[UPDATED] Ferrero stops buying palm oil from SDP over alleged forced labour concerns

KUALA LUMPUR – Italian confectionery giant Ferrero has told its global suppliers to stop sourcing palm oil and palm kernel oil from Sime Darby Plantation (SDP), reported Reuters.

According to the news report today, the Italian company said the decision was made after the United States alleged the Malaysian giant had used forced labour.

“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 will comply with the US Customs and Border Protection’s decision,” Ferrero told Reuters by email.

Ferrero uses the oil in its Ferrero Rocher chocolates and Nutella spread, but said it only uses certified sustainable palm oil – sourcing 85% from Malaysia.

This follows similar decisions by Hershey Co and General Mills Inc.

While Ferrero reportedly sources 0.25% of its palm oil from SDP, this is seen as a reputational blow for the palm oil giant as the US continues to investigate allegations of labour abuse in Malaysian companies.

Ferrero buys palm oil from global suppliers and not directly from SDP.

Sime Darby said, “it has taken steps in the area of human rights and that all its stakeholders who are committed to sustainability can be assured of its commitment and leadership in the industry”.

Earlier this year, Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin discredited the import ban imposed by the US Customs and Border Protection Department (CBP) on SDP.

Calling the move “rash and unfounded”, she sought to substantiate her stand by pointing out that SDP is in the midst of handing over a comprehensive report to the US.

In February, Incorporated Society of Planters chairman Datuk Daud Amatzin expressed his support for the minister’s stand, saying Zuraida was simply carrying out her duty as a minister in defending the nation’s dignity.

“As the plantation industries and commodities minister, she (Zuraida) is duty-bound. As an independent sovereign nation, Malaysia cannot be bullied by the US via its authorities or agents.”

Daud, who is also International Institute of Plantation Management deputy president, added fuel to fire by alleging that the US’ targeting of government-linked companies is a “strategic attempt to attack Malaysia’s reputation and goodwill”.

On December 16, 2020, the CBP issued a Withhold Release Order to detain SDP’s palm oil and palm oil products at US ports of entry.

The reason behind the detention is that the CBP determined the palm oil and palm oil products were produced using convicts, forced or indentured labour. – The Vibes, April 15, 2022