Cargill Inc., one of the word’s biggest agricultural traders, stopped buying palm oil products from Sime Darby Plantation Bhd. after the U.S. said it found indicators of forced labor in the Malaysian grower.

Cargill has suspended all new sourcing of palm oil and derivative products from Sime Darby since Feb. 25, the world’s biggest oil palm planter by acreage said in an emailed response to questions. Sime did not give a reason for the halt but said that it is in talks with Cargill, who is a direct customer, on the move.

Some of Malaysia’s biggest palm and rubber-glove producers have been under scrutiny in recent years over allegations of migrant worker abuse. The U.S. Customs and Border Protection in late January said it would seize Sime’s palm oil and related goods as it has sufficient information to determine that the company’s products were made using convicts, forced or indentured labor.

Sime said it has taken measures to improve its labor rights in the past several months, and that the supply of bulk products to Cargill in India has been taken up by other customers. Cargill was not immediately available for comment.

Sime also addressed a report from Reuters that Italian confectionery giant Ferrero will stop sourcing palm oil from the company. Ferrero, General Mills and Hershey’s are not customers of Sime and haven’t been for a while, it said.

Source:
courtesy of BLOOMBERG

by Anuradha Raghu

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