The U.S. said it will ban all shipments of palm oil from one of the world’s biggest producers after finding indicators of forced labor and other abuses on plantations that feed into the supply chains of some of America’s most famous food and cosmetic companies.

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The order against Malaysian-owned Sime Darby Plantation Berhad and its local subsidiaries, joint ventures and affiliates followed an intensive months-long investigation by the U.S. Customs and Border Protection’s Office of Trade, said Ana Hinojosa, one of the agency’s executive directors, reports AP.

Hinojosa said the investigation “reasonably indicates” abuses against workers that included physical and sexual violence, restriction of movement, intimidation and threats, debt bondage, withholding of wages and excessive overtime. Some of the problems appeared to be systemic, occurring on numerous plantations, which stretch across wide swaths of the country, she said.

“Importers should know that there are reputational, financial and legal risks associated with importing goods made by forced labor into the United States,” Hinojosa said in a telephone press briefing.

The order was announced just three months after the federal government slapped the same ban on another Malaysian palm oil giant, FGV Holdings Berhad -- the first palm oil company ever targeted by Customs over concerns about forced labor. The U.S. imported $410 million of crude palm oil from Malaysia in fiscal year 2020, representing a third of the total value shipped in.

Also read: Trade show begins to promote Bangladesh-US business ties

The bans, triggered by petitions filed by non-profit groups and a law firm, came in the wake of an in-depth investigation by The Associated Press into labor abuses on plantations in Malaysia and neighboring Indonesia, which together produce about 85% of the $65 billion supply of the world’s most consumed vegetable oil. Palm oil can be found in roughly half the products on supermarket shelves and in most cosmetic brands. It’s in paints, plywood, pesticides, animal feed, biofuels and even hand sanitizer.

The AP interviewed more than 130 current and former workers from two dozen palm oil companies, including Sime Darby, for its investigation. Reporters found everything from rape and child labor to trafficking and outright slavery on plantations in both countries.

Also read: 41,800 litres of stolen palm oil recovered in Narayanganj

Earlier this month, 25 Democratic lawmakers from the U.S. House Ways and Means Committee cited AP’s investigation in a letter calling for the government to come down harder on the palm oil industry in Malaysia and Indonesia, asking Customs and Border Protection if it had considered a blanket ban on imports from those countries.

“In our view, these odious labor practices and their pervasive impact across supply chains highlight the need for an aggressive and effective enforcement strategy,” the letter said.

Sime Darby, which did not immediately comment, has palm oil plantations covering nearly 1.5 million acres, making it one of Malaysia’s largest producers. It supplies to some of the biggest names in the business, from Cargill to Nestle, Unilever and L’Óreal, according to the companies’ most recently published supplier and palm oil mill lists.

Also read:Upbeat prospect for Malaysia's palm oil prices next year

Hinojosa said the agency’s decision to issue the ban should send an “unambiguous” message to the trade community.

“Consumers have a right to know where the palm oil is coming from and the conditions under which that palm oil is produced and what products that particular palm oil is going into,” she said.

Meanwhile, Duncan Jepson of the anti-trafficking group Liberty Shared, which submitted the petition leading to the Sime Darby ban, filed two additional complaints Wednesday — one to the UK’s Home Office, questioning the company’s disclosure about its protection of human rights under the country’s Modern Slavery Act, and the other to the Malaysian stock exchange, regarding the company’s stated commitments to sustainability. Both complaints questioned the accuracy of Sime Darby’s disclosures in light of the CPB’s findings.

Also read: Rape, abuse in Palm oil fields linked to top beauty brands

Jepson said the U.S. ban also should be a red flag for Asian and Western financial institutions that have helped support the industry, saying ties to forced labor could have serious consequences for banks and lenders.

The U.S. government’s announcement about Sime Darby marked the 14th time this year Customs has issued an order to detain shipments from an array of sectors following similar investigations into forced labor. They include seafood and cotton, along with human hair pieces believed to have been made by persecuted Uighur Muslims in Chinese labor camps.

Under Wednesday’s order, palm oil products or derivatives traceable to Sime Darby will be detained at U.S. ports. Shipments can be exported if the company is unable to prove that the goods were not produced with forced labor.

 

The Chinese economy is expected to usher in 2021 with stronger recovery after surviving a triple whammy of COVID-19, economic slowdown and trade protectionism in an eventful 2020.

Standing at the forefront of epidemic control and resumption of work and production throughout this year, the world's second largest economy has rebounded from the early lows to become the only major economy expected to achieve positive growth.

In the year ahead, a brand-new prospect will open up as the country is ready to implement its 14th five-year plan (2021-2025) and Long-Range Objectives Through the Year 2035.

The following aspects might offer a glimpse into the evolving Chinese economy in the ever-changing times.

STRONG PERFORMANCE EXPECTED

As the country is on high alert for a new wave of COVID-19 this winter, starting to inoculate key groups including workers in the cold chain industry, customs, healthcare, markets and public transportation with COVID-19 vaccines, a massive lockdown is a highly unlikely event.

As a result, an attractive economic growth data set will be in the bag for the first quarter of next year, as the pandemic blow inflicted a 6.8-percent contraction on the first quarter of this year.

Based on existing forecasts by international institutions, optimism will prevail throughout the year, with the International Monetary Fund (IMF) projecting an 8.2 percent growth for the Chinese economy, and the World Bank, 7.9 percent.

Zhang Liqun, a researcher with the Development Research Center of the State Council, predicted that tremendous domestic market potential will drive growth of above 8 percent next year.

Chinese authorities said they will manage to ensure that the economy continues to operate within a reasonable range, just as the recently concluded Central Economic Work Conference required.

A reasonable range means sufficient jobs and balanced supply-demand relationship, Zhang said, stressing efforts to expand domestic demand and sustain the current macroeconomic policy's orientation and intensity.

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Read Also: China's economy accelerates as virus recovery gains strength

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STIMULUS POLICY REMAINS

While China has placed greater emphasis on the consistency and sustainability of its macroeconomic policy, targeted stimuli will not exit easily so as to boost consumption demand, enliven market entities, consolidate economic recovery and cope with new challenges.

"Endogenous driving forces such as personal consumption and manufacturing investment will be the major growth engines for China's economy next year," according to Xing Ziqiang, a chief economist with Morgan Stanley China. Xing projected that personal consumption growth will accelerate from minus 1 percent in 2020 to 12 percent next year, contributing 6.7 percentage points to GDP growth.

On further boosting domestic demand, Gao Ruidong, an analyst with Everbright Securities, suggested that fiscal policy should play a more active role in optimizing income distribution, increasing investment in technological upgrades in the manufacturing industry, and strengthening demand side management.

Macroeconomic policies need to be flexible, and appropriate adjustments should be made in line with economic development, said Dong Ximiao, an analyst with Merchants Union Consumer Finance Company. Some provisional measures might phase out if the economy recovers rapidly next year, he said.

Also, liquidity should be more precisely injected into key fields and weak links, Dong added, calling for more support for technological innovation, small enterprises and green development.

NON-STOP INNOVATION

Next year will continue to see the country's commitment to innovation, a major growth driver which was underlined at the recent Central Economic Work Conference.

Vowing to strengthen its national strategic technologies, China will make efforts to step up the formulation and implementation of a 10-year action plan to boost basic research, and plan a number of basic discipline research centers, according to the meeting.

While giving full play to the state's role in organizing major science and technology innovations, China will also maximize the principal role of enterprises in such innovations, supporting innovation activities of small and medium-sized firms.

Commenting on the country's decision to encourage enterprise participation in innovation, Yuan Min, vice president of Tencent, said the Chinese technology giant was strongly motivated and will step up efforts in basic research, strengthening its own innovation capabilities and initiating more innovation programs.

CONTRIBUTION TO WORLD ECONOMY

In 2021, China is estimated to contribute more than one-third to global economic growth, according to a report by Organization for Economic Co-operation and Development.

Apart from its steady economic recovery, China's contribution comes from its devotion to opening up at a higher level and creating a better business environment.

In November, China signed the Regional Comprehensive Economic Partnership agreement, which launched the world's biggest free trade bloc. China also implemented the foreign investment law this year, and unveiled a much shorter negative list for foreign investors.

Despite uncertain factors in the external environment, China's foreign trade of goods rose 1.8 percent year on year in the first 11 months, while foreign direct investment into the Chinese mainland, in actual use, expanded 6.3 percent year on year.

Foreign companies have remained confident in the Chinese market. A survey released by China's Ministry of Commerce in July showed that some 99.1 percent of the respondent foreign companies said their operations in the world's second-largest economy will continue.

Tao Lin, Tesla's Global Vice President, said this year's economic work conference has convinced the electric car maker that investing in China is a correct decision, adding that Tesla is fortunate to be moving ahead with China's steady economic recovery.

In the future, Tesla will continue to expand investment and be more integrated into the Chinese market, and contribute to building the new development paradigm, Tao said.

New York City has seen almost one in seven nationally recognized chain-store branches close their doors in 2020 as the COVID-19 pandemic ravaged the country and sent consumers scurrying for cover, according to a latest industry report.

A record high 1,057 chain stores, including 70 Duane Reades, 49 Starbucks and 22 Papyruses, have ended their businesses over the past 12 months, said the Center for an Urban Future's annual "State of the Chains" report released this week.

The 13.3 percent decline shatters all previous records reported by the nonprofit agency since it began tracking the data 13 years ago. Last year, just 3.7 percent of all chain outlets closed, up from 0.3 percent in 2018.

"If the national chains are scaling back like this, I have to imagine it's twice as bad for mom-and-pop stores, who don't have the same ability to weather a storm or get access to financing," the center's executive director, Jonathan Bowles, was quoted by the New York Post as saying.

Among the five boroughs of the city, Manhattan absorbed the deepest cuts with 520 chain closures, almost half of the city total, due to the borough's dependence on office workers, tourists and wealthy residents who have decamped to homes outside the city, said the report.

Among the hardest-hit sectors were sandwich shops that cater to office workers, many of whom since March have been able to work from home, according to the report.

Meanwhile, some 40 chains actually added locations, led by Popeyes fried-chicken fast food, which added 11 new eateries.

Bowles believes there's a chance that much of the food-sector decline is only temporary, assuming a large number of workers return to their offices when the pandemic eases.

A huge surge in online shopping during the pandemic has been a savior for retailers, but it comes at a price.

Shoppers are expected to return twice as many items as they did during last year's holiday period, costing companies roughly $1.1 billion, according to Narvar Inc., a software and technology company that manages online returns for hundreds of brands.

Retailers don't want the returns, but they do want shoppers who may not feel safe going to stores to be comfortable buying things they haven't seen or tried on in person.

People have been doing so much online buying since March that carriers like UPS and FedEx were already at full capacity before the holiday shopping season. And online sales just keep soaring. From Nov. 1 though Tuesday, they spiked 32% to $171.6 billion, compared with the year-ago period, according to Adobe Analytics. The massive challenges of shipping COVID-19 vaccines in the weeks and months ahead could put further pressure on the system.

That means shoppers who return items may not get refunds until two weeks after they're sent back to the store, said Sara Skirboll, shopping expert at deals site RetailMeNot.

Many companies are offering more locations where customers can drop off returns, which cuts down shipping costs and gets refunds to shoppers more quickly.

Last year, Kohl's began allowing Amazon returns at all of its 1,000 stores — customers drop off items for free, with no box or label needed. This year, Amazon customers can also return items at 500 Whole Foods Market stores. That's in addition to Amazon's deal with UPS to allow similar drop-offs at UPS stores.

Happy Returns, a Santa Monica, California-based startup that works with about 150 online retailers like Rothy's and Revolve, has increased its number of drop-off locations to 2,600, from more than 700 last year. That includes 2,000 FedEx locations.

"It's a great time to be in the returns business. Every day, there's a record," said David Sobie, CEO and co-founder of Happy Returns, noting he's processed 50% more returns in December than November.

Walmart, the nation's largest retailer, announced earlier this week it will pick up items shipped and sold by Walmart.com from customers' homes for free through a new partnership with FedEx. The service will continue beyond the holiday shopping season.

A growing number of retailers are asking shoppers to not even bother sending back certain rejected items.

When Dick Pirozzolo wanted to return a too-small jersey he bought for $40 on a website called Online Cycling Gear, he was pleasantly surprised with the response. The site told him to keep it, discard it, or give it to a friend or charity — and it will send him the right size for an extra $10.

"I was fine with that," said the 77-year-old cycling enthusiast from Wellesley, Massachusetts. "I did a good thing for a friend, and I got a new shirt." The experience, he says, has given him confidence to buy more online this holiday season.

David Bassuk, global co-leader of AlixPartners' retail practice, says stores are increasingly making it easier for shoppers to feel less guilty about returning items.

"If they're not sure of their size, they order both sizes," he says. "If they're not sure which color, they order both colors. And if they're not sure which item, they order them all. But it's costly to the retailers, and the retailers are not well positioned to handle all the cost."

On average, people return 25% of items they buy online, compared with only 8% of what they buy in stores, according to Forrester Research's online analyst Sucharita Mulpuru. For clothing it's even higher, about 30%.

But not all rejected items are the same and have varying levels of depreciation, experts say. After an item is sent back to the retailer, the company must assess its condition and decide whether to resell it, send it to a liquidator or the landfill.

Optoro, a return logistics company, estimates the value of fashion apparel depreciates by 20% to 50% over an eight-to-16-week period. That's why it's so critical to get rejected items back and on sale again quickly.

Returns are also complicated this year because retailers pushed people to buy holiday gifts early to avoid shipping delays and crowded stores, meaning the return window may be closed by the time Christmas rolls around.

Amazon is allowing customers to return items until Jan. 31 for items shipped between Oct. 1 and Dec. 31, giving customers more time to decide. Last year, the policy didn't include items shipped in October.

Rachel Sakelaris, 25, of Newport Beach, California, bought her boyfriend a waterproof backpack on Black Friday, then realized there was a 30-day return policy. She decided to move up the gift exchange to last weekend so he had time to return if he didn't like it.

Buying too early can come with other hazards.

Sarah Huffman, 40, of Chesapeake, Virginia, wanted to get a jump start on the holiday season and spent $600 on Amazon on gifts, including a $60 pair of pajamas and a $90 Xbox game for her five children, in May.

But then her husband, a disabled veteran, quit his job because he felt his boss was too lax with COVD-19 safety protocols. Now, her family is struggling to put food on the table, and she can't return some of the gifts she bought because the return window has lapsed.

"I was trying to take away the stress of the pandemic by buying early," she said. "I didn't realize that basic life choices would find a new low."

Despite a sharp fall in global trade in 2020 due to the coronavirus pandemic and lingering trade tensions, Asia and the Pacific is expected to perform relatively “less bad” than the rest of the world, the United Nations development arm in the region said on Tuesday.

Worldwide trade is expected to fall by 14.5 per cent in 2020 and following that trend, trade in the region could contract by 1.9 percent, estimates from the UN Economic and Social Commission for Asia and the Pacific (ESCAP) suggest, UN News reports.

Also read: ASEAN, China, other partners set world’s biggest trade pact

The rest of the world, however, fared worse, and as a result Asia-Pacific’s share in global merchandise export and import is expected to rise to an all-time high in 2020, to 41.8 percent and 38.2 percent respectively, up from 39.9 percent and 36.9 percent a year earlier. 

Resilience is key 

The UN body also cautioned that the path towards a full trade recovery remains “highly uncertain”, with unfavourable macroeconomic conditions in many economies along with high unemployment, debt and deflation, and underlying structural challenges impeding rebound. 

Also read: COVID-19 drives large international trade declines

Smaller economies face additional obstacles due to the pandemic’s impact on travel and tourism, and remittances.  

According to Armida Salsiah Alisjahbana, Executive Secretary of ESCAP, COVID-19’s “devastating effect” on both developed and developing economies also risks pushing millions back into poverty. 

“I urge countries in the region to work towards developing a better set of trade rules that are resilient in times of crisis and stimulate sustainable economic recovery for inclusive and greener economies.” 

Investments also hit 

Also read: UNCTAD projects 7-9 pc year-on-year drop in 2020 global trade

Alongside trade, foreign direct investment (FDI) also saw “immediate and significant” impacts of the global crisis. 

“While data is still being collected on all forms of FDI, quarterly figures from announced ‘greenfield’ investments clearly demonstrate how hard the region has been hit,” ESCAP said, referring to investments into projects starting from scratch. 

In the first three quarters of 2020, “greenfield” FDI dropped by 40 per cent compared to the same period in 2019, depressed primarily by the impact of lockdowns resulting in delayed and canceled projects. 

Also read: Explainer: Several things you need to know about the RCEP

ESCAP added that FDI is expected to remain below pre-crisis levels throughout 2021, with the future outlook “highly uncertain” and dependent on the duration of the crisis, the effectiveness of policies to stimulate investments, and recovery from socio-economic effects of the pandemic. 

The trade updates are an annual ESCAP publication to support countries develop short-to-medium term plans to respond to emerging risks and uncertainties in the global and regional economies. 

Established in 1947, ESCAP is the largest of the UN’s five regional commissions – both in terms of geographic coverage and population served – its membership spanning from the Pacific island nation of Kiribati in the east, to Turkey in the west, and Russia in the north, to New Zealand in the south. 

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