KUALA LUMPUR (June 29): Workers at palm oil company IOI Corp Bhd are mistreated by managers, face poor living conditions, and pay high recruitment fees, according to a report to be published on Wednesday by human rights group Finnwatch.
IOI Corp 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.
IOI Corp faces the accusations days after saying it will assist in any investigation after the US Customs and Border Protection (CBP) said in a letter to an activist that it was investigating the firm over forced labour allegations.
Similar US investigations have in the past led to some Malaysian companies, including two palm oil producers, being banned from selling their products in the United States.
Helsinki-based Finnwatch has been tracking working conditions at IOI Corp since 2014.
It said it found IOI Corp estate workers from India paid up to 45,000 rupees (US$606.31) in recruitment fees, lived in poor housing conditions, and were not given copies of their employment contracts. It also criticised its wage policy.
“The case also brought into light serious, persisting gaps in the IOI Group’s wider recruitment and wage policies, and commitment to respect for human rights,” Finnwatch said in the report.
The findings follow an investigation by Finnwatch at an IOI Corp estate in Pahang. It opened an investigation after receiving complaints from a relative of an IOI Corp worker.
Finnwatch shared the report on the investigation with Reuters ahead of its publication on Wednesday. It has also shared the findings and the full report with IOI Corp, and has engaged with IOI Corp since August 2020.
In the “grievance tracker” on its website, IOI said it had suspended recruitment of workers from recruitment agencies in India after Finnwatch said workers were forced to pay high fees to secure a job. IOI Corp said the fees paid by its workers were illegally collected by unknown actors, cannot be verified, and were beyond the firm’s jurisdiction.
US CBP scrutiny
Malaysia, the world’s second-largest palm oil producer, relies on migrants to produce the edible oil found in products from food to fuel.
The US CBP has banned three Malaysian companies in the last year, including palm oil producers FGV Holdings Bhd and Sime Darby Plantation Bhd, for allegedly practising forced labour including abusive working and living conditions.
Both companies have appointed auditors to evaluate their labour practices and said they would engage with the agency to address the concerns raised.
Following Finnwatch’s investigation, IOI Corp said on its website it had demoted an employee for mistreating a worker, and released guidelines on providing basic amenities and verifying work hours.
Finnwatch found that IOI Corp had a complex piece-rate wage policy that it said has led to abuse, errors, and some being paid below the minimum wage.
IOI Corp told Finnwatch that some workers are paid less as they do not reach the set work targets, according to the company’s response that is also published in the report.
In its response to Finnwatch, IOI Corp said workers were given decent housing, but conditions deteriorated “because of a lack of cleanliness by the workers”.
IOI Corp also said it has ordered all estates to give workers a copy of their employment contracts.
Read also:
IOI Corp notes forced labour claims against planter in US letter to activist
