MALAYSIA: FSC disassociates from SFI/BILT over labour rights

In a landmark decision the Forest Stewardship Council (FSC) International Board of Directors have chosen to disassociate from Malaysian timber company Sabah Forest Industries (SFI) and their Indian parent Ballapur Industries Limited (BILT) due to repeated violations of the workers’ rights of members of the Sabah Timber Industry Employees Union (STIEU). This is the first time a timber company has been disassociated from FSC on the grounds of workers’ rights violations. 

"With this decision FSC are clearly drawing a line in the sand", said BWI General Secretary Ambet Yuson. "Consumers purchasing certified timber do so because it meets certain social and environmental criteria, including the protection of workers' rights. In our eyes this decision to disassociate embodies the FSC label with even greater legitimacy, and will serve as a powerful example for other employers in the industry." 

The decision comes after an investigation by an independent complaints panel (responding to a BWI complaint), concluding there was clear and convincing evidence that SFI had not complied with ILO Core Conventions 87 (Freedom of Association) and 98 (Collective Bargaining). The FSC Board enumerated a number of corrective measures to be taken by SFI and BILT, and required SFI and its parent company BILT to submit an action plan and a progress report by 24 June 2016. 

Not only did SFI/BILT fail to submit these documents (even after being granted a week’s grace period), they also failed to comply with the required corrective measures. One such requirement was the withdrawal of all legal action delaying STIEU’s recognition. Not only did SFI not withdraw the pending judicial review proceedings they had filed (regarding a direction from the Minister of Labour effectively requiring recognition), they even appealed the decision after the Sabah High Court rejected their claim. 

STIEU Secretary-General Engrit Liaw said the decision indicated that FSC is firmly on the side of workers. “Certified wood means respect for workers’ rights,” said Liaw, “and that’s why FSC have chosen to disassociate from SFI. While Malaysian law may facilitate violations of workers’ rights, the FSC label holds companies to a higher standard. Companies like SFI are hurting Malaysia’s international reputation as a producer of sustainable timber products that respects clearly defined social and environmental norms. 

“This is a lesson for other companies to comply with the FSC’s Policy for Association or risk disassociation themselves”, Liaw continued. “Further, we are calling on the Malaysian Government to fix the loopholes that allow employers to sidestep union recognition and collective bargaining, otherwise this pattern of behaviour will continue and the international reputation of the Malaysian timber industry will deteriorate altogether.” 

The decision can be viewed by visiting this link.