Practices

Our topic is regarding about ethical and corporate social responsibility (CSR). Some
companies believe that they have a responsibility to take care the society which supports
them and that CSR activity able to improve their organization performance. Felda Global
Ventures Holding Berhad are totally believe in this principles and their objectives in CSR are
to help the internal and external stakeholders and preserve the environment.
From their annual report, we found that there are several CSR and ethical practices that
adopted by the Felda Global Ventures holding Berhad. One of the CSR practices they
implemented is FGV donates RM22.78 millions to Yayasan Felda which is Felda Groups
foundation. Yayasan Felda normally established health and education programmes for their
employees and other underprivileged communities. Yayasan Felda runs four vocational
colleges which are located in Selangor, Perak, Negeri Sembilan and Pahang and those
colleges offer more than 15 certificates and diploma level courses which are recognised by
City & Guilds, a certication organization in United Kingdom. In order to help the
underprivileged Malaysians in education aspect, FGV always provide aid for them.

Problem
Refer to the contents above, FGV have done several CSR and ethical practices. However,
they do have CSR and unethical practices as well. Since FGV is a listed public company and
they do have many businesses such as palm upstream, rubber, palm downstream, sugar and so
on, they needed to outsource some of the minor business operation to the outside contractors
to assist the company. From our searching, we found that the contractors which FVG is
affiliated with are taking advantages of the workers.
Most of the contractors of FGV will hire foreign workers from Nepal, Bangladesh, India and
etc to work in the agriculture site. When the foreign workers arrived in Malaysia, the
contactors will take over their passports as a method of leveraging authority over them
because the contractors afraid that the foreign workers will run away after receiving their
salaries. This is an unethical way because the contractors leaving the workers undocumented.
Besides that, according to the report, those employees are transferred to camps which located
in rainforest. The living condition where they are given is filthy and they only live in

cramped huts. The reason they separated the employees in rainforest is avoid the employees
to purchase goods from the shops. The contractors wanted the employees purchase goods
such as food and dairy products from them inside their camp. The price of the goods is
exaggerated so the contractors could put the employees in high debt and incurred more
authorities to the employees. This unfairness action is not reported to the police and endured
by the employees because of their fear.
There are several reasons why these issues occurred. One of the reasons is lack of ongoing
monitoring and controlling provided by FGV to the contractors. Next, the FGV Company
give too many authorities to the contractors. The contractors may behave as what they like as
long as they complete the job task that outsourcing by their client. Another reason is the FGV
manufacturing, logistics and other department (MLO) did not listed well the terms and
conditions in the contract. For example, MLO department may not mention the criteria of
code of ethics inside the contract.
Recommendations
In order to stop the contractor taking advantages of the workers, FGV must initiated
contractor security screening process within the company. This process not only can control
the contractors but also reducing possible legal dispute risk and protect the company
reputation. The screening process usually divided into 3 basis components which are
background checking, training, and ongoing monitoring and controlling.
Background checking are serve as the basis of a contractor screening program and it is used
to evaluate and reveal the contractors background. Corporate Security Officer (CSO) should
apply Criminal background screening solutions before has an agreement with the contractor.
Through the criminal record sources, we are able to know the list of criminal company and
their illegal activities done by them. These sources avoid FGV Company from financial and
security risks which are related to unsafe working environment.
Training is act as the safety component of contractors screening program. Most of you will
think that training sound like consume a lot of time and it kind of long term program.
However, you are wrong. Training could be short term program too. For example, FGV can
provide contractor orientation, HR orientation, corporate and compliance presentation which
only take 1 or 2 days duration. These types of training programs will maintain a well-trained
contractor base.

Next, we suggest that FGV should appoint its internal managers to monitor and control the
contractors operation activity on timely basis. The managers have to check whether the
contractors put their written procedures into practice or not by onsite supervision. If the
contractors perform unethically or not operating safely, then FGV Company must take
appropriate action to solve the issue.