Malaysian Palm Oil Council Lauds Sime Darby Plantation’s Sweeping Changes in Governance and Operations


Announcement will see current and former workers reimbursed for recruitment fees

Today, the Malaysian Palm Oil Council lauds the announcement by Sime Darby of sweeping changes to its labour practices, especially with respect to its recruitment of migrant workers and the voice of workers on the plantation. The following statement can be attributed to Chairman of the Malaysian Palm Oil Council (MPOC), YB Tuan Larry Sng Wei Shein:

We commend Sime Darby Plantation for taking this important step in improving the conditions for its workers. The commitment to reimburse recruitment fees of current and former foreign workers, and the adoption of a zero tolerance policy towards rogue recruitment agencies is a clear signal that the Malaysian palm oil sector is serious about its global responsibilities.

As I have said before: forced labour has no place in the Malaysian palm oil supply chain. The Malaysian Palm Oil Council is committed to improving conditions for all our workers and to eradicating any such labour rights violations.

MPOC remains steadfast in continuing a constructive dialogue with the U.S. CBP and other U.S. government bodies. We reiterate our call for greater transparency in this process, and for our trading partners in Washington to take into account these significant developments taking place inside Malaysia.”

The Facts: Sime Darby’s Announcement

The reforms announced by Sime Darby Plantation include:

  • Foreign workers to be immediately reimbursed for costs they had incurred to secure employment with SDP: payments totalling up to $20 million
  • Revised Responsible Recruitment Procedure (RRP), including open tenders for recruitment agents, and enhanced training and compliance processes
  • Agents in breach of SDP’s zero recruitment fee policy will be prevented from working with SDP again
  • New ‘Social Dialogue’ between workers and management, cooperating alongside the National Union of Plantation Workers (NUPW) to ensure site-specific grievances are raised and resolved at the earliest possible stage
  • A new Social Welfare & Services (SWS) department, and 40 fulltime Site Safety & Sustainability Officers (SSSO), to ensure that upstream operations comply with internationally-recognised best practices

The announcement by Sime Darby Plantation complements broader reform efforts announced by Malaysian palm oil industry bodies.

Commitment from Malaysian Palm Oil Private Sector

The Malaysian palm oil sector has in recent months instituted a series of commitments and action plans implemented by private growers and palm oil companies across Malaysia. These actions send a clear message to customers, governments and stakeholders around the world that the private sector of the Malaysian palm oil industry understands the concerns around labour rights, and is committed to rectifying problems that do exist.

In December 2021, a Responsible Employment Charter, was released that commits all members of the MPOA, a private sector trade association, to:

  • Prohibition on recruitment fees charged to jobseekers
  • No retention of workers’ passports or similar restrictions on freedom of movement
  • Actively supporting workers joining trade unions and other worker organisations
  • Publicly-available Corrective Action Plans (CAPs) as a means to address any future labour violations

This progress has been accompanied by a constructive and respectful dialogue with the U.S. Customs and Border Protection (CBP) and other U.S. government bodies, with outreach led by the Chairman of MPOC, YB Tuan Larry Sng Wei Shein.

YB Tuan Larry Sng Wei Shein continued, “The actions of Sime Darby, along with those taken by the broader industry, demonstrate real and concrete reforms. Importantly, these changes are aligned with many of the recommendations set out by, among others, the International Labor Organisation, the U.S. State Department’s Trafficking in Persons (TIP) Report, the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor, as well as by the U.S. CBP. MPOC looks forward to the U.S. authorities recognising the value and impact of these reforms, and adjusting its assessment of the Malaysian palm oil sector accordingly.”