KUCHING: The Ministry of Plantation Industries and Commodities Industry (MPIC) has expressed regret and disapproval regarding the drastic action taken by the United States (US) to bar the entry of palm oil produced by Sime Darby Plantation Bhd (SDP) without giving the company an opportunity to defend itself.
Its minister, Datuk Dr Mohd Khairuddin Aman Razali, said while the US Customs and Border Protection (CBP) indeed had the right to issue a withhold release order (WRO) on palm oil exported by any party to the country, it disagreed for such action to be taken without allowing the company to prove whether the claim was baseless.
He said the Donald Trump administration had once again blocked palm oil shipped to the US market without referring to the Malaysian government on the validity of the allegation of forced labour in the industry.
“This incident is not a surprise to the (Malaysian) government as a similar action was previously taken against FGV Holdings Bhd (in September) based on the same claim that has been denied by the company,” the minister said in a statement.
According to the minister, it did not have a major impact on the financial and operational performance of FGV and, in fact, the US government is considering the petition to cancel the WRO against FGV’s products.
Therefore, he said, MPIC was confident that SDP would also launch a protest and deny the unfounded allegation.
Mohd Khairuddin acknowledged there had been an incidence of forced and child labour in the country’s palm oil sector in the past, but it was an isolated case based on a survey done in 2018. The findings were also forwarded to the US Embassy in Kuala Lumpur early last month.
Based on the study, he said, the government had always reminded industry players to be more responsible and not be involved in issues that could hurt the country’s economy.
“The Malaysian government, through MPIC, is committed that if the allegation made by the US is true, it will take appropriate and firm action on any company involved in forced labour,” Mohd Khairuddin said.
Effective yesterday, CBP has decided to detain palm oil and products containing palm oil produced by SDP and its subsidiaries, joint ventures, and affiliated entities in Malaysia.
According to CBP, the issuance of the WRO against SDP’s products is based on information that “reasonably indicates” the presence of all 11 of the International Labour Organisation’s forced labour indicators in SDP’s production process.