PRESS RELEASE 16.9.2014

Neste Oil and Paulig Group palm oil supplier IOI Group suspected of serious labour rights violations in Malaysia. 

A new report by Finnwatch alleges that IOI Group pays wages lower than the statutory minimum wage, confiscates its worker’ passports and restricts freedom of association. A large part of IOI Group's plantation workers have no understanding of their employment contract, which is written in a foreign language. Over 80 per cent of the workers at IOI plantations are migrant workers from countries such as Indonesia, Bangladesh and Nepal.

“The employment contract encourages workers to work up to 10-12 hour workdays. Wages are based on the amount of palm oil bunches gathered by a worker, and workers do not receive compensation for overtime. Many workers do not earn even the statutory minimum wage,” explains Finnwatch Executive Director Sonja Vartiala.

Nearly all the migrant workers interviewed for Finnwatch's report had taken out loans or sold their property in order to be able to work in Malaysia. IOI deducts recruitment fees directly from its workers’ salaries, and pays workers a salary that is smaller than the minimum wage during their probationary period.

“Many workers told us that they had been scammed and wanted to return to their home country. However, as they had no money and had incurred debt, they had no other option than to work at the plantation.”

Many of the findings in Finnwatch’s report meet with the International Labour Organization's indicators for forced labour and human trafficking. Neste Oil and Paulig Group have initiated procedures in order to investigate and correct the problems brought to light by the report. All the plantations researched by Finnwatch were RSPO and ISCC certified, and the report criticises leading palm oil certifications for inadequate monitoring of working conditions.

“Certification assessments have turned a blind eye to labour rights violations. The criteria for both certification systems require that workers are paid a decent living wage that exceeds the statutory minimum wage. In reality, it seems that the systems are unable to even monitor whether wages are in compliance with legislation,” Ms Vartiala states.

In addition to Neste Oil and Paulig Group, the Finnwatch report researched the responsibility of palm oil in nine other companies that operated in Finland. All the companies believed that RSPO certification would ensure that responsibility was monitored.

“The majority of these companies were not aware of where the palm oil they purchased had been produced. Distressingly many companies still also used non-certified palm oil. The Panda and Kantola brands, which belong to the Orkla Group, did not respond to the survey. Raisio would not disclose their palm oil suppliers reasoning that this was a trade secret and Valio did not tell how much palm oil is used in its products. Lumene reported that it did not have the opportunity to answer Finnwatch’s questions. Finnwatch also blames EU regulations for the poor working conditions in palm oil production.

“No responsibility requirements have been set for palm oil purchased by food and cosmetics companies, while the EU ´directives that apply to biofuels overlook social responsibility,” Ms Vartiala says.

Unofficial translation of the Finnwatch report “The Law of the Jungle – Corporate responsibility of Finnish palm oil purchases” is available at >>

Press release has been updated on 17th of September: Valio did tell Finnwatch its palm oil supplier but did not tell how much it uses palm oil in its products.

Further information:
Sonja Vartiala
Executive Director
Finnwatch ry
+358 44 5687465
sonja.vartiala (a) finnwatch.org 

Tämä teos, jonka tekijä on Finnwatch, on lisensoitu Creative Commons Nimeä-EiKaupallinen-EiMuutoksia 4.0 Kansainvälinen -lisenssillä.