Washington, DC. Nixon Peabody LLP client Sime Darby Plantation Berhad (SDP) [KLSE: SIMEPLT], one of the world’s largest sustainable palm oil producers, has been cleared by U.S. Customs and Border Protection (CBP) to import its products into the United States.
“Today’s decision demonstrates our commitment to ensuring that our workers feel safe, supported, and respected,” said Mohamad Helmy Othman Basha, Group Managing Director of SDP. “We are pleased that CBP recognized the hard work we have performed to enhance the protections afforded to our workforce and are grateful for their cooperation throughout this process.”
Nixon Peabody’s Cross-Border Risks team worked collaboratively with Ana Hinojosa, former executive director of CBP’s Trade Remedy and Law Enforcement Directorate Forced Labor Division, and SDP Chief Financial Officer Renaka Ramachandran to examine the company’s operations, analyze supply chain risks, and establish updated processes. As a result, SDP implemented comprehensive reforms to its business practices to ensure that no indicators of forced labor exist in its operations. Although SDP had long been committed to meeting or exceeding international standards, the company recognized the need to update these policies and procedures and bolster oversight throughout its operational units.
The law firm’s Cross-Border Risks team is led by former acting Director of U.S. Immigration and Customs Enforcement and former acting General Counsel for the U.S. Department of Homeland Security John Sandweg.
“CBP’s decision reflects the incredibly hard work undertaken by SDP to enhance the lives of its employees,” said Sandweg, a Nixon Peabody partner. “It is imperative that corporations across the globe have a clear and complete picture of their business and labor practices—but often that is not as straightforward as you might think. Companies face substantial risk of being investigated for potential violations in connection with the import of goods produced or manufactured with alleged inappropriate labor conditions. When business operations cross multiple borders, rigorous audits are a necessary first step to avoid running afoul of the law.”
“Like other successful companies, SDP found out that the issues that brought about CBP enforcement actions do not resolve themselves,” said Hinojosa. “They invested significant financial and human resources to address all of the indicators of forced labor throughout their palm oil production operations in Malaysia. The modification of the finding by CBP was well earned by SDP.”
In December 2020, CBP initiated an enforcement action against Malaysia-based SDP alleging the presence of forced labor in the company’s production process. Over the following year and a half, SDP introduced a number of new practices and policies as part of its renewed commitment. These include introducing stricter expectations for recruitment agents to ensure these agents are held accountable for compliance with ethical and transparent recruitment standards, the reimbursement of recruitment fees, and enhanced oversight of contractors to ensure they strictly adhere to SDP’s policies and guidelines when managing workers. SDP also bolstered the ability of the workforce to file grievances, upgraded workers’ housing facilities, and implemented various measures to ensure better oversight of operational units.
After working collaboratively with SDP, Hinojosa, and other third-party consultants to bring the company into compliance, Nixon Peabody secured the removal of CBP’s Withhold Release Order—an uncommon move signaling that the company has made wide-ranging reforms to its business practices.
In addition to Sandweg, the Nixon Peabody team working with SDP includes counsel Rachel Winkler, associates Catherine Hunstad, and Andy Kaplan, and investigative director Jerry Robinette, former special agent in charge for the U.S. Immigration and Customs Enforcement Homeland Security Investigations (HSI) in San Antonio, Texas.
A proactive, unbiased assessment is a company’s key first step in avoiding government enforcement actions. Learn more about how Nixon Peabody’s Cross-Border Risks team can help your organization stay in front of potential compliance issues.