Cleared of forced labour violation, Sime Plantation can resume palm oil exports to the US

ALMOST a year after implicating Sime Darby Plantation Bhd (Sime Plantation) with the use of forced labour in the production of its palm oil and derivative products, the US Customs and Border Protection (CBP) has on Jan 31 cleared the Malaysian planter of any wrongdoing.

“CBP has now determined based upon additional information that such merchandise is no longer being produced with the use of forced labour in violation of section 307 of the Tariff Act of 1930 as amended,” the US Department of Homeland Security pointed out in a determination document.

Recall that on Jan 28 last year, the US CBP had issued a finding that certain palm oil and derivative products made wholly or in part with palm oil produced by Sime Plantation, its subsidiaries, and joint venture that were produced with the use of forced labour were being imported into the US.

The CBP had earlier on Dec 16, 2020 issued a withhold release order (made effective on Dec 30 that year) on “palm oil,” including all crude palm oil (CPO) and palm kernel oil as well as derivative products made wholly or in part with palm oil traceable to Sime Plantation, its subsidiaries and joint ventures in Malaysia.

The order came about after the CBP obtained information that “reasonably indicates” the presence of all 11 of the International Labour Organization’s (ILO) forced labour indicators.

Among these indicators include restriction of movement, physical and sexual violence, intimidation and threats, retention of identity documents, withholding of wages, and excessive overtime.

“Through its investigation, CBP determined that there was sufficient information to support a finding that the Sime Plantation, its joint ventures, and subsidiaries were using forced labour on Sime Darby’s plantations in Malaysia to harvest fresh fruit bunches which are used to extract palm oil and produce derivative products,” explained CBP.

“Since that time, Sime Plantation has provided additional information to CBP which CBP believes establishes by satisfactory evidence that the subject palm oil and derivative products are no longer mined, produced, or manufactured in any part with forced labour.”

On April 26 last year, Sime Plantation submitted a report to the CBP which will go towards lifting the WRO imposed on the company since December 2020.

In a Bursa Malaysia filing, Sime Plantation said the report includes a detailed assessment of the company’s Malaysian operations mapped against each of the ILO’s forced labour indicators.

Eight Malaysian companies, including those involved in palm oil and glove manufacturing, were previously on a list of firms which had their products banned from entering the US due to “reasonable evidence” of forced labour practices.

Two glove manufacturers, Top Glove and WRP Asia Pacific, have since been removed from the list after satisfying CBP’s requirements.

At 10.18am, Sime Plantation was down 1 sen or 0.22% to RM4.44 with 209,800 shares traded, thus valuing the company at RM30.71 bil. – Feb 3, 2023

Subscribe and get top news delivered to your Inbox everyday for FREE