Palm oil giants unite to tackle human rights challenges in Indonesia

Major companies are stepping up to address human rights issues in their supply chains. Forum for the Future’s latest collaborative effort is a palm oil industry-first in addressing problems surrounding temporary work and gender equality in Southeast Asia’s biggest palm oil exporter.

Until a few years ago, human rights issues in the palm oil industry have received scant media attention, despite the fact that the sector depends on low-wage, back-breaking work to produce one of the world’s major commodities.

In Indonesia, more than 8 million people are employed in the sector, with many more unaccounted for due to a longstanding system of contractual or casual labour. 

In 2016, multiple advocacy campaigns and reports by non-profit organisations exposed human rights issues on palm oil plantations in Indonesia, which included job insecurity for casual workers, unethically low wages, poor health and safety conditions and cases of forced and child labour.

Women have also been reported to be disproportionately affected by workers’ rights violations, as they typically make up the invisible workforce that help carry out maintenance work on the farms or help palm oil harvesters meet large quotas. 

In a major collaborative effort to address persistent labour rights issues in Indonesia’s palm oil sector, five industry giants have jointly announced two new pilot projects that seek to change practices around casual labour and improve conditions for women workers.

The Decent Rural Living Initiative (DRLI), convened by international sustainability non-profit Forum for the Future, brings together palm oil companies Cargill, Musim Mas, Sime Darby Plantation, Wilmar and Golden Agri-Resources, whose concessions span thousands of hectares of land in Indonesia and employ a significant portion of the 5.7 million people that work in the country’s palm oil industry.

Discussions around the initiative began early last year, said the managing director at Forum for the Future Asia Pacific, Ariel Muller, when DRLI partners consulted organisations within Indonesia and brainstormed areas where collaboration among the industry’s leading growers would create the most meaningful impact.  

“With a commitment to addressing root causes, harnessing rural workers’ potential as agents of change and sharing lessons learned across the value chain, these companies have the potential to fundamentally transform the industry,” said Muller.

Perpetua George, general manager of group sustainability at Wilmar, said in an interview with Eco-Business: “This is an effort to work collectively to find practical solutions to some of our common challenges and bring what we have achieved from our own small projects to a wider scale. Hopefully this can cascade to the rest of the DRLI members and with the wider industry.”

Under the DRLI, Wilmar and Sime Darby will be addressing challenges facing casual workers—called pekerja harian lepas in Indonesia—and focus on developing contracts that minimise the uncertainty of casual and flexible work.

Multiple reports on human rights abuses in the palm oil industry have exposed the precarious working conditions of workers who carry out informal jobs in the sector, such as picking up loose palm fruit kernels and transporting fruit bunches to collection points.

According to research, these casual workers, who tend to be women, lack the benefits and financial security that typically accompanies permanent work.  A 2017 probe into the human costs of palm oil stated that although palm oil expansion in Indonesia has often been supported with claims of poverty reduction and job creation, “the trend has been toward poor quality jobs and more casual positions, for which women are disproportionately hired.”

Improving the quality of life for women and casual workers

The DRLI’s first pilot project involving Wilmar and Sime Darby addresses casual labour and will launch in West Kalimantan, which is unique from older, developed areas in Indonesia that traditionally grow palm oil on large chunks of land.

In West Kalimantan, smaller palm oil plantations are developed on existing community farmland and the workforce is mainly made up of farmers who juggle several jobs, including their own fishing or farming business. As such, most workers carry out casual work by choice, given the flexibility afforded by temporary labour.

“The solution in West Kalimantan for example, is not making these casual positions permanent but making sure the overall quality of life, for both permanent and temporary workers is better,” said George. “For those who want to maintain their temporary status, how can we improve contract conditions and have a standard template of collective agreement that specifically covers the temporary worker scenario?”

The second pilot project aims to improve gender equality in the palm oil industry by enhancing the role of gender committees on palm oil estates.

How can we improve contract conditions and have a standard template of collective agreement that specifically covers the temporary worker scenario?

Perpetua George, general manager of group sustainability, Wilmar

Said Anita Neville, senior vice president of group corporate communications and sustainability relations at Golden Agri Resources:  “We recognise the importance of the role of women in rural agriculture—especially as agents to help address the challenges agriculture faces. To help them realise their change agent potential we need to create safer, more inclusive workplaces.”

According to Muller, the proposed gender committee will not only address grievances related to sexual harassment and other health and safety issues, but also serve as a platform to empower women and place them at the centre of the company’s sustainability efforts.

“A gender committee hopes to go beyond being a grievance mechanism, and will go further to include empowerment programmes that strengthen women’s talent and leadership in the sector,” she said.

The global palm oil industry has long been male-dominated, with a low percentage of women heading plantations or taking up managerial positions in the industry. 

A concerted effort on human rights 

On why it has taken longer for palm oil’s biggest players to act together on human rights, George said that key labour issues have been a work-in-progress by individual companies for a long time, although the human cost of palm oil has gained media attention only recently.

“While environmental issues such as deforestation can be more easily identified via technology, labour issues deal with people and are thus not so straightforward. Although we are now focusing on casual workers and women, it is important to go beyond this first phase and address other issues in this collaborative manner,” said George, whose company also launched a programme this week with major palm oil buyers such as Nestlé and PepsiCo to protect the rights of children in palm oil plantations. 

“For many of us it’s been 10 years of working on human rights individually, and what has prevented us from coming together is perhaps the need to first look at individual performance,” she said.

George believes that a collective approach to tackling the human rights challenges in palm oil will help scale up innovative solutions and make them easily digestible for the wider industry, which includes suppliers and other smaller players. 

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