Malaysian Government’s Palm Oil Minister Calls U.S. Government Action “Hasty”


The Malaysian Government’s Zuraida Kamaruddin, Minister of Plantation Industries and Commodities, called the action by the U.S. Customs and Border Protection (CBP) agency “hasty” following their decision against Sime Darby, last week.

Minister Kamaruddin noted that the Malaysian government will seek clarity from the U.S. CBP why they moved against Sime Darby while the company was in dialogue with the agency. The company is undertaking a comprehensive revision of labor and human rights policies and producing a third party social compliance audit which it was to submit to U.S. CBP in alignment with their procedures and protocols.

The Chairman of the Malaysian Palm Oil Council (MPOC), Larry Sng Wei Shein described the U.S. CBP process as “opaque and requires greater transparency.”

This view is established within the U.S. government, too. The United States’ own Government Accountability Office (GAO), which examines U.S. government processes and spending, recommended in a 2020 performance audit that “CBP should better communicate to stakeholders” involved in the WRO process.

Improved communication is important to ensure that the Malaysian palm oil sector can turn its clear commitments on labor rights into practical actions that also satisfy the requirements and processes of importing countries.

The Malaysian palm oil sector is committed to reform. The private sector recognizes that some labor problems exist, and is taking proactive, corrective steps to address areas of concern, including issues raised by U.S. government authorities. The launch of the Responsible Employment Charter is one such action.

MPOC representatives met with the U.S. CBP in Kuala Lumpur last week, alongside representatives of leading Malaysian companies, and agreed to consider adopting training and compliance support from U.S. authorities. The constructive in-person meeting could now lead to a new, more open and frank communication channel between the Malaysian palm oil sector and the U.S. government.

The palm oil sector is of huge significance for Malaysia’s economy, not least for the hundreds of thousands of small farmers who rely on the crop. The CBP’s Assistant Commissioner, Debbie Seguin, tweeted recently that “The Malaysian Palm Oil industry is important to the economic vitality of #Malaysia,” a recognition that any sanction against palm oil has the potential for significant harm. This recognition of palm oil’s value and importance is welcome.

It is important also to recognise that the existence of some acknowledged issues does not mean that every allegation is true, or that every proposed sanction is justified.

It is to be hoped that improved communication and mutual patience and cooperation between U.S. authorities and Malaysia, will now allow the sector to execute on its stated commitments to reform on labor issues, without further escalation.