Facts

On last September 30 , US Customs (CBP) announced a ban on the import of palm oil produced by FGV Holdings Berhad (FGV) - one of the largest Malaysian plantation companies and a commercial partner of Procter & Gamble - due to evidence of forced labour. The ban was pronounced in response to a lawsuit filed over a year before by Global Labor Justice - International Labor Rights Forum (GLJ - ILRF), Rainforest Action Network and SumOfUs. Under US law (19 USC §1307), imports linked to forced labour are strictly prohibited in the United States. CBP has therefore announced an immediate ban on imports of palm oil and oil palm products manufactured by FGV and its subsidiaries and associates. The order results from a survey which lasted a year, which revealed facts of forced labor, including of abuse of vulnerability, of deception, of restriction of free movement, forced isolation, physical and sexual violence, intimidation and of threats, as well as for confiscation of identity documents. The investigation also raised suspicions of forced child labor.

The Malaysian company FGV said to implement a long-term action plan as part of its affiliation with the Fair Labor Association (FLA), which is based on a number of initiatives to improve its practices in terms of compliance to labour laws. FGV has a known history of producing inaccurate documents concerning labour laws. Indeed the Roundtable on Sustainable Palm Oil (RSPO) suspended the certification of the production of sustainable palm oil at FGV in 2020 after audits had revealed that salaries and conditions of work in force at the Sawit Serting factory were not aligned with national labor laws. FGV is also suspected of not acting to prevent migrant workers to pay unfair recruitment fees and to continue to establish work contracts without clearly defined clauses.

A report published in 2018 by the Consumer Goods Forum has highlighted cases of forced labor in the palm industry in Indonesia and Malaysia, which immediately alerted the 400 CEOs members of the network. The members of the Consumer Goods Forum include well-known palm oil buyers in the US, such as Nestlé, General Mills, PepsiCo, Colgate-Palmolive and Johnson & Johnson.

A Malaysian exception?  

The fact that a group of NGOs could denounce with enough credible evidence these deprivations in Malaysia should not imply that such offenses couldn’t exist in Indonesia (or Colombia, or Cameroon...).

Indeed, the root causes of social abuses are the same in all the plantations around the world.  In addition, many of the agro-industrial groups that dominate the sector in Indonesia are transnational groups operating in both countries (IOI, Sime Darby, FGV…). The world of work in plantations therefore differs very little from one country to another.

Is the palm tree hiding the forest? 

The palm oil sector is one of the largest employers in Malaysia and Indonesia, where more than 85% of the world's palm oil is produced. Several NGO reports show that oil palm plantation workers can be recruited, through deceptive and unethical practices, from the most vulnerable populations such as migrant workers, economic refugees or the homeless. The lack of documentation on working conditions, compounded by the fact that plantations are inherently far from large cities, puts workers at additional risk of exploitation.

The main protagonists of the palm oil debate – agro industrial estates as well as smallholders - will have to provide clear and verifiable answers to these questions, with a risk of seeing these failures used as testimonies justifying a boycott or a suspension of imports into consuming countries.

As for many tropical plantation crops, the colonial heritage still weighs on the social structure and hierarchy of agro-industries in Southeast Asia. Plantation companies, national or transnational, have managed to gain millions of hectares of forest, and to mobilize hundreds of thousands of workers in Indonesia and Malaysia. When the labour problems emerged into the open for the first time 2015, they concerned mainly Malaysia. Careful observers of the sector were already pointing out that the problem did not concern only the labor force in the palm plantations, all the informal sectors of the country. Thus, the lack of regulation of the market of migrant labour has left the country vulnerable to abuse and exploitation by the end of the colonial era.

In Indonesia, are NGOs argue that the fate of plantation workers is likely to worsen, after the application in the sector of the Omnibus Law on deregulation that was recently adopted. The law was heavily criticized for carrying the risks of restricting workers' rights and weakening environmental protection, sparking widespread protests across the country when parliament passed it on last October.

As with conflicts related to environmental damage, large international NGOs have taken the step of attacking the emerging part of the iceberg of the supply chain, by directing their campaigns towards iconic brands that are largely known to the public. Even if they are sometimes simplistic, those campaigns have the merit of shedding light on complex supply chains, governed by globalized trading routes and systems, with numerous intermediaries.

Here again, the risk is great of displacing the problem without solving it. Large buyers undoubtedly have the means to ban dubious suppliers from their supply chain. Nevertheless, are the black sheeps credibly forced to modify their practices, while a good number of less scrupulous buyers run to the Indonesian and Malaysian markets and supply undemanding markets in India or China?  

Certify to protect? 

The RSPO platform has adopted Principles and Criteria (P&C) which address key questions, such as eliminating deforestation, banning the use of fire or planting on peatlands. Labor and human rights standards are also part of RSPO P&Ss since their inception and are reviewed every five years to ensure that the standards remain relevant. Each update of the P&Cs considerably strengthens the criteria relating to human and labour rights, including children rights. Such strengthened criteria are intended to guarantee an adequate protection of workers' rights (and their families) in the plantations. However, as it is the case for environment-related P&Cs, the problem is their application on the ground: some member companies of RSPO are regularly facing complaints for breaching P&Cs of in respect of social rights and child labour.

National standards (ISPO and MSPO) also address these questions, being able to rely on the labour legislation in place in each country, which is not the case for the RSPO standard, which are based on the voluntary membership of plantation companies. Responsibility for labour law issues is shifted to national authorities, and it directly questions their ability to effectively enforce minimum standards and severely punish offenders, across all of the country's industrial sectors. 

The long and winding road

Malaysia recently celebrated the centenary of its first oil palm plantations and the situation in the world of plantation work has changed little since.

A recent UNICEF report identifies some of the root causes affecting the condition of children in oil palm plantations: gaps in national laws and policies regarding international standards; weak will to enforce laws; the growing precariousness of the working population and numerous shortcomings related to the infrastructure of basic services (education and health).

In Indonesia, the International Labour Office (ILO) works in partnership with governments (central and decentralized) on key issues of decent work and forced child labour in oil palm plantations.

Many challenges stem directly from the colonial heritage of the sector. Private plantations have been operating in Indonesia since 1860; historically, plantations were responsible for providing workers with all basic social services, including housing, schools, and health care. Many of these services continue to be provided by plantations today, and they are sometimes used as a justification for low wages.

Lack of education and cultural uprooting are the distressing common lot of all migrant populations; they are all factors conducive to abuses of all kinds. In the plantations, geographical isolation exacerbates the infringements of rights, which are perpetuated from generation to generation, by maintaining a docile and inexpensive workforce in place, sometimes for four generations. 

Are the infringements of fundamental labour rights (freedom of movement, right to decent work), mistreatment of women, child labour in plantations… linked to the nature of agricultural production itself or to the organization and the history - old and recent - of the Southeast Asian plantation sector?

This is the most complex question to be answered, and the temptation is great to accuse a culprit designated in advance, while it is the legal framework for all activities (agricultural and industrial) that needs urgent improvement.