UPDATE 1-Malaysian palm giant IOI faces work abuse allegations in new report

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(Add details on initiation of investigation, paragraph 7)

KUALA LUMPUR, June 29 (Reuters) – Workers at Malaysian palm oil company IOI Corp are abused by executives, face poor living conditions and pay high recruitment fees, according to a report released on Wednesday by the human rights group Finnwatch.

IOI said it would comment on the report after its public release and directed Reuters to a grievance tracker on its website where it addressed the specific complaints raised by Finnwatch.

The IOI faces the charges days after saying it would assist with any investigation after US Customs and Border Protection (CBP) said in a letter to an activist it was investigating the company over allegations of forced labor.

Similar US investigations have led in the past to banning some Malaysian companies, including two palm oil producers, from selling their products in the United States.

Helsinki-based Finnwatch said it discovered that Indian IOI employees paid up to 45,000 rupees ($ 606.31) in recruitment fees, lived in poor housing conditions and had not received a copy of their employment contracts. He also criticized his salary policy.

The case also highlighted serious and persistent gaps in the IOI Group’s broader recruitment and compensation policies, as well as in its commitment to respect human rights, Finnwatch said in the report.

The findings follow a survey conducted by Finnwatch in an IOI field in Pahang State, on the east coast of Malaysia. He opened an investigation in August 2020 after receiving complaints from a relative of an IOI worker.

Finnwatch shared the investigation report with Reuters ahead of its publication on Wednesday. He also shared the findings and the full report with IOI, and has engaged with IOI since last August.

In the follow-up to the grievances on its website, the IOI said it had suspended the recruitment of workers at recruitment agencies in India after Finnwatch said workers were forced to pay high fees to get a job. . The IOI said the fees paid by its workers were illegally collected by unknown actors, could not be verified and were beyond the competence of the company.

US CBP REVIEW

Malaysia, the world’s second largest producer of palm oil, relies on migrants to produce the edible oil found in products ranging from food to fuel.

The US CBP last year banned three Malaysian companies, including palm oil producers FGV Holdings and Sime Darby Plantations, for allegedly practicing forced labor, including abusive working and living conditions.

The two companies have appointed auditors to assess their working practices and said they will engage with the agency to address concerns raised.

Following Finnwatchs’ investigation, IOI said on its website that it demoted an employee for mistreating a worker and issued guidelines on providing basic equipment and checking working hours.

IOI told Finnwatch that some workers are paid less because they fail to meet set work targets, according to the company’s response which is also published in the report.

Finnwatch discovered that IOI had a complex piece-wage policy which it said has led to abuse, errors and some being paid below minimum wage.

In its response to Finnwatch, the IOI said the workers had decent housing, but conditions deteriorated due to the lack of cleanliness of the workers.

The IOI also said it has ordered all estates to give workers a copy of their employment contracts. ($ 1 = 74.2200 Indian rupees) (Report by Mei Mei Chu, edited by Timothy Heritage)

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