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Condition of Palm Oil Workers, Causes of CPO Prices Decline and Human Rights Violations at Oil Palm


Press Release Link-AR Borneo Welcomes International Human Rights Day on December 10, 2018

All products or goods that are used, enjoyed and proud by all people throughout the country, including Indonesia, are the work or production of workers, especially laborers in plantations, mines, services, transportation and manufacturing. The workers also provide multiple wealth to employers and authorities. The question is how about the conditions of the workers themselves, especially plantation workers? The Link-AR Borneo Press Release related to the commemoration of Human Rights Day in 2018 is intended as an effort to understand Human Rights violations and the problems faced by oil palm plantation workers. The Link-AR Borneo Press Release also wants to highlight at a glance the underlying causes of the decline in the price of palm oil products and their processed products, it’s Crude Palm Oil (CPO), which is due to the over-production of CPO.


Director General of Plantation, Ministry of Agriculture Bambang said, in 2017 foreign exchange earnings of exports reached $ 21.25 billion or around Rp. 287 trillion, with CPO production of 37.8 million tons. While in terms of employment, there are around 5.5 million workers with a plantation area of ​​14.3 million hectares. The Ministry of Agriculture divides workers who work in the oil palm plantation sector in three classifications, they are: 1. Oil palm laborers; 2. Employees; 3. Oil palm plantation workers. In this division from 2000 there were 2 million workers increased to 7.8 million people, there were an increase of 5.8 million people to become laborers.


The greater expansion of oil palm plantation companies will increasingly increase the absorption of workers, the majority of which come from rural areas. The expansion of oil palm plantations obtained concession permits from the government, where plantation concessions were in rural areas and indigenous peoples' territories, so that villagers and indigenous people were ensured to become laborers in oil palm plantation companies.


The entrepreneur's income from palm oil production and its derivatives is fantastic. Four of them, such as Wilmar, in 2009 made a profit of Rp 220 trillion. In 2018 the first 3 months period, Wilmar recorded a net profit of US$ 361.6 million, for core profit it grew 40% or US$ 312.6 million (excluding core operations). The second is that GAR (Golden Agri Resources) in the third quarter of 2018 received a profit of US$ 370 billion. While the third is PT Indofood, its revenue rose to Rp 12.14 trillion. Fourth, the increase in income of PT Dharma Satya Nusantara Tbk (DSN) in 2017 reached Rp. 5.16 trillion, up 33% from 2016. This increase in income certainly involves the accumulation of accumulated capital and goods of company owners. Profits are not only felt by 4 companies but also other companies, such as Sumber Waras Group, PT Musim Mas Group, PT. Julung Group, PT Gunnas / Incasi Raya Group, etc.


Weakening of CPO exports

Even though the condition of the CPO market is sluggish but still companies get benefit. According to GAPKI, the decline in the last 4 months CPO price of total exports fell 4% from 10.70 million tons to 10.24 tons. Export value fell to 13% compared to 2017. The cause of the decline in palm oil exports and palm prices was because in Indonesia and Malaysia as the largest oil-producing countries in the world, were experiencing over-production.


Processing plants experience a buildup of CPO, followed by a high increase in Indian import tariffs. While in the European Union, it is affected by rapeseed oil stocks. The United States is due to the high domestic stock of soybeans as a result of China's retaliation of America which imposes high taxes on products imported into China, so that China retaliates by increasing the import tax on soybeans from America.


In the matter of looking for the reason for the decline in exports and the purchase of FFB (fresh fruit bunches) of farmers, it is always the ones who are accused of being said to have carried out a black campaign about oil palm plantations. The accusation is incorrect, for two reasons. First, because NGOs are not CPO producers. FFB and CPO producers are large-scale oil palm plantation companies both private and state, which are extensively expanding land to be used as oil palm concessions, reaching a current scale of 14.3 million hectares. As a result, FFB and CPO production became abundant, in other words is over production, which in turn would cause the prices of FFB and CPO to decline dramatically. Therefore, the main reason for the declining price of FFB and CPO is due to overproduction that comes from the uncontrolled production of large oil palm companies in clearing land for oil palm plantations. These are the basic causes which have caused the supply of FFB and CPO to accumulate and then make the price decline. Thus, it is clear that the current decline in the price of Indonesian FFB and CPO is palm overproduction because of the greedy behavior of large-scale oil palm companies, not because of NGOs, because NGOs are not involved in the palm oil production chain. Of the 25 large groups of global scale palm oil companies whose production centers are located in Indonesia and Malaysia, there are no NGO names in them. Concretely, the main cause of the decline in palm oil prices is the greedy behavior of 25 large groups of oil palm companies on a world scale that have made palm oil overproduction!


Second, the weakening of the economic capacity of countries that originally bought Indonesian palm oil has nothing to do with the success of local, national and international NGO campaigns that encourage oil palm production to be produced by paying attention to environmental preservation and respect for the human rights of those working in palm oil sector. The slowing economic growth of many countries in the world, including in countries that originally bought Indonesian palm oil, such as the European Union, for example, was caused by a recurring crisis in the system of monopoly capitalism. Every 10 years, monopoly capitalism always experiences a crisis, the solution of which is imposed on the poor throughout the world, including oil palm plantation workers and oil palm farmers (smallholder oil palm plantations). The last final crisis that befell monopoly capitalism occurred in 2008, where many of the world's big corporations got bailouts from their governments so that capitalism did not experience a deeper collapse.


The accusation is only a search for scapegoats from falling exports to China, the European Union, and India, and the United States which fell 5% from 2.53 million tons. This can be seen from the increase in CPO imports to the Middle East, while Pakistan increased imports to Bangladesh due to the impact of the increase in Indian import tariffs.


While the influence of NGO campaigns only takes place in Europe, and even then Europe still needs CPO / palm oil from Indonesia. This is also reinforced by the government's plan to prepare the RAN-KSB, as a reference for building sustainable oil palm plantations in accordance with the Presidential Regulation. In addition, it must be emphasized that palm oil production must be produced sustainably, in terms of preserving the environment, not producing oil palm on peat soil, and paying attention to the Human Rights of workers working in the large-scale oil palm plantation sector. This means that there is nothing wrong, when Indonesian NGOs campaign that Indonesian palm oil production must be produced through production that provides protection of human rights to oil palm plantation workers and does not carry out deforestation.


Violation of human rights on oil palm plantations

Profit for profit is obtained by entrepreneurs, but how is the condition of existing oil palm plantation workers, such as the question stated above. The conditions of the oil palm plantation workers are not comparable to the benefits obtained by companies or investors. Which if referring to Labor Law No. 13 of 2003, labor rights must be fulfilled. Coupled with the role of the state / government contained in the 1945 Constitution and UUHAM 39 of 1999, the government should be able to uphold and implement human rights if it would make sustainable oil palm plantations.


Labor conditions in accordance with Law 13/2003, very far from expectations, Statistical Centre Agency (BPS) of West Kalimantan 2015 data issued in 2017, labor data include agricultural, forestry, hunting and fishing workers with a total of 1,158,093, if divided by 4 the number of workers in the agricultural sector totaling 289,523 people. Is the number of plantation / agricultural workers in West Kalimantan oil palm plantation companies fulfilling labor rights? Where Occupational Safety and Health (OSH) conditions are bad, such as the absence of Personal Protective Equipment (PPE) that is complete and in accordance with the conditions and geography of the West Kalimantan region or concession, there are even companies that do not provide PPE to workers. In addition, there is no medical service or medical check-up for workers who come into contact with poisons, such as pesticides / paraquat, the impact of which is 2 deaths of oil palm plantation workers in Kubu Raya District and Sekadau District.


In addition, the employment status of workers is uncertain and impacts on uncertain working days including working hours which can change without any clarity. This also resulted in low wages received by workers even far from provincial minimum wage. There are plantation workers who work 8 days in 1 month with a salary of Rp. 80,000 / HK, so that in one month the worker only gets Rp. 640,000. Some even have only 4 days working. Every time workers are threatened with layoffs, this always haunts workers, especially local workers, where local workers come from farmers or indigenous people who do not get fair results from partnering with companies, which are forced to make people work as laborers. The community loses land, plasma partner profit sharing is low and wages are low and employment status is unclear.

Many plantation workers are not registered and / or registered with Employment Insurance (BPJS) by companies on the grounds that they are casual daily laborers and there are already Health Insurance (BPJS) from the government and there is no e-KTP (electronic identities) as a condition. In fact, if referring to Law 13/2003 and PP 44/2015, these two rules do not specify the status of workers, but all workers must be registered or participate in the BPJS Employment.


The condition of female workers is more concerning, where female workers do not get menstruation leave and maternity leave. If they are going to leave, they must look for a substitute or also be considered unemployed or absent, so that they will lose the daily wage that must be received.

From the explanation above, related to labor rights, oil palm plantation companies in West Kalimantan have violated Law 13/2013 Article 86, 87, 93, 95, 99, 100, and Article 190. In addition, oil palm plantation companies in West Kalimantan have violated general provisions of UUHAM 39/1999. Oil palm plantation companies in West Kalimantan have also violated provisions in international human rights instruments including violating the Civil Code Covenant on guarantees of legal protection, where slavery should not be available in the work environment in Articles 6 and 8. Oil palm companies in West Kalimantan also violates the Covenant of Ekosob in terms of guarantees to obtain a fair economic life and guarantees to obtain family welfare, as stated in Article 5, 6 and Article 7.

Recommendations from Link-AR Borneo related to improving the fate of oil palm plantation workers in the implementation of Manpower Law and Human Rights Law, as well as commemoration of the 2018 Human Rights Day

1. The existence of laws and / or special regulations on oil palm plantation workers that protect workers and the provision of labor rights, especially wages, which are adjusted to the provincial minimum wages needs and inflation in a region (province and district / city) are not uniformly national.

2. Running and giving Occupational Safety and Health (OSH) to all oil palm plantation workers, holding medical check-ups for workers who are prone to exposure to pesticides and have heavy workloads. Conduct good training and counseling to all workers about the use of pesticides and their effects. Including the provision of Personal Protective Equipment (PPE) to workers for free instead of paying.

3. Reduction of workload for harvesters from 1000 kg to 1200 kg of FFB harvest to 800 kg of FFB, so that laborers do not exploit. And increase labor costs, and stop the practice of reducing working hours and working days for workers by oil palm plantation companies. Provision of the rights of workers who experience layoffs and those who experience work accidents and are sick until they die.

4. Stop intimidation of workers, one of which is the prohibition of union workers and companies only recognize one union in the company, including the government.

5. Central and regional governments must exercise supervision and defense of the neglected labor rights in accordance with the mandate of the 1945 Constitution, Labor Law No. 13 of 2003, the Law on Human Rights No.39 of 1999 and other regulations. Not the other way around, instead of waiving.

6. The regional government in this case is the Governor of West Kalimantan and all regents / mayors to identify labor problems and make regulations on regulations or governor regulations and regulations to protect and respect labor rights, in accordance with the principles of human rights that have been regulated in the Manpower Law and Human Rights Law.

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