Sime Darby: Internal probe reveals no systemic forced labour issues

 

Sime Darby Plantation Berhad (SDP) says it had conducted internal assessments of its Malaysian operations and did not find any systemic issues to correlate with a Reuters report saying that forced labour allegations are threatening the company's future business dealings.

Referencing a Reuters report quoting four sources as saying that major palm oil buyers are seeking to block FGV Holdings and SDP from their global supply chain, SDP reiterated that its major customers have expressed support and are working closely with the company to understand the substance of the allegations better.

"Many of our customers have committed to sustainable sourcing and thus truly appreciate and understand our efforts to ensure our operations are managed well, sustainably and responsibly.

"SDP remains committed to addressing the withhold release order (WRO) issued by the United States Customs and Border Protection (CBP)" said SDP chief communications officer Eliza Mohamed in a statement today.

"In the absence of useful information from the original complainant to assist us, we have already conducted internal assessments of our entire Malaysian operations."

"Our findings do not reveal any systemic issues in our operations," she said.

Nevertheless, SDP says it will also engage independent assessors to ensure that it leaves no stone unturned in its quest to secure a completely safe and nurturing environment for all its workers, regardless of gender or nationality.

"Meanwhile, we have maintained regular engagements with all our customers to ensure they are updated and appraised of all developments," she added.

Palm oil is one of the world's cheapest and fastest-growing crops, but the industry has faced scrutiny over the years with rights groups blaming producers for vast deforestation in Southeast Asia and exploitative labour practices.

Malaysian palm oil has long had the reputation of being more sustainable than bigger rival Indonesia, and the two countries together control nearly 85 percent of the global production of palm oil - a ubiquitous commodity used in everything from cereal to soap.

However, sources in the industry told Reuters that companies now fear the risk to their own reputation if they buy from Sime Darby and FGV.

"We have instructed all of our suppliers globally to remove both Sime Darby and FGV from our supply chain; and have issued 'no buy orders' on both suppliers," General Mills said in an emailed statement to Reuters.

While chocolate maker Hershey said its North American suppliers had removed all Sime Darby volumes in compliance with the US order.

Reuters reported that some buyers including Nestle, Unilever and Hershey had suspended FGV since 2018 after industry watchdog Roundtable on Sustainable Palm Oil (RSPO) found "exploitative" labour practices in the company.

SDP is the world's biggest producer of palm oil certified as sustainable by the RSPO.

According to the report, Kraft Heinz, Nestle and Unilever said they were in discussions with SDP about the allegations. - Mkini