MalayMail/Reuters-Apr 15
Italian confectionary giant Ferrero said it will stop sourcing palm oil from Sime Darby Plantation SIPL.KL after the US customs service found the Malaysian planter used forced labor, in a reputational blow for the palm producer and for Malaysia. Labor practices across the South-east Asian country have come under scrutiny in the past two years, with six companies including Sime Darby banned by US customs over forced labor allegations. Palm oil, the most widely used vegetable oil, is a key ingredient in Ferrero Rocher chocolates and Nutella spread, giving the iconic products their smooth texture and shelf life. “On 6th April, we have requested all our direct suppliers to stop supplying Ferrero with palm oil and palm kernel oil sourced indirectly from Sime Darby, until further notice,” Ferrero told Reuters by email. Palm oil is one of the world’s cheapest and fastest-growing vegetable oils, used in products from food to cosmetics to biodiesel. But the industry has faced scrutiny over the years for widespread deforestation in South-east Asia and exploitation of migrant workers. Migrant workers from countries like Indonesia, India and Bangladesh account for around 80 per cent of the palm oil labor force in Malaysia, the world’s biggest producer of the commodity after neighboring Indonesia. Although Ferrero buys relatively little of the edible oil from Sime Darby, its move — following similar halts by Hershey Co HSY.N and General Mills Inc GIS.N last year — is a further reputational blow for Sime Darby and for Malaysia, which faces mounting allegations of labor abuses of migrant workers in various industries. Read more at:
