Labor Abuses Common in Palm Oil Industry

Forced and child labor compound environmental problems

Palm oil is nearly everywhere. It’s in tortilla chips, a cheap way to add oil and maintain texture. It’s in shaving cream, helping it stay creamy. Palm oil is in soap, microwave meals, doughnuts, and cookies. The great panoply of processed goods that fill the center aisles in most American grocery stores are dominated by palm oil.

Palm oil plantationPhoto courtesy RANCrude palm oil tanker truck inside a plantation. The human rights abuses endemic to palm oil production are the industry’s best-kept secret.

And yet, to consumers, it’s all but invisible. Part of this invisibility may be due to the fact that there are no fewer than 200 different names for palm oil, from the esoteric sounding “palmolein” to the generic “vegetable oil.”

But palm oil has deeper secrets than misleading nomenclature. By now many people have heard about the environmental impacts of this ubiquitous food and cosmetic additive. “Palm Oil Is Killing the Sumatran Tiger,” TIME magazine trumpeted in a headline last year. “A Grim Portrait of Palm Oil Emissions,” The New York Times warned. Here’s how David Gilbert explained it in a 2012 story in Earth Island Journal: “Borneo’s lowland rainforests and peat swamp forests are nature’s densest stores of carbon, and when the trees are chopped down and burned or left to rot, or peat swamps drained and dried, the CO2 stored in them is released into the atmosphere. Even though Indonesia has relatively few factories, all of the forest clearing has pushed the country to the top of the list of the world’s contributors to climate change.”

Yet even as the environmental impacts of palm oil production gain attention, the social costs of the palm plantations remain largely hidden. The human rights abuses endemic to palm oil production are the industry’s best-kept secret.

Just two countries are responsible for 90 percent of the world’s palm oil production: Malaysia and Indonesia. In those places, children as young as 8 and 9 sometimes work seven days a week in treacherous conditions. Undocumented immigrants are lured to faraway plantations with promises of safe working conditions and fair wages, only to find a kind of indentured servitude. Weak government oversight — together with glaring deficiencies in the main independent body tasked with regulating the industry — contribute to an atmosphere of violence, fear, and exploitation.

Forced Labor

photonamePhoto courtesy RANIn many instances, the conditions of many workers can accurately be described as nothing
less than captivity.

Investigations by Amnesty International, the International Labor Rights Fund, Humanity International, the US State Department, and the magazine Bloomberg Businessweek paint a disturbing picture of conditions on palm oil plantations.

Local labor is rarely used on palm plantations, as plantation managers generally prefer workers without ties to nearby communities. So the dangerous work is relegated to workers from distant locales.

Workers often arrive with a significant debt to third party labor brokers, who notify them upon arrival at the worksite that they are now responsible for all transportation costs, including any flights or ground trips they’ve just been on. Next, employers often seize and hold passports and other identification documents. Debt peonage is common as well, with workers forced to pay for lodging and food at inflated rates. Even essential safety equipment such as gloves and goggles are added to the tab. Housing is most often substandard, lacking electricity and running water.

A nine-month investigation by Bloomberg Businessweek published in July 2013 revealed the extent of forced labor on plantations, focusing on troubles in Indonesia. One worker, who was identified with the fake name “Adam,” described a harrowing ordeal on a plantation operated by the Malaysian palm giant Kuala Lumpur Kepong Berhad (KLK). Upon arrival, Adam’s passport, national identity papers, and a deed to a collectively owned home were taken from him. Fresh water was shipped in once a month, but ran out after one week. Workers on the plantation frequently used Paraquat, an herbicide banned in more than 30 countries. When workers attempted to flee, they were beaten with sticks and machete handles, Adam told the reporter.

Eventually, workers on Adam’s plantation were able to enlist the assistance of Rainforest Action Network and the Malaysian NGO Sawit Watch. Pressure from these two groups resulted in many workers being allowed to leave, and promises from KLK to pay back wages to workers and blacklist the third party labor recruiter responsible for providing the workforce for the plantation. Despite KLK’s promises, most workers never received back pay, and the individuals responsible for the worst abuses continued to work for the company.

The International Labor Rights Fund gathered stories from workers on three plantations in Indonesia for a report it released last November titled “Empty Assurances.” Testimony from exploited workers shows the manner in which plantation owners try to impose indentured servitude through generating worker debt.

“Our salary during our three month training was only 200,000 Rupiah ($17 USD), rather than the 2-3 million ($173 - $260 USD) promised,” said a worker on a plantation in central Kalimantan, Indonesia. “We tried to be as efficient with this money as possible, but it was not enough. We needed to feed ourselves. So we decided to get in debt to the plantation store.”

Goods purchased at the plantation store on credit were only available at a significant markup. If purchased outright, for example, a cup of ramen noodles cost $3,500 IDR (about 30 cents). But if purchased on credit, the price went up to $4,500 IDR. By comparison, a cup of noodles could be purchased in nearby towns for as little as $2,500 IDR.

In many instances, the conditions of many workers can accurately be described as nothing less than captivity. A July 2010 report from Amnesty International, “Trapped: The Exploitation of Migrant Workers in Malaysia,” details the violence and intimidation of forced labor conditions. According to the report:

“Some are beaten if they refuse to work or if they do not work fast enough, long enough, or to the standard the employer demands. Many more are threatened with harm or subjected to practices designed to impress upon them that they are powerless to refuse their services—they may be under constant vigilance by supervisors or armed guards, locked into the workplace or prevented from leaving the grounds, refused permission to make telephone calls.”

According to the Rainforest Action Network report Conflict Palm, 70 percent of the palm oil labor workforce in Malaysia is comprised of migrants, many of them undocumented, a vulnerable workforce rife for exploitation. The inaccessibility of many plantations and the reticence of the governments of Indonesia and Malaysia to disturb such vital industry means that the full scope of forced and trafficked labor is difficult to asses. Most observers of the industry estimate that there are about 50,000 or more trafficked workers in each Indonesia and Malaysia.

“We only looked at three plantations, and found these serious issues on these three plantations,” says Haley Wrinkle, senior researcher at the International Labor Rights Forum. “I think this speaks to the breadth of the problem.”

Child labor

photoname Photo by Flickr user Waxx Palm oil plantations contribute to the problem of child labor indirectly by setting production
quotas that are often unattainable for a single worker.

Plantations do not generally employ underage workers directly. But they contribute to the problem of child labor indirectly by setting production quotas that are often unattainable for a single worker. Unable to meet their numbers, many workers bring in their children to assist, exposing them to onerous labor and dangerous pesticides.

“I often bring my children to work, despite the fact that the regulations prohibit it,” said a worker indentified as ‘Fatulusi’ in the International Labor Rights Fund report. “I need money, so I have no choice. I bring them to help me fulfill the quota target; if I don’t fulfill it I’ll be scolded. And working together we can often exceed the target and get a bonus payment.”

Most of the workers brought on to help are teenagers, but children as young as elementary school age too, are found on plantations during holidays. Children carry heavy loads of palm fruit in extreme heat, risking heat exhaustion. They climb thorny palm trees with a knife in hand to cut down the fruit with no protective gear, at times suffering cuts and abrasions.

The Malaysian NGO Sawit Watch conducted a site visit of a KLK Plantation in Kalimantan on the island of Borneo (Indonesia) in July 2013 and found that children are not immune to false promises and debt peonage. According to a report put out by the group: “Two of the children were told that they owed the recruiter for the cost of the flight and transportation to get from their hometown to the plantation, but they were never told how much they owed. Every month for the first six months, between IDR 500,000 and IDR 700,000 ($41-58 USD) was deducted from their salary, and after six months working, they received a total of IRD 1,798,000 (about $150 USD, or less than $1 a day). The cost of equipment needed for the work was then also deducted from this amount.”

There is a disturbing secondary effect of children trafficked onto plantations, as well. The US State Department’s 2013 Trafficking in Persons Report identifies increases in children exploited into prostitution in two regions dominated by the palm oil industry: the Riau Province of Sumatra, and West Papua.

Indonesia has been on the US Department of Labor’s “List of Goods Made with Child Labor or Forced Labor” since 2010. In Malaysia, between 72,000 and 200,000 children are working on palm oil plantations, according to a 2012 study completed by Accenture and Humanity United.

Nowhere to Turn

Workers seeking reprieve find they have few allies in local government and law enforcement. In Malaysia, for example, investigations from Amnesty International have turned up numerous instances of bribery, theft, and even assault from immigration and law enforcement officials. Independent assessments from the World Bank and from within the government of Indonesia show a police force plagued by corruption. Fear of abuse and reprisal trump concerns for safety, limiting the ability of workers to seek redress.

photonamePhoto courtesy RANSnacktivists in Minneapolis, MN have been stickering popular products containing palm oil
tied to rainforest destruction. International NGOS and labor groups are working to expose
the unseen costs of palm oil production.

The independent body created to help has been little help to workers, either. The Roundtable on Sustainable Palm Oil (RSPO), established in 2004, was created as a mechanism to regulate environmental and labor conditions in the palm industry. Key stakeholders include oil palm growers, palm oil processors and or traders, consumer goods manufacturers, retailers, investors, and environmental and social NGOs.

It’s a worthwhile effort. But in practice the RSPO leaves much to be desired, both in terms of environmental and human rights abuses. Twelve of the 16 seats on the executive board are held by growers, processors, manufacturers, retailers or investors, leaving the public interest groups in the minority.

“Fundamentally a problem is that laborers have no voice at the table of the RSPO,” says said Laurel Sutherlin of Rainforest Action Network. “Theoretically the complaints resolution process could be used to address labor disputes, but the fact that disputes are pervasive but this process has never been used to address them is a strong sign that the system is not trusted or accessible to workers.”

The weak process for RSPO certification means that even companies with a proven legacy of abuse — like KLK — can maintain standing within the RSPO.

“Often times, a plantation will directly contract a certification body, and will find out which ones are less rigorous,” Wrinkle of the Labor Rights Fund says. “Some of them [certification bodies], anecdotally, don’t even come and visit the plantations. There’s really not much credibility in it.”

A Shift in the Air

During the annual Roundtable on Sustainable Palm Oil meeting last November in Sumatra, a coalition of nine unions representing palm oil workers held a large demonstration outside the conference. Eventually, the union activists were allowed in to talk to the general secretary of the RSPO. Once inside, the group pushed for improved working conditions and modifications to the grievance mechanism of the RSPO.

As a result, there have been two shifts in the RSPO: assurances to strengthen the certification process by which palm oil producers can be recognized by the RSPO; and a modification to the grievance process to make it more accessible to all parties.

The week before the November RSPO meeting, a workshop in Bogor, outside of Jakarta, organized by Rainforest Action Network brought together for the first time 40 different organizations along with academics, government representatives, labor unions for a multi-day human rights workshop to talk about the human rights crisis in palm industry. Participants agreed that one of the best strategies for reforming the industry is to target the name brands that use palm oil.

Well-known brands such as Kellogg’s, Kraft, IKEA, McDonald’s, Unilever, and Nestle, all profit by using palm oil as a relatively cheap ingredient. The buying power of these huge corporations, and the clout they hold with palm producers, makes them attractive targets for activist action. For while palm producers are numerous, palm trading is dominated by just a few companies: Cargill, ADM, Wilmar, IOI, Bunge, AAK, Fuji Oils, Romar, and KLK. The emergent strategy is to apply pressure to the companies concerned with public relations, both the small number of trading companies and the The junk food empire is growing. As goes the Cheetos, so goes palm – the rise of the vegetable oil is inextricably tied to the expansion of processed goods. The pattern of palm’s expansion, unfortunately, follows closely that of most commodities in the globalized economic order: exploitation, environmental degradation. Profit for a few, misery for many. All that convenience in the grocery store comes with a steep price, but international NGOS and labor groups are working to expose the unseen cost. Consumers are taking notice. Stories are trickling out. Palm can’t hide much longer, even behind 200 different names.

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