Palm oil is common in U.S. diets, yet it lives in obscurity. Big food manufacturers add it to a wide array of packaged foods — it is in Skittles, Oreos and Milky Ways, for example. But the name may be familiar only to those who read labels.
Now, though, palm oil is getting attention, much of it unwanted. One of the world’s largest palm oil producers is a Malaysian company dogged by allegations that it subjects migrant workers to forced labor, and it is facing legal petitions from groups that want customs officials to block the company’s palm oil from entering the United States.
Citing reports from the U.S. Department of Labor, academics and watchdog organizations, the groups say the Malaysian company, FGV Holdings Berhad, and its contractors lured migrants to plantations and subjected them to “slave-like” conditions. According to the complaints, the migrants have been ensnared in debt, forced to give up their passports, forbidden from leaving the FGV farms and compelled to sign contracts in languages they do not understand.
The company, which employs 20,000 or more migrants on Malaysian farms that spread over more than 800,000 acres, has supplied some of the world’s largest food companies. Procter & Gamble, Mars, Nestlé, Hershey, Pepsi and Mondelez have been listed as customers of palm oil produced by FGV.
“What’s appalling is how long this has been going on and how many times FGV has been asked to address this problem,” said Judy Gearhart, executive director of the International Labor Rights Forum, one of three nonprofit groups who filed a petition Thursday morning. “The companies buying palm oil from FGV have known about these problems since 2015. Yet these people are still trapped and living under conditions of forced labor.”
For the chocolate companies, the petitions mark the second key ingredient facing possible government restrictions based on labor abuses. With the urging of two U.S. senators, customs officials already are reviewing whether cocoa from Ivory Coast, the world’s largest producer, should be blocked from entering the United States because of pervasive child labor.
The petition filed on Thursday with U.S. Customs and Border Protection follows another filed this summer that was also aimed at blocking FGV palm oil from entering the United States. The first petition was filed in June by the ESG Institute, an outfit affiliated with a law firm, Grant & Eisenhofer.
The petitions cite evidence that FGV had exploited victims of trafficking, limited their movement and failed to provide them with adequate food and housing. The first petition also said there might be child labor on FGV plantations.
In June, FGV officials denied using child labor but did not specifically dispute the other allegations in the first petition. It said it was enacting reforms to “correct the situation.”
“We expect to correct all charges in respect of human rights abuses and violations … within the given deadline,” FGV Chairman Azhar Abdul Hamid wrote in a January letter to shareholders about earlier allegations.
The company said that in the future workers would be allowed to freely come and go from company premises and that foreign workers would be given the option of returning to their home countries.
But the company also said it would not soon give up its system of hiring migrant workers through contractors, a practice critics say can lead to debt bondage and forced labor.
“We are committed to ensure respect for human rights,” Nurul Hasanah Ahamed, head of group sustainability at FGV Holdings, said in an interview Thursday. “We are very serious in handling this.”
Their critics, however, said the abuses have not ceased.
“We have reports from people on the ground — from this year — that this is still happening,” said Deborah Elman, a director at Grant & Eisenhofer.
“They were hit with these allegations in 2015 and four years later and they’re still saying we’re making progress,” said Gearhart, whose group filed the petition with Rainforest Action Network and SumOfUs. “That’s not enough.”
Palm oil, a vegetable oil derived from the fruit of the African oil palm tree, winds up in a lot of U.S. foods: cookies, crackers, chocolate, cereals, breakfast bars, cake mixes, doughnuts, potato chips and margarine, among others. Sometimes it is used as a substitute for other fat, sometimes as a means of extending shelf life.
Its popularity as an additive has grown in recent years because it does not contain “trans fats,” which have been linked to coronary heart disease.
At the same time, however, the palm oil farms, most of them in Indonesia and Malaysia, have drawn repeated charges of irresponsibly eradicating tropical forests and abusing migrant workers, often by confiscating their passports and limiting their ability to leave the farms.
Forced labor of migrants to Malaysia has been reported on by the U.S. government, watchdog organizations and academics. In 2015, investigators discovered migrant camps and mass graves in Wang Kelian containing bodies of suspected Rohingya and Bangladeshi victims of extortion and torture.
Malaysian employers “exploit some migrant workers in labor trafficking on oil palm and agricultural plantations,” according to the U.S. State Department’s Trafficking in Persons report.
In November 2018, an industry group, the Roundtable on Sustainable Palm Oil, reported that there were indicators that forced labor had been used at FGV. The group cited evidence that workers were required to have written permission to leave plantations and that those who left without permission could be arrested.
“Several glaring practices in FGV’s recruitment process … strongly indicated the use of undocumented/illegal/trafficked workers by FGV and its contractors,” the report said.
The group suspended its certification of a portion of FGV’s operation. That certification was reinstated in August, officials said.
All of the major food companies say they have taken steps that ensure their palm oil has been “responsibly sourced” — that is, without environmental damage or human rights violations — mainly by urging their suppliers to meet industry guidelines and cutting off those who don’t.
A Hershey official said the company has instructed its suppliers to eliminate FGV palm oil from its supply chain.
Company officials at Mars and Nestlé said they buy FGV palm oil through their suppliers, though not directly from FGV. Both companies said they have asked for FGV to address the complaints.
A representative of Cargill, which supplies many food companies, said the company buys some palm oil from FGV-affiliated mills but does not bring that palm oil into the United States.
Officials with Procter & Gamble and Mondelez did not respond to requests for comment on this story.