Palm Oil

Where is palm oil produced with forced labor?

According to the U.S. Department of Labor (2010), palm oil is produced with forced labor in Malaysia and with child labor in Indonesia.

What does forced labor in palm oil production look like?

Forced labor in palm oil is generally a result of international trafficking in persons. Malaysia is a regional destination for international migrants and often labor brokers or employers are implicated in trafficking through such means as confiscation of passports or high brokerage fees. This is true across all sectors. Palm oil has particularly high potential for abuse due to the isolation of palm plantations.

The exact prevalence of forced labor in palm oil is unknown. This is due in part to the fact that while trafficking to Malaysia is known to be common, figures are not segregated by commodity. Additionally, the island of Borneo, a major production site for palm oil, is divided between three countries, including Malaysia and Indonesia, and irregular migration contributes to trafficking. Finally, palm oil production is increasing in Africa and Latin America, and forced labor has not been studied in this context. Other abuses, such as the confiscation of land, have been noted in Colombia.

Palm Oil Production and Supply Chain

Oil palm fruit is harvested on remote tropical plantations. After harvesting, the fruit is transported to processing plants, where palm oil is produced from the flesh and palm kernel oil is produced from the kernel of the fruit. “For every 10 tonnes of palm oil, about 1 tonne of palm kemel oil is also obtained” (Malaysian Palm Oil Export Board).

Oil may be further processed to produce derivatives of varying densities. The derivatives may also be blended with other vegetable oils (Greenpalm). Palm oil or its derivates is present in up to 50% of all products in grocery stores (WWF in Economist 2010).

Malaysia and Indonesia are the world’s largest producers of palm oil, together accounting for 85 percent of all production (Greenpalm). Currently, the US is the 6th largest importer of palm oil, following China, India, Europe, Pakistan and Malaysia (USDA). Growth in India and China contributes to increasing demand for oil- demand which the World Wildlife Fund reports may double by 2020.

Case Study

Trafficking in Persons in Malaysia

Malaysia is a regional destination for trafficking in persons for many sectors, ranging from IT manufacturing to palm plantations. Verité and groups such as Amnesty International (2010) have reported abuses by labor brokers, who charged high rates for visas, up to $1,000 in some cases, and confiscate passports. Workers then become subject to abusive work situations from which they cannot escape.

The U.S. Department of State reports that Malaysia hosts approximately 2 million documented migrants and an additional 1.9 million undocumented migrants. Both groups are vulnerable to trafficking. The most frequent countries of origin are “Indonesia, Nepal, India, Thailand, China, the Philippines, Burma, Cambodia, Bangladesh, Pakistan, and Vietnam” (USDOS 2010). Malaysia is on the Department of State’s Tier 2 Watch List.

How does forced labor in palm oil affect me?

A ubiquitous product, palm oil can be found in goods from food to cosmetics such as soap. Palm oil may be listed as “vegetable oil” on ingredient lists.

Environmental Consequences of Palm Oil Production

Palm oil production has heavy environmental consequences, notably through widespread deforestation, which leads to the destruction of habitats for endangered species such as orangutans (Greenpeace 2008) and contributes to climate change. “The creation of oil plantations in Malaysia is regarded as the main cause of the air pollution that has been affecting many neighboring countries in Southeast Asia” (WWF in O’Sullivan 2009).

Nor does palm oil have environmental benefits when used as a biofuel- Oxfam (2010) has stated that the deforestation resulting from the conversion of forest to farmland in Indonesia would require “420 years of biofuel production to pay back the carbon debt.”

What are governments, corporations, and others doing?

Due to increased campaigning highlighting the environmental impacts of palm oil, the last few years have seen increased engagement by corporations and governments. As a result of pressure from Greenpeace, in 2008, Unilever, made a commitment to complete sustainable sourcing by 2015 (Greenpeace 2008). Unilever has since been followed by Wal-Mart and General Mills in 2010. Social issues such as forced labor have not been at the foreground of these campaigns, though in one notable case The Body Shop dropped their major supplier of palm oil, Dabaan Organics, over allegations of illegal land confiscations in Colombia. Companies and other stakeholders have banded together to create the Roundtable on Sustainable Palm Oil, which has a certification system for sustainable palm oil.

Government actors have also become concerned about palm oil production. The World Bank is developing a palm oil strategy which "will outline a set of principles to guide the World Bank Group’s future engagement in the palm oil sector" (IFC). The Netherlands has pledged to move to sustainable palm oil sourcing from 2015 and the United Kingdom has announced a research initiative on palm oil with UK companies.

Where can I learn more?

Watch “The Price of Palm Oil” by Al Jazeera.
Learn about Verité’s efforts to end abuses by labor brokers.
Read a report by Amnesty International about trafficking in Malaysia.
Read a report by GreenPeace on the environmental effects of palm oil.