SUNGKAI (Nov 8): FGV Holdings Bhd (KL:FGV), one of the world’s largest producer of crude palm oil (CPO), said it is actively working with its clients to facilitate the export of crude-palm-kernel-oil (CPKO) products that comply with the European Union Deforestation Regulation (EUDR) into Europe.
The CPKO products, primarily used in food and personal care items such as non-dairy ice cream, margarine, chocolate, confectionery, soap, and detergents, are sold to clients, who then export them to Europe.
Since August this year, FGV has supplied a total of 6,749 metric tonnes of EUDR-compliant CPKO products to its clients, according to the group’s sustainability officer Nurul Hasanah Ahamed Hassain.
According to Nurul Hasanah, the CPKO products have complied with the EUDR by meeting the requirements set forth in Article 2 of Regulation (EU) 2023/1115 of the European Parliament and Council, dated May 31, 2023.
This regulation pertains to the availability of certain commodities and products associated with deforestation and forest degradation on the EU’s single market, and for export from the EU.
“Based on discussions with our buyers, they indicated plans to export to Europe by next month. They (buyers) will process FGV’s CPKO in their facilities in Malaysia, before exporting the end product to their operation in Europe,” she said at a press conference during a media familiarisation trip to Sungkai, Perak.
When asked whether the documentation for buyers to export the products had been approved by the EU, she said, “We have engaged an independent party to conduct all necessary verification based on EUDR requirements, particularly for mapping. At this time, the documentation has not yet been tested by EU authorities.”
“It’s crucial for us to ensure that all documentation we have gathered and shared with our buyers is accepted by the EU authorities. We are working closely with our buyers to achieve this (compliance),” she added.
Earlier last month, the European Commission (EC) had proposed that the EUDR be delayed a year to Dec 30, 2025, which was welcomed by many, including the palm oil-producing countries of Malaysia and Indonesia, although there were brickbats thrown at the EC for the decision.
The EUDR is aimed at keeping products that contribute to deforestation out of the EU, and this affects commodities such as cocoa, coffee, soy, palm oil and beef.
Withhold release order
On the potential lifting of a ban on the import of palm-oil products, Nurul Hasanah expressed hope that the change in US presidency and ongoing negotiations with US authorities will lead to a positive resolution.
“I hope the Withhold Release Order (WRO) will be lifted soon, as we submitted a petition for modification to the US Customs and Border Protection (CBP) in June,” she said. “The US has already changed its president, which worries me as well, but I hope the executive at [the] CBP will remain neutral”.
FGV was banned by the US CBP in 2020, due to allegations of forced labour on its estates. The group then engaged an audit firm to review the labour conditions.
About eight Malaysian companies have been slapped with the WRO by the US CBP in the past two years, due to allegations that they used forced labour. These companies are mainly manufacturers of rubber gloves and palm-oil products.
To improve labour conditions, Nurul Hasanah noted that FGV has committed RM112 million to reimburse recruitment costs for active, new, and former foreign workers.
Additionally, FGV’s board has approved a RM605 million budget for 2024-2026 to upgrade workers’ housing, targeting the renovation of 3,821 housing units and the addition of 1,328 new units.