Malaysian Palm Oil Giant Hit With US Ban Over Abuse Concerns

The United States has banned imports from a Malaysian palm oil giant that supplies household titans like Procter & Gamble and Nestle over concerns its workers face physical and sexual violence and other abuses.

US Customs and Border Protection (CBP) announced the ban on palm oil imports from FGV Holdings -- one of Malaysia's top producers -- on Wednesday following a year-long probe that also found indications the firm was witholding wages and using child labor.

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

Activists claim the industry drives the destruction of rainforests to make way for plantations and that its low-paid foreign workers frequently face abuse.

"The use of forced labor in the production of such a ubiquitous product allows companies to profit from the abuse of vulnerable workers," said CBP official Brenda Smith.

"These companies are creating unfair competition for legitimately sourced goods and exposing the public to products that fail to meet ethical standards."

The American decision, which came into force Wednesday, means that all palm oil and palm oil products made by FGV and related companies are barred from US ports of entry.

The investigation was triggered after a coalition of NGOs filed a complaint against FGV.

The company said it was "disappointed" by the move when it had been "taking concrete steps" in recent years to improve standards at its operations.

"FGV does not tolerate any form of human rights infringements or criminal offence in its operations," it said in a statement.

Steps include improving procedures in recruiting migrant workers, a commitment to paying foreign worker recruitment fees, and ramping up investment in improving their accommodation, it said.

Malaysian palm oil companies rely on low-paid foreign workers, including from Indonesia, India and Bangladesh, but critics complain they often have to pay hefty fees to secure jobs and are left saddled with debt.

SumOfUs, one of the rights groups that filed the complaint against FGV, hailed the move as "a strong reminder that no company, however big and powerful it may be, is above the law".

The CBP is increasingly using its powers to ban goods from overseas it fears are produced using forced labor.

Last month, it blocked a range of Chinese products made in the Xinjiang region, including from a center that it branded a "concentration camp" for Uighurs and other Muslim minorities.