At P&G, respecting human rights is fundamental to how we manage our business. We support the UN Guiding Principles on Business and Human Rights and expect our business partners to operate in the same manner. We engage with suppliers when issues arise, assess the problem, and take appropriate action.
FGV Holdings Berhad (FGV) is a major industry supplier of palm oil and palm kernel oil. P&G and FGV have a 50:50 joint venture, FPG, which is an oleochemicals operation that sources palm kernel oil from FGV to manufacture chemicals, fatty alcohols, methyl esters and glycerin.
An RSPO complaint was filed in 2018 against FGV regarding the alleged conditions of forced labor among its foreign worker population. This catalyzed FGV to take a more holistic approach toward preventing and addressing human rights issues within its supply chain. FGV took a number of actions in response to the complaint including hiring senior management with human rights expertise, developing an action plan to remediate issues and implementing a supplier code of conduct, guidelines and procedures for the responsible recruitment of foreign workers. While these actions are important, P&G and a range of stakeholders believe that FGV’s pace of progress to improve its human rights record can, and must, be expedited.
P&G recognizes the gravity of this issue for both the supply chain and the migrant workers who are impacted. We could walk away, but we know from past experience that when companies come together to solve problems, real solutions can be found that drive significant long-term change for the industry as a whole.
In light of this, P&G will invest to accelerate FGV’s human rights remediation efforts. We know it is the right thing to do and essential to ensure responsible business practices. FGV has agreed to partner with us, expert consultants and key stakeholders to drive change in their organization, as well as the entire industry.
Together, we will bring in the Fair Labor Association to assess FGV's current remediation plans, validate current actions, and recommend additional steps for faster progress. We will continue to seek advice from credible experts, like Shift, the leading center of global expertise on human rights, as well as create meaningful dialogue with stakeholders as this can lead to more informed actions and decisions. Transparency and accountability will be critical throughout this whole process and we commit to provide regular updates.
For P&G and FGV, this is not an investment in a short-term plan, but long-term sustainable solutions. The changes FGV makes will have an impact on the supply chain, their future business and the quality of life for migrant workers. This is just the beginning, and there is still work to be done. Together, we can make a meaningful difference.
Update: November 20, 2019