SUBJECT
On 26 July 2015, the Wall Street Journal (WSJ) published an article alleging that Felda Global Ventures (FGV) had breached labour conditions at its plantations. The allegations alluded to forced labour and that the workers were not paid the minimum wage. The article also alleged that the health and working conditions of workers were neglected, and their passports withheld.
In April 2016, Aidenvironment published an analysis that indicated FGV had cleared 880ha of identified High Conservation Value (HCV) peatlands in two concessions in West Kalimantan – PT Citra Niaga Perkasa (PT CNP) and PT Temila Agro Abadi (PT TAA).
In July 2017, Greenpeace published a Palm Oil Alert against Federal Land Development Agency (FELDA)/ FGV on:
- Illegality – Violation of Malaysian labour laws and development of peat in Indonesia post-moratorium
- Deforestation – Clearance of natural forest
- Peatland development – Development of areas mapped as peat
- Exploitation – Exploitation of plantation workers, including modern day slavery
On 19 September 2018, Greenpeace published Final Countdown, Now or Never To Reform Palm Oil Industry report alleging FGV on the extensive labour rights abuses documented in its operations including workers to pay recruitment fees and passport retained by the company.
PROGRESS
2015
July– Publication of WSJ against FGV alleging labour exploitation
August – Conducted internal and external investigation on the claims
September – Conducted ASI verification
2016
January – Conducted Wild Asia verification
October – Appointed The Forest Trust (TFT) to carry out Support for Transformation (Social Issues) Initiatives, focusing on Forced & Bonded Labour, Minimum Wage, and Health & Safety
2017
March – FGV adopted TFT’s report “Business Engagement-Support for Transformation-Social Issues 2016/2017”
– FGV signed an MoU with SUHAKAM, a national human rights institution, to collaborate in addressing human rights issues and developing a human rights action plan
August – FGV adopted the Social Compliance & Human Rights (SCHR) Action Plan to address the gaps identified in the WSJ report, Wild Asia report, and TFT report including remedial action to resolve foreign workers and human rights issues
– FELDA pledged to no deforestation, no conversion of HCV areas, no new planting on peat, irrespective of when the land was acquired by the Group; adopt Best Management Practices (BMPs) for existing peatland estates, and to rehabilitate peatland that have been planted after 25 August 2016; commit to stop planting on peatland irrespective of when the land was acquired. Land development work at PT TAA and PT CNP have been permanently discontinued. FGV will adopt the RSPO’s land rehabilitation guideline and consult with Badan Restorasi Gambut Indonesia on the rehabilitation programme.
Apical had engaged with FELDA/FGV on the allegations of non-conformities, and have received letters from FGV on updates and its progress on actions taken. We have consulted TFT and based on its Support for Transformation Report, Apical recognises the recent progress made by FGV, including the commitment to stop deforestation in the reported areas, and upgraded FGV’s sustainability policy to address HCV and peat issues more effectively.
Apical will continue engaging with FELDA/FGV and monitor the development of the case.
In 2018, there was no CPO delivered by FGV to Apical’s refineries in Indonesia due to commercial and other reasons. However, Apical is maintaining business relations with FGV so as to engage with FGV on its sustainability progress and updates.
Apical have been receiving regular updates from FGV, especially on its progress implementation SCHR action plan and related policies.
On the deforestation of natural forest issue raised in May 2018, FGV has committed to cease land development works at PT CNP and PT TAA.
FGV adopts the RSPO’s land rehabilitation guideline and consult with Badan Restorasi Gambut Indonesia on the rehabilitation program.
2018
December – FGV informed that the company is working together with RSPO to address all the issues. FGV has frozen all recruitment of foreign workers using third party contractors and is reviewing internal processes and the personnel responsible in this area.
2024
January – FGV has reported progress in relation to reimbursement of fees for their foreign workers – FGV Makes Significant Strides in Addressing US Customs Withhold Release Order: RM72.2 mil reimbursed to workers; strengthened recruitment procedures for no recruitment fee. – FGV Holdings Berhad
February – Based on the ban that was issued by the United States Customs and Border Protection, FGV states that it aims to get the import ban lifted by the end of 2024 – Malaysia: US Customs and Border Protection bans palm oil imports from FGV Holdings over concerns that workers face physical & sexual violence – Business and Human Rights Centre
2025
July – FGV is taking meaningful steps to address the allegations raised against them, including strengthening labour practices, enhancing worker protection, implementing comprehensive remediation measures and undertaking independent audits. We consider this case closed.
2026
January – With the lifting of the Withhold Release Order by the US Customs and Border Protection and recognising FGV’s progress in addressing these issues, Apical is satisfied that FGV has taken reasonable measures to address past concerns.
