KUALA LUMPUR (Feb 28): FGV Holdings Bhd (KL:FGV) is actively engaging with US authorities to lift the withhold release order (WRO) that has barred the group from exporting its palm oil and palm oil products to the US since 2020.

FGV first submitted its petition for WRO modification in June 2024, after implementing extensive remediation efforts to enhance labour rights and worker welfare. However, the US Customs and Border Protection (CBP) requested for further details, particularly on overtime working hours, leading the group to resubmit the petition on Feb 15 this year, said group chief executive officer Fakhrunniam Othman.

"Let us hope there will be a positive conclusion," he said at a press conference following FGV’s fourth-quarter results announcement on Friday, without specifying a timeline for resolution. He added that the group is “aggressively engaging” with the US CBP to clarify additional requirements and explore the next steps. 

To address the labour concerns, FGV has implemented some improvements, including upgrading workers' housing facilities and reimbursing foreign workers for recruitment fees, he said.

FGV, one of the world's largest crude palm oil producers, was banned by the US CBP in 2020 over allegations of forced labour on its estates. The company subsequently commissioned an independent audit to review its labour conditions.

About eight Malaysian companies — mainly in the rubber glove and palm oil sectors — have been subjected to WROs due to alleged forced labour practices. Meanwhile, Sime Darby Plantation Bhd, now known as SD Guthrie Bhd (KL:SDG), successfully had its WRO lifted in February 2023, allowing it to resume palm oil exports to the US after a two-year ban.

FGV shipped less than 10,000 tonnes of European Union Deforestation Regulation (EUDR)-compliant crude palm kernel oil (CPKO) in the second half of last year, and the group aims to increase the export volume, said the group director of the oils and fats division, Zulkifli Othman.

CPKO, primarily used in food and personal care products such as non-dairy ice cream, margarine, chocolate, confectionery, soap, and detergent, is now being produced in compliance with stringent EUDR standards, he said. The EUDR is a legislative framework designed to ensure that products imported into the EU are free from deforestation and forest degradation activities.

"We will continue focusing on this area to ensure that volumes can grow further. When buyers require it, we will be ready to produce and supply," he added.

Shares of FGV closed down two sen or 1.72% at RM1.14 on Friday, giving it a market capitalisation of RM4.23 billion.

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