by Sime Darby Plantation Bhd (SDP) and FGV Holdings Bhd following the withhold release orders (WROs) issued by the US on the two companies.
Industry expert MR Chandran — who is also a founding member of the Roundtable on Sustainable Palm Oil, or RSPO — said the banning of palm oil and its products is posing a ripple effect as other countries could take on it due to the nature of MNC operations.
“The repercussions to the action taken by the MNCs are huge. It is a damaging action as it is done with- out clear evidence or making known of the evidence that they found.
“General Mills is undoubtedly following the government of the country that they are operating in, should the order to withhold palm products from FGV and SDP come from US Customs and Border Protection (CBP) itself.
“If they are conforming to the CBP’s regulations and boycott SDP and FGV in the US, they have to do it in other countries too,” he told The Malaysian Reserve (TMR).
Last year, the CBP issued two separate WROs for SDP and FGV, along with their subsidiaries and joint ventures based on the unsustainable labour practices allegations.
Apart from players in the oil palm industry, the CBP also issued a WRO on products by Top Glove Sdn Bhd, TG Medical Sdn Bhd and Top Glove Corp Bhd’s subsidiaries. All three detention orders currently have ‘Active’ status.
To date, the US has issued 60 WROs to manufacturers from 11 countries since 1991, and Malaysia is currently recording the second-highest number of companies being issued the detention order for its exports product coming into the US.
Reuters recently reported that major palm oil buyers, including General Mills, are looking to block orders on products by SDP and FGV due to their customers’ rising concerns.
Chandran said CBP’s intention on the WROs, particularly on Malaysian palm oil, is baffling as the detention order on SDP, in particular, is based on the groundless allegation, including lack of evidence.
“I don’t think CBP would have unilaterally acted based on the reports by Liberty Shared and the Associated Press (AP) alone.
“It is unusual for CBP not to be given evidence. Liberty Shared has made all these sorts of allegations, including rape. If that is the case, SDP has the right to know, so they can do their investigations,” he said.
The AP in a report stated it had interviewed more than 130 current and former plantation workers from two dozen palm oil companies in Malaysia and Indonesia, and found several red flags of labour practices, including rape, child labour, trafficking and slavery.
Hong Kong-based Liberty Shared also claimed to find similar malpractices which triggered the ban on SDP’s palm oil.
Chandran added that the malpractice allegations also raise some reservations on standard certification bodies should the serious malpractices accusations be true.
“In the case of SDP, they are the largest certified palm oil producer by the RSPO in the world, which are also certified by the Malaysian Sustainable Palm Oil.
“Many of their mills are certified by the International Sustainability and Carbon Certification, or ISCC, and the group itself has ISO certifications.
“They have multiple certifications and it is puzzling because the allegations indicate that the auditors of all the certifications were not doing their job or miss the reports on the allegations by Liberty Shared and AP,” Chandran said.