Moody’s said this situation could damage SDP’s relationship with customers and other stakeholders, while large losses in earnings, if any, could weaken its credit profile. — ReutersMoody’s Investors Service said the United States Customs and Border Protection withhold release order against palm oil giant Sime Darby Plantation Bhd’s products, which is premised on forced labour allegations, is credit negative.
The WRO was issued by the US Customs last week based on the information that it said “reasonably indicates” the presence of all 11 of the International Labour Organisation’s forced labour indicators in SDP’s production process. “While SDP has stated that it has not yet received details of the allegations, we expect SDP to engage with the US Customs and its various stakeholders to resolve the allegations and take any corrective actions required to protect workers’ rights,” Moody’s said in a statement today.
“ particularly because of increasing scrutiny from stakeholders, including customers and investors, regarding environmental, social and governance issues associated with palm oil production,” it added.
Source: Loan Digest (loandigest.net)