An investigation by the Associated Press revealed that human rights abuses, including slavery and rape, as well as child labour are prevalent in Malaysia’s palm oil industry. The investigation documents widespread labour abuses, including forced labour, debt bondage, child labour and sexual harassment. Workers live in poor conditions and work long hours for minimal pay. Human rights violations also include physical violence and lack of medical care. In the face of such abuses, workers are unable to escape their situation of exploitation since they are hired on a day-to-day basis by subcontractors, and their passports are confiscated. In addition, women face sexual harassment and rape, with some cases involving minors. The Associated Press documents the case of a 16-year-old girl who was raped by her boss and threatened with an axe. Women perform the most difficult jobs, working in hazardous conditions and carrying heavy loads. This can cause long-term health issues, including collapsed wombs and miscarriages, that are left untreated. Major Western banks, financial institutions and brands have been linked to these abusive supply chains.
Keywords: South East Asia & Pacific, Malaysia, palm oil, primary production, human rights violations, labour rights violations
Sources: https://www.aljazeera.com/news/2020/11/18/rape-abuses-in-palm-oil-fields-linked-to-top-cosmetic-brands-ap
https://globalnews.ca/news/7355279/palm-oil-forced-labour-top-brands-banks/
According to The Star, approximately 16,000 tonnes of rare earth oxide were extracted illegally from five Malaysian states, Sik in Kedah, Lipis in Pahang, Pengkalan Hulu and Kuala Kangsar in Perak, and privately owned lands in Meranti and Jelebu in Negri Sembilan. These activities were conducted in forest reserves and private properties without proper authorisation. In comparison, 7,000 tonnes of rare earth carbonate, yielding 3,000 tonnes of rare earth oxide, was mined legally from a pilot project in Kenering, Perak. In terms of exports, the report found that Malaysia exported a total of 19,081 tonnes of rare earth oxide, valued at RM 975 million. With only 3,000 tonnes coming from the legal project in Kenering, the remaining 16,000 tonnes were identified as originating from illegal mining operations. In response, Nik Nazmi Nik Ahmad, the Minister of Natural Resources and Environmental Sustainability, acknowledged the illegal mining issue and emphasised the need for a strategic plan to develop the rare earth industry in Malaysia.
Keywords: South East Asia & Pacific, Malaysia, minerals, primary production, illegal mining
Sources: https://www.thestar.com.my/news/nation/2024/03/13/16000-tonnes-of-rare-earth-mined-illegally
According to the Star, the government of the Malaysian state of Sabah is pursuing taxes owed by companies involved in the evasion of the crude palm oil sales tax. In collaboration with the Malaysian Anti-Corruption Commission (MACC), the government has introduced a voluntary scheme allowing companies to pay their taxes by the end of 2023 without penalty. One notable case of tax evasion involved a former public servant arrested in May 2022 for allegedly evading millions of ringgit in crude palm oil sales tax. The suspect was detained following the arrests of two state government officials. These officials were implicated in receiving RM700,000 (approximately US$154,000) in bribes from a palm oil mill in Lahad Datu. The bribes were reportedly given to overlook the falsification of crude palm oil production quantities, resulting in an estimated tax evasion of RM2 million (approximately US$440,000) per month since 2015.
Keywords: South East Asia & Pacific, Malaysia, palm oil, primary production, tax evasion, fraudulent documentation, forgery, corruption and bribery
Sources: https://www.thestar.com.my/news/nation/2023/08/18/sabah-working-with-macc-to-claim-sums-owed-in-tax-evasion-cases
According to a 2024 article by Euractiv, there are significant issues raised by the amount of used cooking oil (UCO) imported by the UK and Ireland from Malaysia. Under EU rules, biofuels made from waste materials, including UCO, can be double counted towards renewable energy targets, which has incentivised producers to label palm oil (which is cheaper) as UCO and to charge more for it. Ireland, in particular, is heavily reliant on biofuels to decarbonise its transport system. The discrepancies between collected and imported UCO has raised concerns of biofuel fraud. Indeed, Malaysia has reported collecting 48-71 kilotonnes of UCO annually, while British and Irish authorities show 151 million litres of UCO imported from Malaysia in 2020. This troubling discrepancy suggests that substances such as palm oil, which are restricted in the EU, might be fraudulently labelled as UCO. Observing such gaps between export and import data, the International Council for Clean Transportation (ICCT) and Farm Europe have indicated potential fraud. To combat this issue, the European Biodiesel Board (EBB) has indicated support for the creation of a biofuels database to improve traceability. Meanwhile, the Irish government has set up a working group to address biofuel sustainability and potential fraud.
Keywords: South East Asia & Pacific, Malaysia, palm oil, primary production, tax evasion, fraudulent documentation, forgery
Sources: https://www.euractiv.com/section/fuels/news/discrepancy-in-british-and-irish-used-cooking-oil-imports-raises-biofuel-fraud-concerns/
https://www.euractiv.com/section/agriculture-food/news/to-tackle-biofuel-fraud-ireland-takes-matters-into-its-own-hands/
A report by The Vibes explains how Seputeh MP Teresa Kok raised concerns about alleged improprieties in the proposed sale and lease of land owned by the Malaysian Rubber Board (MRB). Kok, the predecessor of the current Plantation Industries and Commodities Minister Datuk Khairuddin Aman Razali, criticised the lifting of a moratorium on the sale and development of MRB real estate, which she had imposed. The alleged lifting of this moratorium by Datuk Khairuddin Aman Razali, without proper justification, raises questions about the legality and motivation behind this action. Indeed, the sale and lease of these lands appears suspicious, since both transactions value the land below market value. This substantial undervaluation could be seen as potentially causing financial loss to the state for private gain, by selling public assets at undervalued prices. This also raises concerns about the potential for corruption. The involvement of a foundation related to PAS, the Islamic political party in Malaysia, and the below-market rates suggest possible favouritism or cronyism, where decisions may be being made to benefit certain individuals. In addition, the transactions allegedly bypassed required approvals and proper procedures. The absence of such approvals and the subsequent denials by MRB point to a lack of transparency and accountability.
Keywords: South East Asia & Pacific, Malaysia, timber, procurement of permits, corruption and bribery
Sources: https://www.thevibes.com/articles/news/29013/khairuddin-must-explain-sale-of-rubber-board-land-below-market-price-kok