KUALA LUMPUR: Plantation giant IOI Corporation Bhd has raised the benchmark on labour policies as it commits to no longer charge recruitment fees to its workers, respect Freedom of Association and strive towards paying a living wage.

Tenaganita, a Malaysian-based human rights organisation, said on Wednesday these policies collectively set a new standard in an industry that has been repeatedly exposed for labour rights violations and worker exploitation.

"Foreign migrant workers in Malaysia's palm oil industry often face harrowing conditions and suffer under crippling debts due to deception and high fees paid in the recruitment process.

"IOI Group's 'No Fees' policy sets an important precedent in preventing the debts that keep workers trapped in forced labour from happening in the first place," said Tenaganita executive director Glorene Das.

"IOI Group's new labour policies set a new standard, and all other Malaysian palm oil companies must follow suite, including Sime Darby, Felda Global Ventures, Kuala Lumpur Kepong Bhd (KLK), Genting and United Plantations," Das said.

She said Tenaganita was looking forward to having unfettered access to the workers so that any shortcomings in implementation can be brought to the attention of the management for prompt remedial action.

To recap, she said the Malaysian palm oil industry has become notorious for forced labor conditions.

Foreign migrant workers who comprise the vast majority of the workforce on Malaysian palm oil plantations usually have their passports seized upon arrival, limiting their freedom of movement and ability to leave the plantation.

Often, workers are charged large recruitment fees by third-party labour brokers to secure their jobs on the plantations, and must work off the debt leaving them in situation of bonded labour.

This indebtedness and limitations on their freedom of movement amount to conditions of modern day slavery.

IOI Group's new policies raise the bar on labour standards in the Malaysian palm oil industry on a number of critical issues.

"In its new wage policy, IOI commits to paying workers a statutory monthly minimum wage topped with productivity linked incentives, and it commits to calculate a living wage using a credible methodology with the goal of closing the gap between prevailing wages and a living wage.

"In its recruitment policy, IOI commits that foreign migrant workers will not be charged any recruitment related feeds and any feed found to be charged will be reimbursed to workers," she said, adding this policy would be enforced with systematic after-arrival interviews.

Lastly, in its Freedom of Association policy, IOI commits that trade unions will have free access to the IOI estates.

"IOI Group's commitments are an important first step, but implementation will be the real test.

"Consumer brand companies and buyers committing to ending forced labor in their supply chains must monitor IOI's progress and require full implementation of these policies," said Sonja Vartiala, Executive Director of Finnwatch.

"This means, for example, that workers who have paid fees must be reimbursed in full."

IOI Group has a troubled past, and is one of only a few companies to ever have its certification dropped by the Roundtable on Sustainable Palm Oil (RSPO), due to documented complaints of deforestation and the draining and burning of peatlands.

Around the world, palm oil buyers and governments in consuming markets are committing to root out modern day slavery in supply chains through legislation and voluntary mechanisms.

The US and UK passed legislation which require companies to disclose how they are addressing forced labour in supply chains. France has introduced mandatory human rights due diligence for large companies.