Next palm oil issue: Labour rights

by Nathalie Rasmussen, Head of Business Conduct Engagement at GES

Although it has been a turbulent year in the palm oil industry, let us not forget progress has also been made: the HCS convergence agreement was reached in November 2016, the goal of which is developing a single high carbon stock methodology to be applied to oil palm plantations in fragmented landscapes in moist tropical forest. Furthermore, a new smallholder traceability system to increase productivity was developed by Wilmar, GeoTraceability, Wild Asia and IDH. Also, the RSPO is launching its new complaint procedure which will increase transparency and accessibility. However, the year now seems to be ending with another set of negative news on the industry: reports of violations of labour rights at palm oil plantations in Indonesia.

On November 30, 2016, Amnesty International published a report[1] which mentions hazardous child labour and poor working conditions at Indonesian palm oil plantations that supply to the world’s largest palm oil trader, Wilmar. It is interesting to note that before the report even came out, Wilmar informed its stakeholders about the steps it had taken to address child labour in its supply chain. Not only does the company expect its suppliers to comply with its policy which prohibits child labour, but Wilmar is also assessing labour issues in the supply chain in what it calls the “Overarching Reports”, which are part of the Aggregator Refinery Transformation (ART)[2], a collaboration with The Forest Trust (TFT). Lastly, Wilmar is developing a labour programme to identify labour best practices and prevent exploitative practices in collaboration with Business for Social Responsibility (BSR), a global non-profit organisation dedicated to sustainability. This is a part of a wider project also in collaboration with BSR and other industry peers to benchmark human rights and labour issues in the Indonesian palm oil industry. The review will reference some of the relevant labour standards, including the ILO labour guidelines and the Free and Fair Labour Principles for Palm Oil Production, amongst others.

Child labour can be a difficult issue to tackle, depending on why children are working. According to Wilmar[3], lack of education and child care facilities in the plantation areas of its suppliers is part of the problem. The work that Wilmar has already started on improving labour issues in the palm oil sector, such as field assessments that are conducted with TFT as part of the ART plan, as well as the work with BSR on identifying best practices and preventing exploitation, is important for plantation workers, their families and Wilmar.

According to AidEnvironment, there is no reason to suspend Wilmar from the RSPO[4] as the company is willing to work on improving the labour situation at its plantations and suppliers.

GES is in a continuous dialogue with palm oil producers, buyers and refiners, on behalf of institutional investors, to improve issues relating to FPIC, occupational health and safety, peat land protection, HCS and HCV conservation.

[1] https://www.amnesty.org.uk/sites/default/files/the_great_palm_oil_scandal_lr.pdf

[2] http://www.wilmar-international.com/sustainability/progress/aggregator-refinery-transformation-art/

[3] http://www.wilmar-international.com/wp-content/uploads/2016/11/WIL-Responses-to-Amnesty-International-17-Oct-11-Nov-2016.pdf

[4] http://www.foodnavigator.com/Policy/Amnesty-report-fallout-Another-blow-for-RSPO

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