A report published today by Finnwatch finds that Malaysia-based IOI Group, which has supplied palm oil to Finnish companies, has successfully improved its working conditions in some areas. However, migrant workers still pay enormous recruitment fees, some have been misled during recruitment and not all workers on the estates are even now paid the minimum wage.

"In order to gain employment, some workers have acquired debt in their home countries that totals to over a year's wages. The problem is exacerbated as many workers have been given misleading information about the job awaiting them in Malaysia," explains Finnwatch's Executive Director Sonja Vartiala.

Intervention in recruitment-related problems is the largest challenge faced by the Malaysian palm oil industry, and it needs to be tackled urgently.

"Misleading information on the workplace and enormous fees may lead to conditions akin to human trafficking and forced labour," Ms Vartiala reminds.

Finnwatch published its first report on the IOI Group's working conditions in 2014, when the corporation supplied palm oil to e.g. Neste and Paulig Group. The follow-up report observes that matters have improved in some areas.

"IOI has eliminated a clause from its employment contract that limited the rights of its workers to industrial action, has increased the wages paid to workers during their probationary period to the minimum wage and increased the training of its workers. The corporation also corrected some shortcomings while the report was being compiled," Ms Vartiala notes.

Finnwatch thanks IOI Group for acting in an open manner during the study.

Two Finnish palm oil purchasers have also undertaken measures although they no longer purchase palm oil from IOI Group. Neste has launched several projects that will improve observation of human rights, and Paulig Group has continued in its transition to the use of certified palm oil and other vegetable oils.

Finnwatch points out that IOI Group and its working conditions are certified by leading palm oil responsibility certification schemes. There are a multitude of shortcomings in the certifications schemes' criteria for and monitoring of labour rights.

"The principal problem is that certifications do not currently take sufficient steps to intervene in the significant human rights risks apparent in recruitment," Ms Vartiala said.