KUALA LUMPUR (Reuters) -- Non-profit Shift said it has left Sime Darby Plantation's new human rights commission after the Malaysian palm oil giant sued an activist, potentially dealing a blow to its fight against a U.S. import ban over forced labor accusations.
An activist said he is also considering leaving the two-week-old panel after the world's largest sustainable palm oil producer sued Liberty Shared managing director Duncan Jepson, in connection with claims of worker abuse.
Kuala Lumpur-based Sime Darby did not immediately respond to requests for comment.
The United States in December banned the company's palm imports over accusations it uses forced labor in production, prompting some global palm oil buyers to drop it from their supply chains.
Palm oil is one of the world's cheapest and fastest-growing crops, but the industry has faced scrutiny over the years, with rights groups blaming producers for vast deforestation in Southeast Asia and exploitative labor practices.
Sime Darby formed the rights panel on March 1 but on Thursday it said it has begun U.S. legal action against Jepson, who heads Hong Kong-based anti-trafficking group Liberty Shared, seeking information about his complaint to Malaysia's Securities Commission.
The complaint has led to an investigation into the company's sustainability disclosures. Liberty Shared successfully petitioned the U.S. Customs and Border Protection last year to ban Sime Darby products, citing evidence of labor abuse.
The border service told Reuters by email it was its policy to decline comment on pending litigation.
"Following the events of the last few days, we have regrettably decided to withdraw from the company's Expert Stakeholder Human Rights Assessment Commission," Francis West, business engagement director at U.S.-based Shift, told Reuters on Friday.
Shift works with companies to implement the United Nations Guiding Principles on Business and Human Rights.
Another member of the commission, prominent migrant-rights activist Andy Hall, is considering doing the same if Sime Darby persists with the litigation.
"I am deeply concerned on the impact of this ongoing litigation against a human rights activist on the possibility for the human rights commission to function effectively according to its goals, and to conduct its work objectively and respectably," Hall told Reuters on Saturday.
He said the commission was helpful for improving the protection and welfare of Sime Darby's workers but that the lawsuit undermined their work.
"I may have to resign if Sime Darby decides to continue with it," Hall said, adding that there were concerns the lawsuit would stifle whistleblowers.