Indonesian palm oil workers are still struggling to get their rights, including better wages. (JG Photo)

Taking a Stand for Palm Oil Workers


MAY 08, 2019

On May 1, 2014, the government declared May Day, or International Workers' Day, as a national holiday. Workers get a day off to march on the streets and fight for their rights. 

But five years on, Indonesian workers are still struggling to get their rights, including better wages.

Wage issue has become a favorite plaything of politicians. Indonesia's relatively new regional autonomy means that local leaders often try to leverage the wage issue for their political interests.

Government regulation (PP 78/2015) has prevented further politicization of workers' wages, and setting wage growth on economic growth and inflation has provided some stability, but workers are still hoping for a fairer regulation.

Workers' wages were put in the spotlight during the presidential campaign. Though debates around the issue lacked substance, they did provide momentum for the workers to push for more changes.

Now it is the government's turn to make progressive reforms in our labor laws.

Palm Oil Farmers

According to a 2018 publication by the National Development Planning Agency (Bappenas), Indonesia has approximately 16.2 million palm oil workers and farmers, from the plantations all the way to the factories.

These plantations and factories have often been accused of irresponsible labor practices and charged with human rights violations.

The allegations have come thick and fast. 

According to a 2015 Diagnostic Study published by the International Labor Organization (ILO), six major problems were identified in the palm oil industry: low status of the workers; lack of dialogue between companies and workers; low wages; child labor; lack of occupational health and safety; and scant government supervision.

58 percent of the 14 million hectares of oil palm plantations in the country are owned by major corporations. 42 percent are owned by "mini corporations" and farmers.

Corporate entities are subject to Indonesia's Workforce Regulation No. 13/2003. These companies must obey local labor laws or risk prosecution. When they violate the law, workers can launch a legal action against them.

But mini corporations and farmers operate virtually out of the reach of the law. To make things worse, they often have very little management skills.

The result? Bad management practices that are rarely rectified. Violations of labor laws happen often, and are almost never detected. 

Taking a Stand for the Workers

Indonesia has many palm oil workers' unions, but none of them has been interested in palm oil diplomacy.

Workers have been trapped in never-ending debates about their welfare, overlooking the fact that the industry is in dire straits.

The latest threat to the palm oil industry comes from the European Union's Renewable Energy Directive, which in essence declares palm oil as "not kosher" for the European market. 

This policy poses an existential threat to Indonesia's palm oil industry.

Now is the time for the workers to see the bigger picture and rally to keep the palm oil industry afloat.

If the EU follows through with the policy, around 5 million tons of palm oil will go unused each year. There will be an overflow of production, prices will drop, oil palm harvests will come to halt and eventually workers will be out of jobs.

At the end of the day, Indonesian workers will be paying the price for the EU's discriminative policy. Are we supposed to just sit still and do nothing about it?

The policy has created a paradox of its own. Under pressure from the EU's Roundtable on Sustainable Palm Oil (RSPO), Indonesia has been producing Indonesian Sustainable Palm Oil (ISPO) in large quantities. 

A total of 502 ISPO-certified palm oil producers, that control 4.1 million hectares of factories and plantations, produce around 11.5 million tons of crude palm oil (CPO) annually – far exceeding the EU's import of 5-6 million tons.

In other words, Indonesia has already followed through with the EU's demand to produce certified, sustainable palm oil. By its own standard, Indonesian palm oil is by no means "not kosher," nor is it an environmental monster as it claims.

But even after kowtowing to the EU's demand, the discrimination against Indonesian palm oil continues. Is the union not being disingenuous, inconsistent, even hypocritical?

In reality, the EU actually imports more CPO every year. They just don't want to import Indonesian CPO, since it might disrupt their market.

The EU's discrimination against Indonesian palm oil is frankly vulgar. A lot of data have been produced that indicate palm oil actually helps governments around the world reach the United Nations' Sustainable Development Goals (SDGs).

The palm oil industry can help reach at least five out of 17 SDGs: job creation, poverty eradication, education, health and renewable energy. Shunning palm oil will also mean shunning these goals, is that not hypocritical?

Workers Unite

Indonesian palm oil workers formed the Japbusi (Indonesian Palm Oil Workers Network) at the end of last year. The organization comprises five general workers' unions and 10 palm oil workers' unions. Collectively these unions have 2.2 million workers in the field.  

One of the first dialogues between palm oil companies and the new union ended up with both parties agreeing to work together to improve working and living conditions for palm oil workers.

The Indonesian Palm Oil Association (Gapki) has also created six task forces to solve the labor issues identified by the ILO. The Gapki teams will be working closely with Japbusi.

It is now or never. The actions we workers take will determine what happens to our palm oil industry. This is the time to act. As history has proven time and time again, workers always shape and pave the way toward change.

Sumarjono Saragih is a labor leader in the Indonesian Palm Oil Association.