The Malaysian palm giant IOI Group faces labor abuse allegations in a new report recently published by the Finnish human rights group Finnwatch.
IOI Group is one of Malaysia’s biggest conglomerates that supply palm oil fatty acid distillate and Nestlé palm oil. According to Finnwatch’s report which is based on interviews with Indian migrant workers at IOI Group’s Mekassar farm in Malaysia, the workers are being mistreated.
Finnwatch states that workers have paid large recruitment fees, lived in deplorable conditions, and been mistreated by managers. Employees have also been promised eight-hour workdays and monthly salaries, but they have had to work long hours on a pay-per-performance basis.
Sonja Finér, CEO of Finnwatch explains, “No records are kept of how many hours employees have worked, and the employer is allowed to refuse to pay the minimum wage if the employee does not meet the targets set by the employer. The problems also continue after work as some of the employees have been accommodated in poor housing conditions, where they have had to sleep without a bed and a decent mattress.”
According to Finnwatch, some problems had been rectified after they were raised, but the complaints highlighted “gaps in the IOI Group’s wider recruitment and wage policies, and commitment to respect for human rights”.
Finnwatch has been monitoring the working conditions of the Malaysian palm oil company IOI Group since 2014. Over the years, the company has promised to correct many problems but the new report indicates that the guidelines have not been fully implemented. The IOI also does not appear to have effective processes for identifying grievances or handling direct complaints.
“The company has difficulties in internalizing human rights-based responsibility work and does not know or want to look at the functioning of its processes and practices from the perspective of vulnerable migrant workers,” Sonja Finér says.
Finnwatch also calls for the duty of legislators to take responsibility and the human rights group expects an ambitious proposal from the European Commission on corporate responsibility in the fall. The law should also allow for civil actions for victims of human rights violations, Finnwatch states.