FGV freezes recruitment due to RSPO findings

The freeze will only be lifted when FGV is satisfied that contractors are adhering to all its internal policies, SOPs


FGV Holdings Bhd has frozen all new recruitment of workers from external contractors across its operations with immediate effect, following complaints of labour policy breaches raised by the Roundtable on Sustainable Palm Oil (RSPO).

The plantation giant said the freeze will only be lifted when the company is satisfied that contractors are strictly adhering to all its internal policies and standard operating procedures (SOPs).

The group also said it will negotiate with relevant stakeholders to directly employ existing workers contracted via third parties that may be displaced, and that all negotiations will involve employers and the government.

“We must and will treat all our employees fairly and equally, regardless of nationality,” said FGV chairman and interim CEO Datuk Wira Azhar Abdul Hamid (picture) said in a statement last Friday.

Azhar added that the state-owned planter is reviewing workers’ communication materials and training programmes related to terms of employment, whistleblower protection, and health and safety procedures.

“FGV commits to strictly adhering to its own and national policies on parity of employment terms for workers, including remuneration and benefits in kind, regardless of country of origin,” he said.

Last week, a local news portal reported that FGV had received a letter from the RSPO over alleged forced and other unethical labour practices, which it said contravened Malaysian and international labour laws.

Investigations by the palm oil certification body, which included independent verification visits from April 26 to 28 this year, on several FGV estates and mills found that the company had engaged in forced labour, as well as acts “done in furtherance of trafficking in persons”.

The probe stemmed from a complaint filed by the Wall Street Journal in 2015 with the body in pursuant to an investigative report it published that same year on alleged abuses at Malaysian oil palm estates.

The RSPO further stated that FGV must urgently undertake a legal and operational audit review of its current recruitment practices to eliminate elements of forced labour in compliance with local and international laws.

As a result of the findings, the RSPO secretariat had instructed for the suspension of a certificate for one of FGV’s palm oil factories in Negri Sembilan and its supply bases.

The suspension is to be lifted on the condition that FGV complies with the RSPO directives, which include a legal and audit review, as well as submission and subsequent implementation of an action plan.

FGV shares continued to slide last Friday, wiping out another RM109 million from its market capitalisation. Shares fell nearly three sen, or 2.75%, to 88 sen, with 136.08 million shares done.

The stock, which is majority-owned by the Federal Land Development Authority, is still in a downtrend since end of August. It traded at about RM1.74 then before heading south.