KUALA LUMPUR (Aug 30): FGV Holdings Bhd has reiterated its commitment to focus on enhancing its labour practices under its affiliation to US-based Fair Labor Association (FLA).

This is aimed at addressing the Withhold Release Order (WRO) issued by the US Customs and Border Protection (CBP) against its palm oil and palm oil products, the plantation giant said. 

In a virtual press conference today, FGV updated that the implementation of FGV-FLA action plan is ongoing to improve labour practices covering various aspects including recruitment process, human rights training, grievance mechanism and monitoring systems. 

"We have been working together with a few other NGOs also under the umbrella initiative with FLA, including Tenaganita, to enhance the knowledge and awareness of our migrant workers with regards to their rights. 

"We are currently working on enhancing our previous mechanisms to ensure that our workers have a direct avenue to lodge their complaints or raise any issues through technology to the management," said FGV’s Group Sustainability Division head Nurul Hasanah Ahamed Hassain Malim. 

However, Nurul Hasanah added that an independent external assessment by FLA involving on-the-ground assessments, which was scheduled to be conducted in July, was now tentatively postponed to November due to the pandemic. 

Nurul Hasanah also updated that FGV has received proposals from nine organisations to be appointed as an independent audit firm to conduct an assessment of the group's operations against the 11 International Labour Organization indicators of forced labour, as recommended by the CBP. 

"Of course we want it to be addressed immediately, but the timeline will only be confirmed upon the finalisation of the appointment of the auditor. So we would say it's between six to nine months upon the appointment of the auditor," she said, with regards to the estimated timeline to resolve the matter with CBP. 

In a separate filing with Bursa Malaysia today, FGV said it is extending its initial timeline of August 2021 to September 2021 to finalise the appointment of the independent auditing firm.  

"It is imperative that FGV identifies and appoints an organisation that would be the best fit to conduct an audit that meets the expectations of the CBP and to ensure that the proposals also fulfil FGV’s requirements. FGV has requested the nine organisations to revise and resubmit their proposals.

"FGV has also recently appointed a US-based legal firm to provide support in this process and in FGV’s overall effort to address the WRO," it added. 

At the current juncture, Nurul Hasanah confirmed that the WRO is still in effect and is impacting FGV's indirect business through its stakeholders and customers in the US. However, she highlighted that FGV's direct exposure to the US market is "very small". 

On Sept 30 last year, the CBP announced a ban on palm oil imports from FGV following a year-long investigation into allegations that the plantation group used forced labour. The CBP said its investigation reasonably indicated signs of forced labour such as deception, physical and sexual violence, the retention of identity documents and intimidation, and that threats had been made.

The CBP also raised concerns that forced child labour was potentially used in FGV's production processes. The ban was effective immediately on the same day of the announcement.