Improve the situation of palm oil workers through workers unions

In agri-commodity supply chains in non-western countries poor working conditions, sexual harassment and human rights violations are unfortunately still a reality. CNV and HUKATAN-KSBSI jointly engage to improve the situation on palm oil plantations in Indonesia. Strengthening workers’ bargaining power is a crucial part of their work. Read here how the establishment of a strong worker union has empowered and improved the lives of palm oil workers in an estate in Northern Sumatra.

Palm oil workers in Indonesia

Approximately 5 million workers make their living in the palm oil industry of the world’s largest palm oil producer, Indonesia. While palm oil production has largely contributed to the national GDP, wages for the workers on palm oil plantations remain low. Also, labour rights violations are a widespread problem in the sector and include lack of contracts, high production targets that encourage child labour, health and safety issues, sexual harassment and lack of freedom of association.


Doing palm oil business in a socially responsible way

Too often palm oil producer and their customers do not take enough responsibility to ensure that the rights of their workers are met. Some companies show that it does not have to be that way and that business can be done in a social responsible way. An example is Wilmar-owned company PT Murini Sam Sam operating in Sumatra.


External labour assessment set the seed

In 2017 a labour assessment was conducted by CNV and SOMO (Centre for Research on Multinational Corporations) in two palm oil companies in Indonesia. One of them was PT Murini Sam Sam (MSS). The study found shortcomings in wages, temporary contracts, informal family work, working conditions and freedom of association. In particular there was no formal workers union that could negotiate for better working conditions on behalf of the workers.


NGO support to establish a workers union

In response, Wilmar’s Indonesian Human Resources department contacted local trade union HUKATAN-KSBSI, an organisation representing 50,000 workers in the Indonesian palm oil sector. They engaged with PT MSS to jointly establish a workers union and train their members. In addition, Wilmar and Hukatan-KSBSI facilitated the negotiation of a collective bargaining agreement (CBA) between the company, the union, and the workers. A CBA can ensure that workers rights and (inter)national labour rights are followed by a company. It ensures improved working conditions and social dialogue between the workers and the company. This way such an agreement can help to protect the rights of the workers.

EPOA1904 shutterstock_1325851382

Improved workers conditions through the workers union

The workers union empowered workers at PT MSS. As a result of the workers union establishment, health and safety measures were improved, such as the work on chemicals, particularly for pregnant women. A gender committee was formed that addresses harassment, sexual intimidation and discrimination against women. Women reported to feel more protected from inappropriate behaviour now. The housing and equipment situation has improved ever since, for example through better provision of drinking water. Workers now have health insurance, but this is only available for permanent workers. Qualified temporary workers are following a track towards permanent positions and contracts, which will allow them to get health insurance too. Wilmar is in the process of getting all workers under a contract and has decreased the working hours in harvesting as part of better working conditions.


Workers unions create social dialogue for continuous improvement

The joint work of CNV and HUKATAN shows that a strong workers union plays an important role in strengthening workers rights through creating social dialogue between the company and the workers. This dialogue is an ongoing process for safeguarding and improving working conditions in the palm oil sector. Companies will benefit from a more satisfied workforce and better quality of work, and they become more attractive for the European market. Through this cooperation the social dialogue between Wilmar and Hukatan (and also the other trade unions in Japbusi) is improved, there is a better complaint handling and cooperation on mutual issues.

Palm 1464654 1920

Still a long way to go

Well-established workers unions and CBAs have the potential to substantially strengthen the rights of the workers on palm oil plantations. Yet a recent assessment in West Kalimantan showed that the number of companies with workers unions and CBAs remains terribly low, only 2,9% of all plantations have a CBA. If workers unions exist, 40% of them are not affiliated with sectoral or regional trade unions. Instead, they were established by the companies themselves to fulfil administrative or certification requirements. These unions tend to negotiate in favor of the company instead of representing workers interests. Some of the existing CBAs were of poor quality in certain areas, sometimes breaching Indonesian law or containing segments that were at the disadvantage of the workers.

Shutterstock 749824966 1024×1024

It is important that members of the workers union are well-trained about their rights and have the skills to negotiate with the company. The workers union needs to be affiliated with independent trade unions, preferably members of a sectoral or regional trade union confederation. This also ensures the company, traders and investors that the trade union has knowledge of international sustainable trade and the capacity to bring issues to a higher level and receive support to negotiate CBAs that improve labour conditions of the workers.