In March 2015, Building and Wood Worker's International (BWI) filed a Policy for Association complaint to FSC International alleging that Sabah Forest Industries (SFI), a Malaysian subsidiary of Ballarpur Industries Limited (BILT), refuses to recognize the union appointed by SFI workers. BWI cited a violation of the principles of two of the International Labour Organization's Core Conventions: Freedom of Association (Convention No. 87), and Collective Bargaining (Convention No. 98).
After establishing a complaints panel to evaluate the complaint, it was found that BILT was in fact in violation of the two ILO Core Conventions, and as a result the FSC Board of Directors agreed to disassociate from BILT in July of 2016.
FSC concludes that Bilt Graphic Paper Products Limited (BGPPL) is no longer within the scope of FSC’s dissociation from Ballarpur Industries Limited (BILT) due to a corporate restructuring. Hence BGPPL is now eligible to seek FSC certification.
At the time of BILT's disassociation from FSC, BGPPL shared a common owner with Sabah Forest Industries (SFI) and was thus part of the scope of disassociation. However, BGPPL did not have ownership interest or shareholder interest in SFI.
BILT and its corporate group members, including SFI continue to remain disassociated.
FSC Board of Directors takes the final decision to disassociate from BILT after the company does not submit required documents and progress reports, showing their unwillingness to comply with the Policy for Association.
FSC Board of Directors discusses the recommendation by the complaints panel and decides to require that SFI and BILT submit an action plan and progress report on recommended corrective measures as listed by the complaints panel within a 2 month timeframe.
Complaints panel established and evaluation begins.
Building and Wood Worker's International (BWI) files a Policy for Association complaint to FSC International alleging that Sabah Forest Industries (SFI), a Malaysian subsidiary of BILT, refuses to recognize the union appointed by SFI workers thus violating a Core Convention of the International Labor Organization (ILO).
Frequently Asked Questions (FAQs) About the Case
How was BILT involved in the violation of the principles of the International Labour Organization’s (ILO) Core Conventions as defined in the ILO Declaration on Fundamental Principles and Rights at Work?
The complaints panel found clear and convincing evidence that Sabah Forest Industries (SFI) failed to respect the ILO fundamental principles and rights at work outlined in the ILO Core Conventions, as SFI refused to recognize and engage in collective bargaining with a workers’ union appointed by SFI workers.
Specifically, SFI has denied union recognition by using legal and judicial instruments to block and delay the recognition. The complaints panel found that Ballarpur Industries Limited (BILT) is the parent company of Bilt Graphic Paper Products Limited (BGPPL) and SFI. BILT exercised a significant level of authority and control on all matters relating to unions and workers at its subsidiary, SFI. This significant level of authority makes BILT directly involved in the violation of the FSC Policy for Association.
Did the complaints panel consider other issues related to workers’ rights?
The complaints panel focused its evaluation on issues related to freedom of association, but considered other issues, such as health and safety, the situation of migrant workers, overtime and the payment of wages.
The Complaints Panel Evaluation Report provides evidence of health and safety issues identified in both operations managed by Sabah Forest Industries (SFI) and operations managed by SFI’s contractors.
What were the main impacts of the unacceptable activity BILT was involved in?
The complaints panel found that the impacts of failing to recognize a workers’ union of the Sabah Forest Industries (SFI) workers’ free choice were significant.
The union was unable to negotiate a collective bargaining agreement with SFI, which could have resulted in better working conditions for the workers.
Did the unacceptable activities BILT was involved in take place in FSC-certified forest operations?
Yes. The unacceptable activities took place at Sabah Forest Industries (SFI), a subsidiary of Ballarpur Industries Limited (BILT) in Sabah, Malaysia, which held an FSC chain of custody certificate.