SINGAPORE: Singapore-based Wilmar International on Wednesday (Dec 14) said that a "concerted effort" is required to address labour rights issues that affect the palm oil industry, in response to a report by Amnesty International which alleged that labour abuses took place on its palm plantations and those run by its suppliers.
The report dated Nov 30 said that children as young as eight worked in "hazardous" conditions on plantations in Kalimantan and Sumatra.
Amnesty, which said it interviewed 120 workers, alleges that many of them worked long hours for low pay and without adequate safety equipment. The palm oil from these plantations could be traced to nine multinational companies, including Unilever, Nestle, Kellogg and Procter & Gamble, it said.
“Despite promising customers that there will be no exploitation in their palm oil supply chains, big brands continue to profit from appalling abuses,” said Ms Meghna Abraham, senior investigator at Amnesty.
In a statement, Wilmar said it welcomed the NGO’s report, which helps to highlight labour issues within the broader palm oil industry, but added that finding a solution requires the collaboration of governments, companies and civil society organisations.
ISSUES ACKNOWLEDGED, ASSESSMENTS ONGOING: WILMAR
“We acknowledge that there are ongoing labour issues in the palm oil industry, and these issues could affect any palm company operating in Indonesia,” it said. “The focus on Wilmar ... is often used to draw attention to problems in the wider palm oil industry.”
It added: "Wilmar has said that many of the labour issues require a bigger platform and collaborations between governments, companies, and civil society organisations.
"Several palm oil majors (Golden Agri-Resources and Musim Mas) and industry stakeholders (Oxfam, The Forest Trust and the Roundtable for Sustainable Palm Oil) have also responded largely in line with Wilmar’s stance, that labour rights issues affect the wider palm oil industry and a concerted effort is required from industry stakeholders in order to mitigate and resolve these issues."
Wilmar added that it has concluded internal assessments on its estates - PT Perkebunan Milano and PT Daya Labuhan Indah - cited in the Amnesty report and will prepare an update shortly.
It also added that it will begin field assessments on its third-party suppliers cited in the report - PT Abdi Budi Mulia, PT Hamparan Masawit Bangun Persada and PT Sarana Prima Multi Niaga.
The Amnesty report said that these three companies "abused their workers’ rights to just and favourable conditions of work, health, and social security", adding that it found "cases of forced labour and the involvement of children in the worst forms of child labour in their operations".
ACTION BEING TAKEN: THE FOREST TRUST
Wilmar's sustainability policy implementation partner The Forest Trust (TFT) said that it recognises that labour issues exist in the industry and "applauds" those working to address them.
"We feel that our members, through their work with TFT, are taking positive steps and working hard to uncover and tackle the different forms of labour exploitation clearly endemic in the palm oil industry," it said in a statement.
Commenting on the Amnesty report, Oxfam identified how labour rights issues could be better tackled.
"First, companies (producers, buyers) need to close implementation gaps in their value chains, aware that commodity trade pushes down prices and risks exploitation.
"Second, auditors and law enforcement agencies must improve to address verification gaps, not tolerating forced and child labour in palm oil and beyond; and third, the Roundtable on Sustainable Palm Oil (RSPO) stakeholders should review the standard for more effective guidance and indicators.
"We did it for deforestation. Human rights are the next wave."
"POVERTY, WEAK LAW ENFORCEMENT" UNDERLYING ISSUES: RSPO
The RSPO, meanwhile, said it is fully aware of serious problems in the protection of workers and human rights issues in the global intensive agriculture sector, including the oil palm sector.
"These problems are exacerbated when linked to poverty, weak law enforcement and the presence of legislative gaps - as underlined by Amnesty itself - contributing to the challenge of making agriculture and specifically the oil palm sector truly sustainable.”
Wilmar said it has "engaged with most of the major plantation companies as well as the RSPO to seek collaborations for labour transformation across the sector".
It added: "Within the RSPO, we will be participating actively in the newly created Labour Working Group, and the existing Human Rights Working Group.
"Within these RSPO working groups, we will be pushing for improvements and better clarity in implementation of the human and labour rights components of the RSPO Principles and Criteria."
PRACTICES IDENTIFIED IN AMNESTY REPORT HAVE NO PLACE IN OUR SUPPLY CHAIN': NESTLE
Companies whose products are made with palm oil sourced from Wilmar's plantations responded to the Amnesty report, pledging to address the problem.
Nestle said it is working with Wilmar to improve the traceability of the commodity. “Practices such as those identified in Amnesty International’s report have no place in our supply chain,” Nestle said. The company said it would investigate allegations related to its purchase of palm oil along with its suppliers.
Procter & Gamble said it is working with Wilmar to “ensure they can remedy any potential human rights infringements in their supply chain”.
No company would “consciously” hire underage labour as that is against the law, but some plantation workers get their children to help out, said Sumarjono Saragih, an official at the Indonesian Palm Oil Association.
The government has been trying to reduce child labour by giving subsidies and other assistance to families, said Maruli Hasoloan, a senior official at Indonesia's manpower ministry.
The ministry will also study working conditions at palm plantations and improve labour protection in Indonesia, he said.
Agus Justianto, an official at Indonesia’s environment ministry, said that a company found guilty of labour violations could get its permit revoked, but it is “not in the environment ministry’s domain”.
Kellogg said it is committed to ensuring that its palm oil is obtained from “known and certified sources that are environmentally appropriate, socially beneficial and economically viable”.
If Kellogg finds or is made aware of any supply chain violations, it would discuss corrective actions with its suppliers, it said. “If the concerns are not adequately addressed, we take action to remove them from our chain.”
Unilever said more needs to be done to address “these deeply concerning social issues”, and promised to work with its partners.