Indications of Forced Labor Amid Rapid Exports and Abundant Profits in Sustainable Palm Oil Plantations

27 Dec Indications of Forced Labor Amid Rapid Exports and Abundant Profits in Sustainable Palm Oil Plantations

Indonesia is the largest and widest country with palm oil plantations in the world, with an area of ​​18 million hectares. Notes from Gabungan Pengusaha Kelapa Sawit (GAPKI) crude palm oil (CPO) production in 2023 reached 50.7 million tons, an increase of 7.15% from 2022 which was 46.73 million tons. In the same year, there was also a decrease in exports to Europe by 11.6%, while 4 other export countries experienced an increase including exports to the United States with an increase of 10%.

Table 1. Exports in 2023

Source: Gapki. (2024). Palm Oil Industry Performance in 2023 and Prospects in 2024. Taken from https://gapki.id/news/2024/02/27/kinerja-industri-minyak-sawit-tahun-2023-prospek-tahun-2024/

The Central Statistics Agency (BPS) noted that the 5 largest CPO export destination countries are India, Kenya, Malaysia, Italy and the Netherlands. Total exports to these 5 countries are 97.64% of Indonesia’s total CPO exports.

The large CPO exports in 2023 are certainly good news for domestic and foreign palm oil plantation investors, although estimates in 2024 there will be a decline of around 4%. The high exports provide an increase in the income of plantation companies and palm oil processing companies. The same question remains, is the increase in exports and company income directly proportional to the fulfillment of labor rights and the welfare of palm oil plantation workers?

Forgotten Obligations, Workers’ Rights Are Also Ignored

The large exports and income of companies and the government from export taxes are certainly worthy of appreciation. However, the euphoria of the large income does not mean that it is free from problems. It is no secret that problems such as the low profit sharing of plasma companies obtained by plasma partners of companies in West Kalimantan, deforestation, forest and land fires, land conflicts between communities and palm oil plantation companies, both indigenous/local community land and transmigration land and what is sad is that the rights of palm oil plantation workers/laborers have not been fulfilled, and are still far from prosperous.

The problems above should be of concern to the government and company owners, because they have been stipulated in Law Number 25 of 2007 concerning Investment, which states that companies or investors are responsible and obliged to preserve the environment, create safety, occupational health, comfort and welfare for laborers/workers, comply with all laws and regulations, respect the culture and traditions of the community around the investment. The obligation of companies/investors in Law 25 of 2007 is to create safety, health and welfare for workers in line with International Labour Organization (ILO) standards.

Table II. International Labor Organization (ILO) standards

Unfortunately, there are still several palm oil plantation companies in West Kalimantan that have not carried out their obligations optimally, and there are even indications that several companies are carrying out forced labor. The ILO has compiled 11 indicators of forced labor, abuse of vulnerability, fraud, restriction of movement, isolation, physical and sexual violence, intimidation and threats, storage of identity documents, wage deductions, debt bondage, inadequate working and living conditions. For local workers or those from communities around plantation concessions, they usually experience fraud, intimidation and threats and wage deductions. Discussions conducted by the Teraju Indonesia team in several palm oil plantation companies, where 11 indicators of forced labor were experienced by workers brought in from outside the district or province such as fraud, restriction of movement, intimidation and threats, storage of identity documents, wage deductions, debt bondage, inadequate working and living conditions.

From interviews and assessments in 5 palm oil plantation companies, we try to share some findings that have not been fulfilled the rights of laborers/workers in palm oil plantation companies. 5 companies are members of RSPO, suppliers of RSPO members and have ISPO certification.

Table III. Problem Finding

Note: Company name intentionally left out

Referring to the laws and regulations related to the prohibition of forced labor, Law Number 19 of 1999 is a law that ratifies the ILO Convention Number 105 concerning the Abolition of Forced Labor. Then the prohibition of forced labor is also stated in the 1945 Constitution Article 27 Paragraph (2) stating that every Indonesian citizen has the right to work and a decent living for humanity, the prohibition of forced labor is also regulated in the Manpower Law Number 13 of 2003. Law on Freedom of Association Number 21 of 2000, Law on Investment Number 25 of 2007, and other laws and regulations related to palm oil plantations and employment. From the table above, it can be suspected that several palm oil plantation companies have violated civil and criminal laws, including forced labor. And it is very ironic that in modern times forced labor still occurs in the palm oil plantation sector, where the government has prepared and implemented a Sustainable Palm Oil Plantation Action Plan.

It is clear that there are laws, regulations and policies made by palm oil plantation companies in every sustainable document they issue. But unfortunately, practices suspected of forced labor are still ongoing. The Health and Safety of Workers is not a serious concern for the company.

The funny thing is that the company management told the workers when asked why the workers were not given Personal Protective Equipment (PPE), the management lightly answered that there had been no ISPO audit and buyers, and our ISPO certification had not been issued so it was not urgent to provide PPE. Discrimination in housing facilities between field workers and assistant and foreman level workers also occurred. Assistants and above from the physical building of the house to the availability of clean water facilities, what’s more related to other facilities, such as leave, wages and work tool facilities will be treated differently. Now what’s worse is when workers still have the status of Casual Daily Laborers (BHL) especially Contract workers, they will not get any facilities including PPE and health insurance, When a work accident occurs, it becomes the responsibility of the worker. Work vehicle facilities, Workers use their own equipment and when damage occurs, it becomes the responsibility of the worker.

Doc. Teraju 2024: Contract Workers Who Work Without Being Given PPE (RSPO Member Supplier, ISPO Certification).

Confession of a Worker/Laborer
A female worker who works as a porter for her husband, one of the palm oil plantation companies in Sanggau Regency, an RSPO supplier

I have been working to help my husband since 2018 (6 years), sometimes picking oil palm bunches, sometimes arranging fronds, sometimes lifting and carrying oil palm fruit (FFB) to the arco. During my work, I was not paid/given a salary by the company. So I was paid by my husband. My husband works a lot, besides harvesting, he also arranges fronds, prunes, and cleans the garden. My husband explained that the total work area can be 7 to 8 areas with the size of one area usually consisting of 1 hectare to 2 hectares. My husband’s wages are based on the tonnage of the oil palm fruit harvest, so the loose fruit (fallen oil palm fruit) is combined with the FFB harvested by my father. The work of cleaning the oil palm tree plates once a month is not necessarily there, because it depends on the assessment of the plantation supervisor when it will be cleaned. We start work at 7 and end if the harvest target has been achieved, if it is not achieved then we look for oil palm trees with ripe fruit. There is a season when the fruit “tracks” then the work will not reach the tonnage target, so wages are sometimes proportional. If that happens, sometimes it doesn’t count as Daily Work. If you work more than 7 hours, it doesn’t count as overtime. Bonus, the one who gets it is the supervisor or foreman, because it is considered that those who reach the production target or exceed the production target from the harvest, we the harvesters only get the tiredness.

Stories from casual daily workers

We are casual laborers, the wages are a lump sum model, we are not given helmets, glasses and gloves. We also have our own work tools so if they are damaged we are responsible for them ourselves. We do not have BPJS Health, if we are sick we have to pay for our own treatment. The work is pruning, cutting fronds, after cutting them we arrange the fronds. In 1 working day we can do 1 hectare or more. Thankfully during my work I have never experienced a disaster, such as getting oil palm dust in my eyes or being hit by fronds. Hopefully that will not happen, because we will bear the medical expenses ourselves if a work accident occurs. I don’t know how to apply for a job at a company, but I have been working for this company for quite a long time in the pruning section of oil palm fronds.

Efforts Made to Fulfill Labor/Worker Rights

Efforts to improve labor conditions and fulfill labor rights have not been fully followed by the 5 sample companies (not RSPO members) that were assessed. The companies assessed are suppliers of RSPO member companies. It is also worth noting that among the 5 companies, it is suspected that they have obtained ISPO Certification. The hard work that must be done by the central and regional governments to implement and enforce laws and regulations and the ideals of realizing sustainable palm oil plantations and fulfilling the SDGs achievements should be a serious concern and truly practiced. So that exploitation of laborers/workers leading to forced labor does not occur.

Advocacy to raise awareness of companies that have not fulfilled labor rights must be carried out continuously. We convey the initial data from our field findings to the government in this case the Provincial Manpower and Transmigration Office and to Gabungan Pengusaha Kelapa Sawit of West Kalimantan (GAPKI) directly by holding a meeting with the GAPKI Management. GAPKI conveyed to its members to make improvements and fulfill labor rights, so that sustainable palm oil plantations can be fulfilled. Advocacy conducted to non-RSPO companies and RSPO members, at least there are several companies that have tried to gradually improve labor conditions and fulfill labor/worker rights. We try to rank 3 RSPO member companies that have gradually made improvements to fulfill labor rights.

Table IV. Improvement of Labor Conditions of RSPO Members

The improvements made by the company are inseparable from the role of labor unions/workers in conducting social dialogue and productive actions. Then the open mind of the company management is important to fulfill the rights of laborers/workers as part of a joint effort towards sustainable palm oil plantations and implementing applicable laws and regulations. Concrete examples of 3 RSPO member companies show the company’s commitment to RSPO policies and international market policies, although not 100% of the fulfillment of labor rights has been fulfilled. For non-RSPO companies, many still do not care about improving labor conditions and fulfilling the rights of plantation workers, and there are still RSPO members who have not implemented policies, sustainable commitments and Human Rights and Business policies.

Doc. Teraju 2024: Condition of RSPO member company plantation roads that are prone to work accidents

This is due to weak monitoring, evaluation, and auditing. It is only limited to fulfilling certification and buyer recognition. Then, weak supervision and sanctions are given by the government to companies that do not fulfill labor/worker rights. What is worrying is that the banking sector seems indifferent to the conditions of labor/workers in palm oil plantation companies. All of which have been regulated in laws and regulations and it is the company’s obligation to comply with them and it is the government’s obligation to supervise, provide guidance and impose sanctions on companies that violate laws and regulations.

Realizing sustainable palm oil plantations in Indonesia has ratified the ILO Convention 105 into Law Number 19 of 1999, giving birth to Law Number 39 of 1999 on Human Rights, Law Number 21 of 2000 concerning Labor/Worker Unions, Law Number 13 of 2003 concerning Manpower and other regulations related to employment/labor. The Indonesian government is also fully committed to efforts to realize sustainable development and achieve the SDGs. Not only the government, palm oil plantation companies are also committed to achieving SDGs and implementing and/or practicing Human Rights and Business in their businesses. This commitment is not just an image, but the most important thing is its implementation.

Collaborative work needs to be done between governments, CSOs/CSOs, local, regional, national and international workers/laborers involving companies, buyers and also banks and most importantly involving labor unions, federations and confederations. Collaborative work is important so that coordination, consolidation and verification of findings and improvements can be carried out together. This is also to reduce conflicts in the field. Collaborative work can be a place to increase the capacity of each organization. In addition, the central and regional governments can formulate and issue sectoral regulations on the protection and fulfillment of the rights of sustainable palm oil plantation workers. With the existence of regulations in the form of laws, regional regulations and their derivatives. Sectoral laws on the protection and fulfillment of labor rights are very urgent to be issued by the government. Because the law shows the government’s seriousness to the international community to realize sustainable palm oil plantations and meet the SDGs achievements.

Conclusion

High exports and high corporate income and export taxes obtained by the government do not correlate with improvements in conditions and fulfillment of the rights of palm oil plantation workers. Unclear wage schemes, uncontrolled and unsupervised use of chemicals, worker health checks, deducted wages, unclear work status, unfulfilled occupational health and safety and others.
Exploitation of palm oil plantation workers continues to occur leading to forced labor, which is unfortunate because there is no strong supervision of companies from the central level to the district government. So it seems that there is neglect of the problems of palm oil plantation workers.
There are still very few companies that implement the ILO convention that has been ratified by the Indonesian government with the issuance of Law Number 19 of 1999. RSPO Member Companies have tried to make improvements and fulfillment of labor rights, even though they have to be pressured. Meanwhile, non-RSPO companies, both domestic and foreign companies, are still reluctant to make improvements. Improvements will be made if there is an audit for ISPO certification and the audit is carried out by the Buyer. However, there are also quite a few RSPO member companies that neglect to fulfill their workers’ rights.
Weak law enforcement against companies that violate laws and regulations causes exploitation of workers to continue. In addition, existing laws favor palm oil plantation companies rather than workers.

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