Palm oil is common in U.S. diets, but it lives in obscurity: Big food manufacturers add it to a substantial portion of packaged foods — it’s in Skittles and Milky Ways, for example — but the name may be familiar only to those who read labels.
Now, though, palm oil is getting attention. One of the world’s largest palm oil producers, a Malaysian company dogged by persistent allegations that it subjects migrant workers to forced labor, is facing legal petitions from two 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, 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 don’t understand.
Some of the world’s largest food companies have been supplied with palm oil from the company, which employs 20,000 or more migrants on Malaysian farms that spread over more than 800,000 acres. Procter & Gamble, Mars, Nestle, Hershey, Pepsi and Mondolez have been listed as customers of FGV or FGV-affiliated mills.
“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 palm oil petition filed on Thursday with U.S. Customs and Border Protection follows another filed this summer that also was 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. That petition cited evidence that FGV had exploited victims of trafficking, subjected the migrants to violence and failed to provide the workers with adequate food and housing. It also said there might be child labor on FGV plantations.
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.
The company said that in the future plantation workers would be allowed to come and go from company premises and that foreign workers would be given the option of returning to their home countries.
The company said, however, that it would not soon give up its system of hiring migrant workers through contractors, a practice that critics say leaves the company vulnerable to the deceptive hiring practices that can lead to debt bondage and forced labor.
“We are committed to ensure respect for human rights,” said Nurul Hasanah Ahamed, head of group sustainability at FGV Holdings. “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,” Gearhart said. “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. Sometimes it is used as a substitute for other fat, sometimes as a means of extending shelf life.
It has become increasingly popular with food manufacturers and consumers because it does not contain “trans fats,” which have been linked to coronary heart disease.
At the same time, the growing palm oil farms, most of them in Indonesia and Malaysia, have drawn repeated charges that they have been irresponsibly eradicating tropical forests and abusing migrant workers, often by confiscating their passports and limiting their ability to leave the farms.
All of the major food companies say they take steps that ensure that their palm oil has been responsibly sourced.
A Hershey official said the company has instructed their suppliers to eliminate FGV palm oil from their supply chain.
Company officials at Mars and Nestle 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, Pepsi and Mondolez did not respond to requests for comment on this story.