Palm Oil Giant, IOI, Announces Major Labor Reforms

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Debt BondageForced LaborHuman TraffickingLaw & PolicySupply Chain

Palm oil company, IOI Corp Bhd, has announced major labor reforms — a move lauded by NGOs including Rainforest Action Network (RAN), Finnwatch, and Tenaganita as setting a new standard in the industry.

The Edge Markets reports that “IOI Corp has expressed its commitment not to charge recruitment-related fees to foreign workers, to provide a living wage determined through credible methodology, and to provide trade unions with free access to its estates.”

“Under its new wage policy, IOI Corp has committed to paying a monthly minimum wage, topped with productivity-linked incentives to its workers. On recruitment-related fees, IOI Corp has indicated that any fees found to be charged will be reimbursed to workers, the statement read. This policy is to be enforced with systematic after-arrival interviews.”

These new policies were seen as a welcome move by labor rights activists who hope that other palm oil companies will follow suit. The Malaysian palm oil industry has for years been scrutinized for its use of forced labor and practices that exploit migrant workers through debt bondage and high recruitment fees.

Glorene Das from Malaysian NGO Tenaganita explained, “Often, workers are charged large recruitment fees by third-party labour brokers to secure their jobs on the plantations, and must work off the debt leaving them in a situation of bonded labour. This indebtedness and limitations on their freedom of movement amount to conditions of modern day slavery.”

Finnwatch executive director Sonja Vartiala cautioned that while this is an important policy change, the real test will be in implementation. “Consumer brand companies and buyers committing to ending forced labour in their supply chains must monitor IOI’s progress and require full implementation of these policies,” she said.

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