FGV to pick third parties to audit foreign worker recruitment firms

  • Plantations
  • Monday, 19 Aug 2019

FGV Holdings Bhd says each agency has been vetted through a stringent process and engaged under new contractual terms that include protection of the rights of foreign workers.

KUALA LUMPUR: FGV Holdings Bhd will appoint independent third parties in September to audit and verify each of the newly appointed foreign worker recruitment agencies.

FGV said on Monday the third parties would ensure these agencies fully complied with its requirements.

This was part of its comprehensive exercise that would involve independent audits on FGV’s entire labour recruitment processes and procedures, it said. This was expected to start in the next few weeks.

“The agreements with the independent third parties are being finalised and FGV will make the announcement at an appropriate time, ” FGV said.

In March 2019, it revised its foreign worker recruitment processes and appointed 13 new recruitment agencies for Indonesia and India. All these recruitment agencies are appointed through an open tender process.

“Each agency has been vetted through a stringent process and engaged under new contractual terms that include protection of the rights of foreign workers, ” it said.

FGV was responding to an Aug 15 petition submitted by a coalition of NGOs to the acting commissioner for the United States Customs and Border Protection.

It said there were several allegations made against FGV in the petition, citing a number of sources, including an article in the Wall Street Journal which was published on July 26, 2015.

“Regrettably, some of those allegations were indeed factually accurate at the time. Most have been corrected over the period commencing December 2018, with one major item that is expected to be completed by the end of this calendar year.

“This pertains to the legalisation of foreign workers in the state of Sabah, which has required engagement at government level and involves policy changes, ” it said.

FGV said it 68 mills in Malaysia and an oil palm planted hectarage of 339, 385 ha. Of this, 290, 829 ha is leased from the Federal Land Development Agency (Felda) and was developed as part of the national agricultural development programme more than 30 years ago.

A third of FGV’s current production of about three million tonnes is produced in these estates. FGV has full management control over these estates.

The remaining two million tonnes is produced by independent or organised smallholders and estates.

“A key element in addressing the issues that have been raised in the petition is the traceability of the fresh fruit bunches (FFB) supplied to FGV’s mills.

“At this time, FGV has 100% traceability to all our own estates and to all FFB produced by smallholders who are part of organised government schemes.

This accounts for about 70% of the oil produced by FGV. Of the additional 30% or about one million tonnes of oil produced from plantations owned by independent smallholders and estates, FGV is now able to trace 66% of its FFB quantity to Tier 1 suppliers (estates of origin and collection centres).

“Thus, 86% of the oil produced by FGV’s mills is now fully traceable to Tier 1 suppliers, ” it said.

As for the petition by the coalition of NGOs, FGV said it was quite understandable for the group to question FGV’s commitment to change its practices.

FGV also noted it had repeatedly failed to demonstrate improvements although the first article from the WSJ was published more than four years ago.

“Several things have changed in FGV since 2018. For instance, the board of directors is entirely different from the board that was in place in 2015. Today, the board today comprises subject matter experts and professionals.

“In November/December 2018 and in 2019, FGV has also made several changes in its senior management team. This new board and management team are committed to reform at all levels, especially in the areas of good governance and sustainability, ” it said.

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