Leading CPG manufacturers linked to labour rights abuses in palm oil supply chain

One mill and four plantations belonging to Malaysia’s biggest palm oil producer, FGV Holdings, have been suspended due to labour rights abuses. This decision is part of an investigation by a panel at the global palm oil industry watchdog, Roundtable on Sustainable Palm Oil (RSPO). FGV – formerly known as FELDA – has been known to supply palm oil to leading consumer packaged goods companies such as Unilever, Mars, PepsiCo, Procter & Gamble, Hershey’s and Nestlé as well as to ingredients supplier Cargill.

The complaint against FGV was originally filed by the Wall Street Journal in 2015, alleging the use of forced labour and poor living and working conditions, as well as unfair wages. The RSPO panel found wide-ranging issues that were in breach of its sustainability standards, including that workers’ movements were restricted as their passports were taken away, deductions in wages were not transparent and workers did not get adequate access to affordable food supplies.

In a letter to FGV dated 28 November and published on RSPO’s website, the panel said that the palm oil producer may have been complicit in human trafficking in relation to the company’s outsourcing of foreign workers to contractors. In response, FGV said in a statement that it has frozen all new recruitment of workers from external contractors across its operations with immediate effect, and that it will negotiate to directly employ these workers where possible. It will also immediately absorb the costs of basic necessities, including food supplies given to its workers.

Widespread illegal labour violations

“With this decision, the RSPO has again failed to adequately hold accountable one of its member companies found guilty of widespread illegal labour violations”, commented Robin Averbeck, Agribusiness Campaign Director for Rainforest Action Network (RAN), as the organization called for global palm oil buyers to hold palm oil companies to account. Several of the CPG companies concerned have pledged to launch their own investigations, and Unilever claims to have not worked with the supplier since the beginning of 2018.