KUALA LUMPUR:While the export of Malaysian palm oil to the United States (US) is of an insignificant amount, the effect from the US’ move to ban FGV Holdings Bhd’s palm oil and palm oil products on the industry’s reputation is of concern to the country.

Malaysian Palm Oil Association (MPOA) chief executive officer Datuk Mohd Nageeb Abdul Wahab said the ban had affected some of the local companies, especially FGV.

“What we are more concerned about is the damage to the country’s and the company’s reputation.

“We view America and North America as a big potential market for expansion, that is why we are concerned about with what is happening today,” he said on TV3’s Money Matters talk show yesterday.

Last month, the US Customs and Border Protection (CBP) issued a Withhold Release Order against palm oil and palm oil products made by FGV and its subsidiaries and joint ventures, effective September 30, 2020, at all US ports of entry.

The CBP’s Office of Trade directed the issuance of the order based on information that it had received which had allegedly raised concerns about allegations that the company had used forced labour in its production process.

Subsequently, the FGV issued a statement to express its disappointment with the decision, saying that the company is fully committed to respecting human rights and to upholding labour standards, in line with the Sustainable Development Goals (SDGs) and to the United Nations Guiding Principles on Business and Human Rights.

Mohd Nageeb said the source of the allegations were some non-governmental organisations which had a negative perception about the industry.

“They have not provided the evidence. But we are engaging with them and we are trying to engage with the CBP and I think the affected party is in talks with them too.

“We are also engaging with the US embassy to find out what is the best form of engagement and how we can resolve this matter as soon as possible,” he said.

During the half-an-hour talk show, the plantation veteran said the MPOA is also meeting and discussing the issue with the Foreign Ministry and the Plantation Industries and Commodities Ministry.

He added that a couple of months ago, the rubber industry/ glove maker company, Top Glove was also affected by a similar ban, but the situation has been resolved.

MPOA has a total of 122 members, including FGV, which represents 40 per cent or 1.85 million hectares of the Malaysian palm oil industry.

The industry produced about 20 million tonnes of palm oil annually -- which accounts for 28 per cent of the world’s supply of palm oil -- and has consistently contributed about five per cent to the country’s gross domestic product.

The industry is also the second biggest employer after the government, employing about 750,000 people.

In 2019, its revenue stood at RM65 billion.

The US was Malaysia’s eighth biggest palm oil export destination last year with exports at 542,161 tonnes (Jan-Dec 2019).

-- BERNAMA