When the United States Customs and Border Protection (CBP) confirmed the modification of the Withhold Release Order (WRO) imposed on FGV Holdings Berhad, it marked more than the reopening of a critical export channel. It marked the culmination of a years-long transformation that overhauled the group’s labour governance, strengthened its sustainability frameworks, and reshaped its approach to managing long-term risks.

Effective Jan 15 this year, the modification allows FGV, its subsidiaries, joint ventures and customers to resume exporting oil palm products into the United States. For the group, however, the milestone represents a deeper lesson in corporate accountability, resilience and the discipline required to align operations with international labour and human rights expectations.The WRO was first issued on Sept 30, 2020, during the COVID-19 lockdown following allegations that workers were exposed to forced labour indicators.

Fakhrunniam, Group Chief Executive Officer, said the process required hard decisions and a willingness to revamp traditional practices and introduce new ways of doing things.

Leadership and accountability at the forefront

FGV’s leadership prioritised swift action and shared responsibility across the organisation. A cross-functional WRO Task Force was established to ensure reforms were integrated across business units, rather than treated as standalone compliance efforts.

The group appointed independent auditor LRQA to assess gaps in labour practices and design a remediation plan, while US-based legal counsel Crowell & Moring provided guidance to align initiatives with international standards and best practices.

Zulkifli Othman, Group Director of Oils and Fats Division, said the disruption pushed us to professionalise labour governance and tighten traceability.

Moving beyond short-term fixes

Management viewed remediation as a long-term investment in integrity and sustainable growth. Engagement with CBP helped clarify regulatory expectations, while reforms were designed to be enduring rather than reactive.

Stronger labour standards have since improved workforce stability and enhanced the group’s reputation. Upgraded due diligence processes, risk management frameworks and internal controls now enable earlier detection of operational gaps and support long-term resilience.

Tangible reforms on the ground

FGV reinforced ethical recruitment practices, strengthened due diligence on recruitment agencies, and reimbursed recruitment fees to 23,461 current and former workers under its no-recruitment-fee policy.

Between 2024 and 2025, a total of 2,520 homes were upgraded while 1,002 new housing units were built. Access to clean water was enhanced through the upgrading of 27 treatment plants and the installation of 1,193 water filters across 55 locations.

Izham Mustaffa, Group Director of Plantation Division, said FGV enhanced workers’ living conditions, internet connectivity in remote locations, and freedom of association.

Satellite internet was rolled out to 165 remote sites, while digital monitoring systems were introduced to track working hours, rest days and compliance with minimum wage requirements.

Worker representation was also strengthened through the establishment of Harmony Communication Committees, improved grievance channels, and closer collaboration with the National Union of Plantation Workers to uphold freedom of association.

Embedding sustainability

Ethical and responsible recruitment became a cornerstone of the reform process. Ongoing monitoring, supported by strengthened policies, audits and human rights due diligence, ensures risks are identified and addressed proactively.

Nurul Hasanah, FGV’s former Chief Sustainability Officer, said responsible and ethical recruitment is a critical aspect of FGV’s commitment to respect human rights and uphold human dignity.

FGV’s Sustainability Framework, updated in 2024, is built around five pillars: Economic Growth, Governance, Social, Environment, and Innovation and Technology. These align with Malaysia’s 12th Malaysia Plan and the National Action Plan on Forced Labour.

Greater scrutiny across supply chains

The WRO not only halted exports to the United States but also intensified scrutiny from buyers. In response, FGV introduced end-to-end traceability, segregated supply chains, and reduced dependence on high-risk third-party suppliers.

Clear and transparent engagement with buyers, alongside efforts to diversify markets, helped sustain commercial confidence. At the same time, permanent compliance systems and early-warning mechanisms have been put in place to strengthen resilience going forward.

Building credibility through communication

Communications were anchored in verified updates tied to regulatory milestones. By prioritising transparency and accuracy, FGV was able to rebuild stakeholder trust and shift the narrative from crisis response to accountability and reform.

Azmi Yaakop, Chief Strategic Communications Officer, said credibility depends on accuracy and consistency when engaging international parties.

A stronger foundation for the future

FGV views the WRO modification as a milestone. Sustainability and human rights are now embedded as strategic priorities, supporting continued market access, investor confidence and long-term growth.

This content is provided by FGV Holdings Berhad

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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