JEMPOL, Malaysia—On a sun-scorched hillside, bulldozers clear land to plant more of the trees that yield palm oil, which is used in everything from Oreos to Pop-Tarts to Old Spice deodorant. Demand for palm oil has surged in recent years, making it the most-consumed vegetable oil in the world.
Nearby, an army of migrant workers toils in the heat, using long poles with attached sickles to saw off fruit bunches high in the trees, then hoisting the heavy clumps of fruit onto trucks headed to mills that extract oil.
Among the workers is Mohammad Rubel, 22 years old, who said he has been doing this seven days a week, without receiving any pay, since he arrived from Bangladesh in December under the auspices of human smugglers.
To get here, Mr. Rubel said, he endured three weeks in a crowded boat with inadequate food and water, followed by more weeks confined in a jungle camp while guards extorted a ransom from his parents back home. He said he saw dozens of fellow illegal migrants die from exhaustion, disease or beatings.
“If I had known what was waiting, I would never have left home,” Mr. Rubel said.
Global attention has focused this year on South Asian refugees such as him, primarily Bangladeshis and stateless Rohingya Muslims fleeing persecution in Myanmar. Their ordeal, which has drawn comparisons to that of refugees trying to cross the Mediterranean to Europe, reached new levels of concern this spring when Malaysian and Thai police found nearly 150 bodies of people thought to have died in human traffickers’ camps.
Now, some human-rights advocates say the $30 billion global palm-oil industry, which has boomed with demand from the U.S. and China, is part of the problem. Many of the undocumented migrants end up in Malaysia, which exports nearly $12 billion of palm oil a year, around 40% of the world’s supply, and has a growing need for unskilled workers. The Arakan Project, a nonprofit that studies migration through the Bay of Bengal, estimates nearly 50,000 people have boarded boats for the perilous journey to Malaysia in the past two years, many dying on the way.
“There is a huge demand for labor in sectors such as plantations and construction” in Malaysia, said Alfred Vengadasalam, a Malaysian lawyer who specializes in labor issues. “These are also the sectors where abuses are most common.”
The U.S. Department of Labor in December cited Malaysian palm oil as an industry where forced labor occurs. The State Department, in its annual Trafficking in Persons Report for last year, placed Malaysia at the lowest rank, Tier 3, for alleged insufficient efforts to stop human trafficking. The U.S. can’t sign a free-trade pact with a Tier 3 country, under U.S. “fast-track” legislation smoothing the way for the proposed Trans-Pacific Partnership. As a result, there now is pressure to upgrade Malaysia to Tier 2. This year’s State Department human-trafficking report, delayed since June, is expected to be released as soon as Monday. The State Department had no comment.
Malaysia’s government said palm oil is an important contributor to its economy. It said it has set up a center to streamline and coordinate recruitment of foreign workers for the plantations.
At the country’s Ministry of Plantation Industries and Commodities, a spokesman didn’t respond to questions about abuse of workers or the presence of trafficked workers on plantations. He said Malaysian law requires all employers to provide adequate training and protection, and laborers injured on the job are entitled to compensation.
The Malaysian Palm Oil Council, a government agency responsible for promoting the product, said the industry is a leading contributor to the alleviation of poverty and social development in Malaysia. Palm-oil use was fueled in part by a 2006 U.S. Food and Drug Administration order to label foods’ trans fats, prompting snack makers to look for alternatives. Exports to the U.S. more than quadrupled over a decade, and roughly half of all packaged products in supermarkets now contain palm oil or a derivative.
The plantation where Mr. Rubel works is controlled by Felda Global Ventures, a semiautonomous company set up by Malaysia’s government and one of the largest producers of crude palm oil. Its customers, according to U.S. customs and shipping data, include Minnesota-based Cargill Inc., which resells the oil to multinationals such as Nestlé SA and Procter & Gamble Co.
Felda said workers on its plantations, nearly 85% of them foreigners, are afforded basic rights and earn the minimum wage. Cargill and its customers said they weren’t aware of alleged labor abuses on palm-oil plantations and would investigate.
Mr. Rubel’s employer is one of the labor contractors that supply much of Felda’s workforce. It is while employed by contractors, rather than directly for Felda, that abuses such as the withholding of pay are most common, workers said.
“They buy and sell us like cattle,” said one 25-year-old Bangladeshi, who said he had been shunted among three contractors for six months without receiving any pay.
Living in huts in the forest far from stores, the workers often must buy supplies from contractors, who they say set artificially high prices that put workers in debt. One man said his contractor deducted 30% from his weekly pay when he took an hour off to attend Friday Muslim prayers.
Being in Malaysia illegally, workers such as Mr. Rubel see little they can do to change matters, especially since workers said their employers took away their passports. “There is no escape,” said Muhi, a migrant who identified himself with just one name. “They bring policemen and threaten to send us to jail.”
Efforts to reach labor contractors were unsuccessful. The migrant workers declined to identify their contractors, saying they feared deportation or physical harm. In the past, contractors have told rights groups they play an important role in meeting labor demand and sometimes hold workers’ passports for safekeeping.
Malaysian law doesn’t permit someone’s passport to be held by others, the Ministry of Plantation Industries and Commodities said.
Some workers directly employed by Felda said they had somewhat better work experiences and didn’t feel trapped on plantations. Some said they received better pay than they had earned on construction sites or in the hospitality industry. Several men said they had been allowed to go home every two years.
Felda said it was working to employ a larger part of its workforce directly. A spokesman said all workers on its plantations, regardless of employer, are accorded rights such as the Malaysian minimum wage. Under Malaysian law, a plantation owner is responsible for all workers on its property.
The minimum wage is 900 ringgit, or about $240, a month. Several workers interviewed, including some with legal documents, said their pay was often below the minimum. A number of recent pay slips seen by The Wall Street Journal, bearing Felda’s name, showed monthly payments of 700 to 800 ringgit.
The company said people have to work at least 26 days a month to qualify for the minimum wage. Workers said supervisors sometimes didn’t give them enough work to meet that threshold, although under Malaysian law, plantations must provide enough for full-time workers to make minimum wage.
The recruiting of workers abroad is sometimes done by labor brokers and sometimes directly by agents for smugglers. The last large-scale intake of plantation workers from Bangladesh through regular channels was in 2008. Since then, government-to-government recruitment has largely stalled, with both sides citing irregularities in the process.
Muhammad Rashed, based in the northern Kedah state, is a labor broker. He said, however, that for passage to Malaysia, he had no choice but to work with smugglers.
Fielding calls on a battered Nokia phone, Mr. Rashed said the smugglers compete aggressively to carry workers so they can collect fees from them later, while holding them captive. “A few months ago, they forced 10 of my people to get on a different boat at gunpoint,” he said.
Mr. Rubel, the young Bangladeshi, was living in the city of Bogra when a smugglers’ agent tempted him with talk of good wages on plantations abroad.
A stocky man with a mop of unruly hair, Mr. Rubel said he was struggling to find work at home and wanted to show his parents he could earn a living. On an October evening, he traveled with three friends to the coastal town of Teknaf. They boarded a 40-foot wooden fishing boat that held nearly 200 other Bangladeshis and ethnic Rohingya Muslims from Myanmar.
The agent told him he would be paid his wages, and from them he could pay the fee of 160,000 Bangladeshi takas, or $2,000, according to Mr. Rubel. He said the agent, who couldn’t be reached for comment, promised there would be plenty of food and water on the trip.
Instead, he said, armed men operating the boat rationed food and water so the packed-in migrants would make fewer trips to the toilet, and beat them when they asked for more. The heat and stench were overpowering, he said, and he saw dozens die.
At one point, he said, he watched as the traffickers threw migrants’ bodies into the sea, after slitting open their abdomens so they would sink.
After three weeks, the boat reached southern Thailand. Mr. Rubel said he and hundreds of others were put in crowded camps, sleeping entangled in one another’s limbs behind coils of barbed wire.
He and several others who passed through the camps said that the traffickers, demanding money to release the migrants, would put them on the phone to their parents and beat them so the parents could hear their screams and pay up. Those who couldn’t pay were held and beaten regularly, he said.
Mr. Rubel said the smugglers called his father and told him “they would bury me in the jungle” if he didn’t pay. His father sold a piece of land and paid the smugglers $2,500 through an agent in Bangladesh. The traffickers later marched him and others for days through the jungle to a spot inside Malaysia. They were passed to other operatives and taken to the Malaysian town of Jempol, where Mr. Rubel found work at the Felda plantation as an employee of one of the labor contractors.
The work is challenging. Palm oil fruit grows atop trees up to 65 feet high in reddish-golden bunches that can weigh more than 60 pounds.
Mr. Rubel said the contractor has withheld all of his wages, without giving a reason. Contractors sometimes pay recruitment fees to labor brokers, then recover these by not paying workers for a few months, according to workers and brokers.
Mr. Rubel didn’t protest. He worried that if he did, the contractor would alert authorities and he would be arrested. He said he believes if he stays long enough, he will eventually start receiving wages.
One of his jobs is spraying pesticides, including the weed killer Paraquat, which some countries restrict because of its toxicity. He said he got protective gear but no training, and using the chemical made his head spin. Other workers said contractors told them to buy their own protective gear if they wanted it.
The Felda spokesman said the company sanctions the use of Paraquat only “under specific conditions where regular herbicide is not able to give effective control.”
Some workers, even those directly employed by Felda, said they weren’t given compensation if accidents occurred. Al Amin, a Felda employee of seven years, said he suffered multiple fractures of his right leg when run over by a company tractor. Another employee, Malek Mia, said he partially lost eyesight when a palm thorn penetrated his left eye. Although the company provided for some medical care, both said, they have had to pay for much of it themselves.
Felda said all workers are covered by insurance, and it will investigate allegations of nonpayment after injury.
Felda is a member of the Roundtable on Sustainable Palm Oil, or RSPO, a certification scheme meant to ensure environmental and social standards. Its rules say all plantation workers must have adequate training and protection and be paid a living wage. The measure of that is left to local authorities.
The RSPO’s secretary-general, Darrel Webber, said he was unaware of any abuses faced by workers on Felda plantations but would investigate.
Many global companies, including Nestlé and P&G, commit to buying palm oil only from RSPO-certified plantations. Nestlé said it was unaware of conditions at Felda’s plantations but was refocusing resources to “ensure that our responsible sourcing requirements are met” in Malaysia. P&G said it would look into the allegations and “take any necessary corrective action.”
At Felda customer Cargill, “we take this matter seriously and will be investigating,” a spokeswoman said. Cargill was among companies that last year committed to begin tracing palm oil to the plantations where it is produced, though this effort is driven mostly by environmental concerns.
The boats are still coming to Malaysia, despite the onset of monsoon season. The Thai coast guard in mid-June spotted several, each carrying more than 500 people it said were migrants on their way to Malaysia, The Wall Street Journal reports.