The Facts about Malaysia’s Palm Oil Sector and Labour Rights
KUALA LUMPUR – U.S. President Barack Obama arrives in Malaysia today, for his second visit in recent years. Once again, we welcome him to this great nation.
The visit of the U.S. President is focused on promoting Malaysia’s participation in the Trans-Pacific Partnership Agreement (TPPA). The TPPA is the crown jewel in the President’s ‘Asian Pivot’. It is a broad, multilateral trade agreement comprising 12 nations including the United States and Malaysia, and will most likely result in higher levels of exports of products such as vegetable oil-derived products, electronics and garments from these countries to the US. This is a worthy and important trade agreement that will help generate economic benefits for Malaysia.
One of the economic sectors that will benefit from this expanded relationship is the Palm Oil sector. The Palm Oil sector represents billions of dollars annually to the Malaysian economy. More importantly, over 1 million small holders and their families have a direct stake in the beneficial success of this industry.
Unfortunately though, in recent years, environmental and domestic interests in the U.S. have created a climate of misinformation about Malaysian Palm Oil. Groups such as Rainforest Action Network (RAN), a radical left-wing activist group, which holds certain political sway with key Democrat donors and has relations with the White House, have stirred up scurrilous allegations against our industry, from the environment to health and now labour rights.
This culminated when, in April 2014, President Obama, while on his first visit to Malaysia, claimed that as a result of the Palm Oil industry, “huge portions of tropical forests…they’re just being shredded because of primarily the palm oil industry.”
These comments were not only inaccurate and offensive, but represented the kind of statements more commonly associated with partisan environmental activists, rather than a visiting Head of State. It’s as if WWF had written the President’s remarks.
Now, things have gotten even more ludicrous with the palm oil sector being subject to claims by the US Government that the industry is engaged in systematic violation of labour rights and human trafficking.
These allegations are materially inaccurate and unjustified. Malaysia has strong laws against forced labour, child labour, illegal immigration and associated activities. The palm oil industry, like all in Malaysia, is required to abide by these laws – including the paying of the statutory minimum wage.
To claim that systematic forced labour or child labour takes place in Malaysia is simply false, as has been demonstrated in studies by both the Malaysian Government, and by independent researchers.
The data behind the U.S. allegations does not stand up to any scrutiny. The Obama Administration’s claims rely on NGO reports published by groups such as Humanity United. The Humanity United report has significant problems with the claims that it makes. In a series of three claims about the industry’s treatment of workers on plantations, no sources or proofs are given; The report at various points conflates Indonesia and Malaysia, specifically in relation to the arrangements between plantation companies and smallholders; Some of the source evidence on child labour used is more than 30 years old, meaning that it is significantly out of date not just in terms of quantified data, but also qualified data; and some of the numerical estimates cited by advocacy groups appear to greatly overstate published academic estimates in relation to stateless children.
The most recent claims by RAN around trafficked labour were independently investigated by the RSPO. They found no evidence of trafficked labour.
The fact is that migrant labourers are attracted to Malaysia – and to the palm oil sector – through the economic opportunities offered. A large number of those migrant workers find work on plantations. This is no different to migrant workers from Latin America who find work in the U.S. agriculture sector, notably in California.
No industry, and no country, is perfect. There will always be isolated bad apples, and cases of abuse, which must be dealt with. However, this reality is ignored by the US Government.
The truth is that the Malaysian palm oil industry has created, and continues to support, millions of jobs and livelihoods across Malaysia. Hundreds of thousands of families and communities have been lifted from poverty thanks to their participation in the palm oil sector, leading to a better, more prosperous future.
The truth is that the ‘Malaysian Model’ of oil palm cultivation is admired around the world, and is a blueprint for many developing nations looking to build their own well-regulated sustainable palm oil industries. These truths deserve to be heard and understood in America, rather than the inaccurate allegations we see at present.
The U.S. President will spend his time in Malaysia asking for support for the TPPA agreement, and I am sure he will express U.S. friendship with Malaysia. However, at the same time his Adminsitration has made baseless and hurtful allegations against the Malaysian businesses, workers, and small farmers that have helped make Southeast Asia and the Pacific the engine of trade and economic growth.
Support and friendship must be a two-way street. If President Obama wants the TPPA and Asian engagement to be his foreign policy legacy, he would do well to understand Asia before lecturing it.
By Tan Sri Datuk Dr Yusof Basiron, CEO