Faulty RSPO Audit Misses Forced Labor on Palm Oil Plantations

International coalition finds audit “troubling” and calls for improvements to the Roundtable on Sustainable Palm Oil system and for FELDA customers and financiers to independently investigate forced labor and human trafficking
Palm oil fruit harvest, Malaysia. Photo by Craig Morey

San Francisco, CA – In the wake of serious reports of modern day slavery, the Roundtable on Sustainable Palm Oil (RSPO)––the palm oil industry certification system––recently released an audit report assessing compliance for three estates of RSPO-member, and Malaysian palm oil giant, FELDA. The audit found several major issues with FELDA operations, which would put the palm oil grower in non-compliance with the RSPO standard, resulting in a “fundamental failure to achieve the objective of the relevant RSPO requirements.”

However, a number of methodological issues with the RSPO compliance audit itself are raising concerns among a coalition of international labor rights and environmental groups. Reviewing the RSPO audit report, the coalition found that the RSPO’s current systems are inadequate to address forced labor and human trafficking issues when they arise on RSPO member palm oil plantations.

The RSPO audit was commissioned after The Wall Street Journal released an article on July 26, 2015, titled “Palm-Oil Migrant Workers Tell of Labor Abuses on Malaysian Plantations,” exposing human trafficking, forced labor, and withholding of wages on major Malaysian palm oil grower FELDA’s plantations. Following the release of the article, a coalition of civil society groups issued a public statement calling on the RSPO, for an open investigation into the abuses. The RSPO responded by engaging Accreditation Services International (ASI) to perform a compliance audit during the week of September 14th on the FELDA units situated in the area highlighted in the article. The resulting audit report was published on October 21, 2015.

The international coalition has issued the following in response to both the audit process and its findings:

“Forced labor and human trafficking are very serious crimes, and investigations into these crimes require skilled labor assessors, a rigorous methodology, and the right evaluation criteria. The audit undertaken by the RSPO and indicators used to investigate The Wall Street Journal’s findings of human trafficking and forced labor on RSPO member FELDA’s palm oil plantations fall far short of what is required. Companies and investors associated with FELDA, such as Cargill, Wilmar, Procter & Gamble and Nestlé, must go beyond the RSPO labor audit, and independently and transparently investigate FELDA’s plantations using a skilled, external labor assessor and globally agreed criteria for forced labor and human trafficking.

“The compliance audit commissioned by the RSPO found major non-compliances with RSPO requirements at all FELDA estates visited and determined that RSPO certification bodies had not properly evaluated compliance. However, the conclusions of the report were weaker on forced labor and human trafficking, potentially highlighting the inadequacy of the RSPO Principles and Criteria (P&C) in screening such risks. Specifically, the RSPO P&C fails to require evaluation of workers’ recruitment process. It’s in the recruitment of new workers where deception, a critical element of forced labor and trafficking, normally occurs.

“Further, the conclusions of the report on forced labor and human trafficking seem to be out of step with the evidence contained in it. Troublingly, while the report states that ‘it found no evidence that forced or trafficked labor would be used in the FELDA estates included in the assessments,’ the audit report documents numerous findings that are internationally recognized as indicators of forced labor. According to the audit report, minimum wages were not paid, workers did not understand their terms of employment, workers’ contracts were in a language they did not understand, smallholders reported “constant debt,” and passports and identity documents were retained by the company––all of which are International Labor Organization (ILO) indicators for forced labor. Simultaneously, the auditors seemingly did not investigate two of the most critical indicators of forced labor highlighted in The Wall Street Journal article: the method of recruitment and legal work status of subcontracted workers.

“Beyond questions about the criteria used to evaluate forced labor and human trafficking, the methodology is also problematic. Firstly, the RSPO initiated its process with the announcement of the places it would be investigating a month in advance of the assessment, allowing FELDA undue opportunity to prepare the sites, including potentially intimidating, threatening, firing and deporting workers. When the audit did take place, the audit team only had five days in the field to assess three mills and their supply bases, which cover 69,498 hectares. Critical details on how worker interviews were carried out––including the demographics of workers interviewed, how confidentiality and non-retaliation were ensured, and what questions were asked––are also insufficiently detailed.

“Given the shortcomings of the RSPO audit, we call on international buyers and investors to independently and transparently investigate human rights and labor abuses in FELDA’s plantations using a skilled labor assessor. We also call on the RSPO to align its Principles & Criteria with ILO indicators and to align its audit processes with best practices in labor assessments as outlined in Free and Fair Labor in Palm Oil Production: Principles and Implementation Guidance.”