Malaysia's Sime Darby Plantation to compensate migrant workers over fees

[KUALA LUMPUR] Malaysia's Sime Darby Plantation will set aside a total of RM82.02 million (S$26.4 million) to compensate current and former migrant workers who paid recruitment fees to secure jobs, the company said, amid concerns over its labour practices.

The US Customs and Border Protection (CBP) has since 2020 barred Malaysian products supplied by the palm oil planter over allegations about labour practises.

Last month, CBP said it had sufficient information to determine that the firm uses "forced labour" and that goods are subject to seizure.

In a statement, Sime Darby Plantation's Group managing director Mohamad Helmy Othman Basha said: "We have spent a long hard year auditing, examining, and occasionally, unearthing entrenched practises that needed to be improved or changed." "Every gap we have found has been or is being closed, every lapse in governance is being or has been addressed, any improvement needed has been or is being made," he said.

The world's biggest palm oil planter by land size said it will reimburse 15,078 current migrant workers a total of RM38.55 million and set aside a fund of RM43.47 million to reimburse 19,565 former workers.

Migrant workers are often charged a fee to appoint employment agents in their home countries to land jobs in Malaysia.

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

Activists say such payments may result in debt bondage as worker pay off the debt.

Debt bondage has been identified by the International Labour Organization as an indicator of forced labour.

Sime Darby Plantation said the fees paid by its workers were unreported payments charged by third-party agents in other countries and contravened its own zero recruitment fee policies.

To ensure ethical recruitment, the company said it is implementing new policies to recruit recruitment agents via open tenders "with appropriate checks and balances to ensure workers are no longer exploited or encumbered with recruitment fees".

The company said it was also implementing a new Environmental, Social and Governance scorecard, new channels for dialogue with workers and had established a social welfare department to oversee policies related to workers' well-being and safety. REUTERS