KUALA LUMPUR (Feb 15): Sime Darby Plantation Bhd (SDP) announced on Tuesday (Feb 15) several changes and improvements to its governance structures, policies and procedures which include the planned reimbursement of recruitment fees to the oil palm plantation group's current foreign workers and establishment of an improved responsible recruitment procedure to ensure that SDP's operations are free of the scourge of forced labour.

SDP group managing director Mohamad Helmy Othman Basha said that since the imposition of the Withhold Release Order (WRO) by the US Customs and Border Protection (CBP) in December 2020, SDP has undertaken comprehensive audits both internally and with independent organisations.

"Much work has gone into ensuring that SDP's operations are free of the scourge of forced labour. However, that is only half of our goal today. We also want to make sure that both governance and structural improvements are entrenched, and that critical culture change takes root quickly, to eliminate any persistent recalcitrance.

"We are taking today's challenges as an opportunity to create a positive change," Mohamad Helmy said in a statement.

SDP said in the statement it will reimburse 15,078 current foreign workers an aggregate sum of RM38.55 million.

Additionally, SDP is setting aside a sinking fund amounting to RM43.47 million to reimburse 19,565 former foreign workers.

"All reimbursements will be paid in a single lump sum payment to foreign workers. Current foreign workers will be informed of the reimbursement details in writing and receive their monies on Feb 17, 2022. They have full access to various channels of communication to raise any questions or concerns. The 15,078 workers come from Indonesia, India, Bangladesh, Nepal, Myanmar, Cambodia, Sri Lanka, and Pakistan.

"A Sinking Fund Governance Committee (SFGC) has been established to oversee the reimbursement process to former foreign workers. The SFGC is chaired by SDP's senior independent director and comprises directors, senior management, and external legal expert Mr Wilson Ang, partner of Norton Rose Fulbright (Asia) LLP.

"SDP is also engaging law firms in each country of origin to manage the disbursement of funds. The full costs of these legal firms will be borne by SDP. Our foreign workers will not be required to pay any fees to receive their monies," SDP said.

The sinking fund established for former foreign workers covers those who had worked for SDP since Nov 1, 2018, according to the company.

SDP said its former foreign workers were from Indonesia, India, Bangladesh, Nepal, Myanmar, Sri Lanka and Cambodia.

"SDP has a register of former foreign workers and will be reaching out to them over the next few weeks. Where necessary, advertisements will be taken out to contact foreign workers or their next of kin.

"Independent auditors have been appointed to verify the lists of foreign workers and payment amounts. They will also sign off on payments when they are made.

According to SDP, the company has committed to ensuring zero recruitment fees for foreign workers since 2017, with the implementation of its Human Rights Charter.

However, in light of the fees foreign workers have had to pay which were unknown to SDP and despite the existence of the zero-fee policy, SDP said it has revised and developed a more robust system covering the entire process of appointing recruitment agents in collaboration with independent migrant worker rights specialist Andy Hall.

Looking back, SDP said that in August 2021, SDP rolled out its revised responsible recruitment procedure (RRP) and decided to focus initially on piloting the new procedure in the company's upcoming Indonesian worker recruitment activities.

SDP said it set up a management committee specifically to manage the RRP Indonesian pilot project and this committee was involved over several months in shortlisting eight recruitment agents in Indonesia to be engaged for further due diligence and auditing engagement through an open tender exercise.

A total of 19 Indonesian agencies entered into the initial stages of the open tender process, according to SDP.

"SDP has worked with Mr Hall since October 2020 to revise our RRP and guidelines that govern the hiring of our foreign workers. This new policy places heavy emphasis on the appointment of suitable recruitment agents via open tenders, with appropriate checks and balances to ensure workers are no longer exploited or encumbered with recruitment fees.

"SDP will conduct regular due diligence on appointed recruitment agents to establish that they are licensed and have credible track records. Our selected agents chosen through the transparent open tender process will undergo mentoring and training to address any gaps in their understanding of our requirements.

"Their performance will be monitored to ensure contractual accountability for compliance with ethical and transparent recruitment standards, as well as our own policies and standards. During the recruitment process, workers' terms of employment will be transparently and clearly defined in native dialects/languages, to prevent any form of coercion, intimidation or deception. Any recruitment agents who do not comply with our ethical policies and standards will have their contracts terminated to prevent them from working with SDP again," SDP said.

To ensure that all improvements and initiatives planned and implemented are sustainable, SDP said its board has approved an environmental, social and governance (ESG) scorecard that carries as much weight as the operational scorecard.

The ESG scorecard is designed to ensure that clear indicators are put in place, monitored and applied across SDP's Malaysian upstream organisational structure, according to SDP.

Mohamad Helmy said in the statement: "The board and management made the decision that we would face this almost existential challenge [on foreign worker recruitment] head on."

"Every gap we have found has been or is being closed, every lapse in governance is being or has been addressed, any improvement needed has been or is being made. Today, we have implemented new and significant governance and structural changes to ensure that worker welfare and well-being are improved and entrenched within the organisation.

"A new ESG scorecard and accountability mapping process have been implemented. We have also developed new platforms and channels for dialogue with our workers, to improve existing communication, to build trust and ensure they are heard.

"We have taken stern and swift action against those who have not adhered to the company's policies. Consequence management and accountability will help in our effort to ensure a sustainable shift in culture, but I acknowledge that the journey has just started," he said.

On Bursa Malaysia at 5pm on Tuesday, SDP's share price closed up 45 sen or 10.61% at RM4.69, valuing the company at about RM32.45 billion.

SDP has 6.92 billion issued shares, according to the company's latest quarterly financial report.