- Widespread labor abuses have been documented in five oil palm plantations in Indonesia, ranging from exposure to hazardous chemicals, a reliance on temporary workers, below minimum-wage payments, to the suppression of independent unions.
- These plantations are in theory supposed to be role models for the industry, with RSPO sustainability certification and buyers that include the likes of food giant Nestlé.
- Labor rights activists say these companies and their agribusiness parent groups and buyers must follow up on the findings and take meaningful action to clean up the industry.
JAKARTA — A coalition of NGOs has documented rampant labor abuses in five oil palm plantations in Indonesia, the world’s biggest producer and exporter of the commodity. The palm oil from these plantations is certified by the Roundtable on Sustainable Palm Oil (RSPO) and ends up in products made by food giant Nestlé.
Among the labor abuses documented by the group Transnational Palm Oil Labour Solidarity (TPOLS) are exposure to hazardous chemicals, a reliance on temporary workers, below minimum-wage payments, lack of maternity and menstrual leave for female workers, and the suppression of independent unions.
In the concession run by PT Agro Kati Lama, an Indonesian subsidiary of Belgian agribusiness group SIPEF, Endang, a 35-year-old worker, has been getting paid a monthly wage of 1.4 million rupiah ($100) for years. The minimum wage for Musi Rawas district on the island of Sumatra, where the plantation is located, is 3.2 million rupiah ($227).
“The most I got was 1.6 million rupiah ($114),” she said. “But that’s very rare. Usually I get 1.4 million rupiah.”
The coalition said this is a widespread problem in the plantation sector in Indonesia.
One of the factors for this is the use of a remuneration system called piece-rate pay, in which workers are paid for their productivity rather than their time.
“So they’re getting paid based on how many tons of oil palm fruit bunches they harvest, how many sacks of oil palm seeds they collect, how many hectares they spray with pesticides, and how many plantations they spray with fertilizers,” Rizal Assalam, the coordinator of TPOLS, said during a recent online discussion.
As a result, the laborers have to work extra hard to achieve their targets and make ends meet. In some cases, they’re compelled to ask for help from family members, including their children, to work with them in the plantations.
TPOLS identified cases of child labor in concessions of two of the five companies it looked at: PT Kutai Agro Lestari and PT Jaya Mandiri Sukses, both in the Indonesian part of the island of Borneo.
According to the coalition, both companies denied allegations that they hired children to work in their plantations. However, the coalition said the definition of a child worker isn’t limited to those recruited formally by companies. Children who have to help their parents working in plantations due to the Unrealistic targets set by companies and the piece-rate pay system also fit the definition of child labor, the coalition added.
Some workers at PT Agro Kati Lama were also denied holiday bonuses from the company even after having worked there for several years, according to Robiyansih from the Prosperous Palm Oil Labor Union (SBSS). The holiday bonus is mandatory under Indonesian labor law, equivalent to a month’s salary for workers who have been employed at a company for at least a year.
“From 2012 to 2018, [PT Agro Kati Lama] didn’t pay holiday bonuses to their workers,” Robiyansih said. “Except for 2019, when they paid only 90% of the bonuses, because they perceive those working for the company as not their responsibility.”
He added this is because these workers are outsourced from a third-party company on a contract basis, or are casual daily workers with no formal contract, a common practice in the plantation industry.
Endang, for instance, has worked as a maintenance worker at PT Agro Kati Lama for years, but is still not formally employed by the company. Instead, she’s considered an outsourced laborer.
“There are around 1,200 casual daily workers in PT Agro Kati Lama,” Robiyansih said. “They have worked for six to seven years, but their status is still casual daily workers.”
Health rights denied
Besides problems with their wages, the workers have also had their basic health rights denied.
During crop-fertilizing season, casual daily workers, who do not have written contracts, must spray at least 500 kilograms (1,100 pounds) of fertilizer every day. Astuti, a 45-year-old who works as a fertilizer sprayer at one of the five companies, said the work has harmed her health.
“If the particles get into my eyes and hands, it burns badly,” she said. “I can feel the burn in my eyes for two days because of the irritation.”
Workers like Astuti have to inhale and touch toxic chemicals without adequate health and safety measures. These workers are usually only provided with regular cloth face masks once in a while. Many are compelled to buy proper protective gear with their own money.
The labor report documents cases like Astuti’s at four of the five companies: PT Jaya Mandiri Sukses, PT Suryabumi Tunggal Perkasa, PT Kutai Agro Lestari, and PT Agro Kati Lama.
When workers fall sick, many have to pay for their own medical bills. Indonesia has a universal health care system, known as the JKN, funded through deductions from workers’ monthly wages. For these token premiums, workers are entitled to free health care at public clinics and hospitals.
But many of the workers at PT Kutai Agro Lestari can’t use their JKN insurance, even though the company deducts the premium from their wages. The problem is that it doesn’t pay that money into the JKN, according to Stella Armanda Putri from the East Kalimantan provincial chapter of the National Workers Union (SPN). “So if they are sick, they have to pay out of their own pocket.”
The situation is worse for female workers, who work mostly as fertilizer and pesticide sprayers, and thus have to deal with toxic chemicals on a daily basis. In some of the companies, they reportedly aren’t entitled to maternity leave or menstrual leave.
The coalition’s report comes in the wake of a recent investigation by the Associated Press, which detailed abuses and rapes suffered by a number of women working in oil palm plantations in Sumatra.
One 16-year-old girl told the AP that she was raped multiple times and eventually impregnated by a supervisor, who she said is old enough to be her grandfather. Another woman, Ida, said she lost two of her babies in the third trimester as a result of lugging heavy loads of fertilizer several times her weight across acres of fields. She said she continued to work for $5 a day because she feared she would be fired if she told her supervisor about her pregnancies. With no health insurance, she was left with medical bills she couldn’t pay.
According to the AP investigative report, some women also had to undergo humiliating checks to prove they were bleeding in order to take leave during their period.
Bumpy road ahead
Labor rights activists say these workers’ plights will only get worse under a recently passed deregulation bill. The so-called omnibus law has been heavily criticized for slashing labor rights and environmental protections, prompting widespread protests across the country when parliament passed it in October.
Hotler Parsaoran, from palm oil industry watchdog Sawit Watch, said the law would harm many workers, both formal and informal, in the plantation sector. He said current fulltime employees of plantation companies might see their jobs outsourced to third parties, as the law facilitates outsourcing to allow companies to cut their labor-related costs.
The law also extends the maximum allowable unpaid overtime for workers, from 14 hours a week to 18 hours. Critics say this could potentially impact casual workers, who often have to work overtime to meet their targets.
Another practice that the law encourages and facilitates in the piece-rate pay system already commonly used in the plantation industry, according to Hotler.
“This law has the potential to cause the families of workers to work as well because of the remuneration system that is based on achieving a target, which a single laborer won’t be able to meet on their own,” he said. “They will have to get help from other people, and these people are usually family members, like their wives, who won’t get paid. The omnibus law will legitimize such bad practices.”
Samuel Gultom, a labor researcher and politics lecturer at the University of Indonesia, said the loosening of labor protections is dangerous because it can lead to the weakening of labor unions. Outsourced and contract laborers are much less likely to join a union, let alone actively participate in one, he said.
“If they are actively unionizing, then companies won’t hire them anymore, and this, of course, is very risky for people who can’t afford to lose their jobs,” Samuel said.
This in turn will lead to fewer union workers employed in the plantation sector. This is especially concerning because the number of unions in the industry is already small to begin with, Samuel added.
He cited a study done in West Kalimantan province that found that of 421 palm oil companies, only 130 had unions that were registered with the local department of labor. Of these, only 12 had cooperation guidelines or arrangements agreed on by both the companies and the unions.
These numbers are expected to go down due to the omnibus law, Samuel said.
“The stipulations that allows outsourcing and contract workers are really wild, in which any position can be contracted out, and will weaken unionizing,” he said. “The number [of unions] will surely decline, and their bargaining position will be weakened as well.”
Rizal of TPOLS said one way to improve the working and living conditions of palm oil laborers is by holding the companies and their owners and buyers more accountable.
According to the coalition, the five plantation companies studied for the report are subsidiaries of major agribusiness groups: First Resources, Eagle High Plantation, CT Agro Kaltim, SIPEF Group, and Golden Agri Resources.
“Even though the plantations reported by the coalition are owned by different companies, they all have similarities, which is that all are part of the global supply chain of the palm oil industry,” Rizal said.
All of these groups, except for CT Agro Kaltim, are members of the RSPO, the world’s leading palm oil sustainability certification scheme.
“It means that, ostensibly, they meet the standards and principles and criteria of the RSPO, including respecting labor rights,” Rizal said. “But after we traced [their compliance] down to the plantation level, there are a lot of violations that don’t reflect the RSPO membership status.”
The plantations in question also feed into the global supply chain. Multinational food giant Nestlé sources some of its palm oil from mills that buy palm fruit from these plantations. Nestlé’s own policy of “no deforestation, no peat, no exploitation” (NDPE) bars the company and its suppliers from sourcing palm oil from plantations that exploit workers.
“Nestlé is only one buyer that we’ve able to identified,” Rizal said. “We believe that it’s not only Nestlé which commits bad labor practices.”
The coalition has called on agribusiness groups and consumer brands linked to allegations of labor abuses in their supply chains to clean up.
“We demand group companies and buyers to improve working conditions, especially in the working status [of laborers],” Rizal said. “And then to independently verify [the allegations] without intimidating and manipulating the laborers and to publish their correction action plans on the allegations in a transparent manner, with measurable plans that can be monitored by the public.”
Simone Wasmann, a campaigner at Zurich-based NGO Solidar Suisse, said companies like Nestlé, which is headquartered in Switzerland, should go beyond their policies to effect meaningful change in the industry.
“There’s a lot of paper they [Nestlé] produce, a lot of analysis that [is] actually really looking at the right direction and then they actually state the problems, but they never actually show how they want to tackle those problems,” she said. “What they do is they have some pilot projects on [some] little thing, but they never have a plan on how to scale this up on a business level, to [bring] change in the whole palm oil industry.”
One thing companies like Nestlé can do is to support labor unions, Wasmann added.
“Nestlé doesn’t really do much on this issue,” she said. “They say, ‘oh, but we can’t create a union,’ which is true. But they can talk to the companies on the ground. They can make sure that there’s an environment where it’s possible to form a union.”
Samuel from the University of Indonesia said labor unions play a pivotal role in getting companies to act.
“Based on these findings, corporate greed can truly be beaten by concrete social power, not by an abstract regulation,” he said. “To date, the ones that can compete with the power of big corporations are labor unions. So if the unions are incapacitated and killed, we can predict that the practices that the coalition found will become more massive and intensive in the future.”
Banner image: A worker on an oil palm plantation on Indonesia’s main western island of Sumatra. Image by Rhett A. Butler/Mongabay.
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