Enforcement of U.S. prohibition of forced labor palm oil imports examined

On December 15, 2020, 25 members of the oldest committee of the U.S. Congress – the House Ways and Means Committee – sent a letter to U.S. Customs and Border Protection to seek more information on the administration’s enforcement of the prohibition of forced labor palm oil imports. The Ways and Means Committee has jurisdiction over taxation and tariffs, including Section 307 of the Tariff Act of 1930 (19 U.S.C. § 1307), which prohibits the importation of merchandise mined, produced or manufactured, wholly or in part, in any foreign country by forced or indentured labor – including forced child labor.

The Ways and Means letter — notably signed by the Chair and a majority of committee members — focuses on enforcement of the Withhold Release Order issued against FGV, a Malaysian palm oil company, on September 30, 2020, which blocks US imports of FGV palm oil shipments over forced labor concerns. The Withhold Release Order sanctioning FGV came after our partners, Global Labor Justice-International Labor Rights Forum (GLJ-ILRF), Rainforest Action Network, and SumofUs petitioned US Customs and Border Protection and Freedom United campaigned for the block to be issued.

While the lawmakers applauded the WRO against FGV palm oil, in a press release they noted:

After receiving insufficient answers to prior questions on enforcement strategies for other withhold release orders (WROs), the lawmakers pressed Acting CBP Commissioner Mark Morgan to give U.S. consumers confidence that they are not buying goods that are produced in illegal and abhorrent working conditions.

“The kinds of products impacted by these abhorrent labor practices are broad,” the Ways and Means Democrats emphasized.“Estimates suggest that palm oil is used in about half of items one would find in a typical grocery store, including an expansive number of everyday products. Thus, an incredibly expansive range of U.S. supply chains are likely tainted by the labor practices used to produce palm oil.”

“In our view, these odious labor practices and their pervasive impact across supply chains highlight the need for an aggressive and effective enforcement strategy,” added the lawmakers.

The full press release can be viewed here and the text of the letter follows below.

Dear Acting Commissioner Morgan,

We write to express our ongoing interest in U.S. Customs and Border Protection’s (CBP) enforcement of the prohibition on imports of goods made by or with forced labor. In particular, we are interested in CBP’s enforcement strategy to ensure that imports of palm oil made with forced and child labor do not enter the United States.

There has been widespread reporting dating back many years regarding the use of forced labor in the production of palm oil across the world. An investigation by the Associated Press (AP) has highlighted the abusive and slave-like labor conditions used to produce palm oil across Malaysia and Indonesia. Most recently, the AP documented the particular impact on women working in palm oil fields, exposing rampant and repulsive allegations of rape and gender-based violence across palm oil plantations. The Department of Labor itself has also identified the use of forced and child labor in the production of palm oil in Malaysia, Indonesia, and Sierra Leone.

The kinds of products impacted by these abhorrent labor practices are broad. Estimates suggest that palm oil is used in about half of items one would find in a typical grocery store, including an expansive number of everyday products. Thus, an incredibly expansive range of U.S. supply chains are likely tainted by the labor practices used to produce palm oil.

In our view, these odious labor practices and their pervasive impact across supply chains highlight the need for an aggressive and effective enforcement strategy. We were pleased to see CBP take a step forward by issuing a withhold release order (WRO) on one of the worst actors in the palm oil sector, FGV Holdings Berhad (FGV). Allegations of the use of forced labor by FGV date back to at least 2015 and continue to be documented. The issuance of this WRO is certainly a move in the right direction.

However, issuing a single WRO will clearly not address the ubiquitous forced labor problems in the palm oil sector described above. With that in mind, we are interested in learning more about CBP’s palm oil enforcement strategy, both with regard to the WRO on FGV and more generally across regions. We respectfully request responses to the following by no later than December 29, 2020:

1) Please describe CBP’s enforcement plan regarding the existing WRO on FGV.

a. Has CBP detained any shipments to date?

b. Have U.S. importers of FGV palm oil chosen to re-export detained shipments to other countries? If so, where have these shipments been sent?

c. How is CBP working to target high-risk shipments?

d. What is CBP’s enforcement plan for downstream products that include palm oil produced by FGV? Can CBP leverage traceability technology in this sector to better identify high-risk goods and shipments.

2) Please describe how CBP is approaching potential remediation plans regarding FGV. It has developed an “Action Plan” that aims to address issues related to forced labor and press reports have noted that some evidence has been presented to CBP. However, stakeholders have noted deep skepticism regarding whether FGV’s efforts, including the recent Action Plan, will effectively address these issues.

a. Accordingly, please outline all aspects of CBP’s process for reviewing information regarding remediation, including consulting with the petitioners, to ensure that forced labor has been removed from a supply chain before removing a WRO.

3) Please describe CBP’s enforcement strategy beyond forced labor products made by FGV. As noted above, forced labor problems in palm oil are present well beyond FGV facilities and appear to be prevalent across at least Malaysia and Indonesia.

a. Has CBP identified other companies using forced labor to produce palm oil in these countries or elsewhere?

b. Has CBP considered issuing a regional- or country-wide WRO regarding palm oil in either Malaysia or Indonesia?

In our view, the palm oil sector highlights particularly well the need for strengthened and focused forced labor enforcement. Many of our outstanding questions attempt to understand what it means to implement a holistic and effective enforcement strategy. To date, CBP’s answers to these questions have been insufficient. It is critically important that CBP address the issues raised in these questions to fulfill the statutory mandate that prohibits forced labor imports. A robust enforcement strategy would give confidence to U.S. consumers that products on store shelves are not produced in illegal, and often abhorrent, working conditions.

Thank you for your attention to this critical matter.

Sincerely,