Palm Oil

 

Where is palm oil produced with forced labor?

 

According to the U.S. Department of Labor (2012), palm oil is produced with forced labor in Malaysia and with child labor in Indonesia and Sierra Leone.


What does forced labor in palm oil production look like?

Forced labor in the palm oil sector is most commonly a result of transnational trafficking in persons. Workers in oil palm plantations are particularly vulnerable to forms of modern slavery because of the isolation of palm groves (Accenture).  Verité research on trafficking of male persons (2008) revealed that plantations are among the least monitored worksites, due to their remoteness and size, and trafficked undocumented persons are brought to these sites for these reasons.

Malaysia is a regional destination for international migrants; often labor brokers or employers are implicated in trafficking through such means as confiscation of passports and contract substitution. This is true across all sectors. Verité research revealed that in oil palm plantations, in particular, workers can face significant vulnerability, patterns of abuse and malpractice, and coercion at various stages of the recruitment, migration and employment process. They work long hours for extremely low wages and do physically demanding jobs that leave them susceptible to workplace injuries and poor general health. Many of them are undocumented and constantly face threats of being denounced to the authorities and of being detained and deported. Workers in subcontracting or outsourcing arrangements are particularly vulnerable, as principals and auditing bodies have no visibility into their working conditions (Verité).

On Malaysian plantations, it is commonplace for employers to take possession of workers’ visas, passports, and work permits, thus restricting the workers’ ability to leave the plantations.  If the workers do manage to escape these exploitative conditions, it is police policy to return found workers to the plantations.  Additionally, without their papers, it is impossible for escaped workers to find legal work elsewhere in Malaysia.  Native Malaysians and migrants are both victims of these procedures (Accenture).

In 2010, Sawit Watch recorded the following labor abuses in Indonesia, specifically East Kalimantan: physical abuse, intimidations, unpaid wages and unpaid overtime, indebtedness, child labor, lack of employment contracts, unsatisfactory living conditions, and dangerous working conditions, including unprotected work with chemicals (Sawit Watch).


What does child labor in palm oil production look like?

Worker interviews conducted by Verité in September and October 2012 also revealed that child labor is common in Malaysian and Indonesian palm plantations. Verité research found that children of undocumented plantation workers are especially vulnerable, as they are considered “stateless” and thus unable to avail of education and healthcare from the state (Verité). The Schuster Institute of Investigative Journalism states that around 50,000 Indonesian and Filipino children in the Malaysia states of Sarawak and Sabah are considered stateless. The remote location of palm groves also deters children of plantation workers, documented or undocumented, from attending school.  Moreover, the employment and payment schemes adopted in palm plantations, wherein only the father or the male head of the family is contracted directly by the employer, and paid per piece or based on productivity, push the other members of the family, including children, to work in order to increase productivity and pay (Verite). The social status of the family can force children into work as well as there may be no other options for employment. Families may also be motivated to send their children to work if they are impoverished, indebted, or if they want their child to learn a trade over another type of education. 

According to a 2002 study by the Ministry of Manpower and Transmigration, 75 percent of children working on palm plantations in Malaysia suffered injury due to a lack of protective equipment for risky work, 90 percent of children were not provided with any training, and half of the children working on plantations travelled up to an hour to get to work (Accenture).

The exact prevalence of forced labor in palm oil is unknown. This is due in part to the fact that while trafficking to Malaysia is known to be common, figures are not segregated by commodity. Additionally, the island of Borneo, a major production site for palm oil, is divided between three countries, including Malaysia and Indonesia. Palm oil production is also increasing in Africa and Latin America, and forced labor has not been studied in this context. Other abuses, such as the confiscation of land, have been noted in Colombia and Indonesia.


Palm Oil Production and Supply Chain

The first task for low-wage workers on palm plantations is to prepare the land for planting.  After three years of applying herbicides and pesticides, and cultivating the growth of oil palm trees, workers must manually harvest the fruit.  A palm bunch can weigh 55 pounds and contain 3,000 fruits.  Harvests typically last fewer than 48 hours (Skinner 2013). After harvesting, the fruit is transported to mills and then processing plants, where palm oil is produced from the flesh and palm kernel oil is produced from the kernel of the fruit. With every ten tons of palm oil, one ton of palm kernel oil is produced (Malaysian Palm Oil Export Board). Large palm oil companies, such as KLK, Sime Darby, and Wilmar, usually have their own plantations, mills, and processing plants (Verité).

Oil may be further processed to produce derivatives of varying densities. The derivatives may also be blended with other vegetable oils (Greenpalm). Palm oil or its derivates is present in up to 50 percent of all products in grocery stores (The Economist). Fifty million tons of palm vegetable oil are produced every year (Verité).


Case Study

Trafficking in Persons in Malaysia

Malaysia is a regional destination for trafficking in persons for many sectors, ranging from IT manufacturing to palm plantations. Verité and groups such as Amnesty International (2010) have reported abuses by labor brokers, who charge high rates for visas, up to $1,000 in some cases, and confiscate passports. Workers then become subject to abusive work situations from which they cannot escape.

The U.S. Department of State reports that Malaysia hosts approximately 2 million documented migrants and an additional 1.9 million undocumented migrants. Both groups are vulnerable to trafficking. The most frequent countries of origin are Indonesia, Nepal, India, Thailand, China, the Philippines, Burma, Cambodia, Bangladesh, Pakistan, and Vietnam. Malaysia is on the Department of State’s Tier 2 Watch List (U.S. Department of State 2010).

 

   

Case Study

Forced Labor in Palm Oil Production in Indonesia

Journalist E. Benjamin Skinner highlights the working conditions on a number of palm oil plantations in his article in Bloomberg Businessweek in July 2013.  He profiles “Adam,” who was brought two thousand miles from his home by an Indonesian foreman to drive trucks in Borneo for USD6 a day.  However, during travel, the foreman forced the recruits to sign a contract that bound them to a distant Malaysian employer and paid them only USD5 a day. The foreman allegedly told the recruits that they wouldn’t actually be paid for two years and instead would have to apply for loans from the company for health care and food to supplement their meager rations.  The contract also prevented the workers from leaving the plantation without permission and forced workers to remain for the contracted two years. Once “Adam” reached the plantation, owned by Batu Kawan, a top Kuala Lumpur Kepong (KLK) shareholder, his identity card, school certificate, and deed to a home his village owned collectively were confiscated. He was then forced to work in the newly planted palm groves, spreading fertilizer and spraying herbicides all day instead of driving trucks as originally promised. No protective gear was provided even though the herbicide was known to cause kidney and liver damage. Living conditions were horrendous as well. Workers were locked in hot, windowless rooms, given small portions of food often infested with bugs, and provided with  fresh water only once a month. Any workers who tried to escape were brought back and beaten severely (Skinner 2013).


How does forced labor in palm oil affect me?

    

Vegetable oil is used in products ranging from fuels to soap to ice cream.  Since 1970, the global demand for vegetable oils has increased by over one hundred metric tons.  This has been attributed to the use of vegetable oils in consumer products, as well as an increasing demand for biodiesel fuels in developed countries. Of the different vegetable oils, palm oil is the most popular; according to Humanity United, this is because palm is the “most prolific producer of oils” (Accenture). Since 1990, global consumption of palm oil has increased by five times (Skinner 2013). Growth in India and China contributes to the ever increasing demand for oil, which the World Wildlife Fund reports may double by 2020 (WWF). Producers of the oil have begun relying on forced labor to keep costs low and profits high (Accenture).

Indonesia and Malaysia, both countries confirmed to use forced or child labor in palm oil production, produce about 85 percent of the palm oil in the world – together the countries employ over 3.5 million documented workers (Accenture).  Currently, the U.S. is the sixth largest importer of palm oil, following China, India, Europe, Pakistan and Malaysia (USDA).

According to a recent news report, Kuala Lumpur Kepong (KLK), a Malaysian-owned palm oil company accused of having committed serious human rights offenses, received 26 percent of its revenue from the U.S. and Europe.  Companies known to purchase palm oil from KLK include Unilever, Cargill, Nestle, General Mills, Kraft, and Kellogg. KLK is among many palm oil companies that are facing such allegations. Only thirty-five percent of Roundtable on Sustainable Palm Oil (RSPO) member growers are actually certified and not one company has had their certification taken away for poor performance, despite reports of misconduct (Skinner 2013).


Environmental Consequences of Palm Oil Production

Palm oil production has heavy environmental consequences, notably through widespread deforestation, which leads to the destruction of habitats for endangered species, such as orangutans, and contributes to climate change (Greenpeace). “The creation of oil plantations in Malaysia is regarded as the main cause of the air pollution that has been affecting many neighboring countries in Southeast Asia” (O’Sullivan).

In addition, palm oil has no environmental benefits when used as a biofuel.  Oxfam (2010) has stated that the deforestation resulting from the conversion of forest to farmland in Indonesia would require “420 years of biofuel production to pay back the carbon debt.”


What are governments, corporations, and others doing?

Due to increased campaigning highlighting the environmental impacts of palm oil, the last few years have seen increased engagement by corporations and governments. As a result of pressure from Greenpeace, in 2008, Unilever made a commitment to complete sustainable sourcing by 2015 (Greenpeace). Wal-Mart and General Mills followed Unilever’s lead in 2010. While social issues such as forced labor have not been at the foreground of these campaigns, in one notable case The Body Shop dropped their major supplier of palm oil, Dabaan Organics, over allegations of illegal land confiscations in Colombia.

Companies and other stakeholders banded together in 2004 to create the Roundtable on Sustainable Palm Oil (RSPO), which has a certification system for sustainable palm oil.  The RSPO developed standards for environmental and social responsibility, against which growers and millers are audited for certification. The first set of standards developed by RSPO did not have specific criteria against forced and trafficked labor; however, after pressure from organizations, including Verité, the RSPO voted in April 2013 to create a new set of principles and criteria that included stronger provisions on labor, employment, human rights and business ethics (Verité).  The RSPO requires companies claiming to sell certified-sustainable palm oil to partake in third-party assessments to confirm the “legal, economically viable, environmentally appropriate, and socially beneficial management and operations” status of the product.  Fifteen percent of RSPO member groups have committed to using only sustainably produced palm oil by 2015 (Skinner 2013).

Government actors have also become concerned about palm oil production. The World Bank is developing a palm oil strategy which "will outline a set of principles to guide the World Bank Group’s future engagement in the palm oil sector" (IFC). The Netherlands has pledged to move to sustainable palm oil sourcing from 2015 and the United Kingdom has announced a research initiative on palm oil with UK companies.

The Malaysian Government recently passed the Manpower Act, which claims that by 2020 child labor for children between the ages of seven and 15 will be eradicated. The Act will implement programs designed to increase Malaysian children’s access to educational opportunities (Schuster Institute for Investigative Journalism). 

In 2010, California passed the California Transparency in Supply Chains Act.  The law “calls for greater supply chain accountability by requiring every retail seller and manufacturer doing business in California and having annual worldwide gross receipts that exceed $100 million to disclose its efforts to eradicate slavery and human trafficking for its direct supply chain for tangible goods offered for sale.”  As of January 1, 2012, companies were legally required to make this information easily available to the public – through a “conspicuous and easily understood link to the required information placed on the business’ homepage” (ICCR). This law is extremely important for Palm Oil production as Cargill, Inc. in California, “one of the largest importers of palm oil into the U.S. and trader of 25% of the world’s palm oil,” has notoriously ignored pressures to clean up their supply chain and to adopt supply chain safeguards (Schaeffer).

Hamana Child Aid Society is an organization in Borneo focused on educating the children of migrant workers employed in the palm oil industry.  These children are extremely vulnerable to child labor because they lack legal documents and are therefore unable to attend school.  Hamana Child Aid Society runs 128 learning centers with a total of 12,000 students.  The organization is funded by foreign donors, including the European Union.  A number of companies are also getting involved in education. Wilmar International, for example, runs a school for migrant children because it is the right thing to do, says manager Frederick Chok, and because it helps retain workers. Torben Venning, the organization’s founder, says companies are becoming more involved with the welfare of their workers’ families since the establishment of the RSPO.  (Motlagh)

 

Where can I learn more?

Watch "The Price of Palm Oil" by Al Jazeera.

Learn about Verité’s efforts to end abuses by labor brokers.

Read a report by Verité on new measures to combat risks of forced labor and human trafficking in palm oil supply chains

Read a report by Amnesty International about trafficking in Malaysia.

Read Benjamin Skinner’s article “Indonesia’s Palm Oil Industry Rife with Human-Rights Abuses” for a detailed account of forced labor on a palm plantation. 

Read this Humanity United report on exploitative labor in the palm industry – includes a list of companies and products that use palm oil. 

Explore the Schuster Institute for Investigative Journalism at Brandeis University website to learn more about the dangers of palm oil

Watch a video on the impact of Indonesia’s Palm Oil Plantations 

 

Works Cited:

Accenture. “Exploitative Labor Practices in the Global Palm Oil Industry.”  http://humanityunited.org/pdfs/Modern_Slavery_in_the_Palm_Oil_Industry.pdf

Amnesty International. Trapped: The Exploitation of Migrant Workers in Malaysia. 2010. http://www.amnesty.org/en/library/asset/ASA28/002/2010/en/114eba25-6af5-4975-9ea3-02c22f6bdc5a/asa280022010en.pdf

The Economist. “The Other Oil Spill.” June 24, 2010. http://www.economist.com/node/16423833

Food and Agricultural Organization. FAOSTATs.  Detailed Trade Matrix.  http://faostat.fao.org/site/537/DesktopDefault.aspx?PageID=537 [Accessed September 21, 2010]

Forest Peoples Programme, WALHI, and Sawit Watch. Conflict or Consent? The Palm Oil Sector at a Crossroads. 2012. http://www.forestpeoples.org/sites/fpp/files/publication/2012/11/final-pt-mustika-sembuluh-document-header.pdf

GreenPalm. “What is palm oil used in?” http://www.greenpalm.org/en/about-palm-oil/what-is-palm-oil-used-in  

Greenpeace. How Unilever Palm Oil Suppliers are Burning Up Borneo. April 21, 2008.  http://www.greenpeace.org/international/en/publications/reports/how-unilever-palm-oil-supplier/ 

Hickman, Marten. “Big Brands: Palm oil policy.” The Independent. May 2, 2009.  http://www.independent.co.uk/environment/big-brands-palm-oil-policy-1677480.html  

ICCR. Effective Supply Chain Accountability: Investor Guidance on Implementation of The California Transparency in Supply Chains Act and Beyond. November 17, 2011. http://www.iccr.org/issues/subpages/pdf/11.17.11SupplyChainGuide.pdf

International Finance Corporation. World Bank Group Framework & IFC Strategy in the Palm Oil Sector. March 31, 2011. http://www.hcvnetwork.org/resources/folder.2006-09-29.6584228415/WBG-Framework-and-IFC-Strategy_FINAL_FOR-WEB.pdf

Jakarta Globe. Indonesia Police Allegedly Shoot Six Unarmed Farmers. January 16, 2011. http://www.thejakartaglobe.com/home/indonesia-police-allegedly-shoot-six-unarmed-farmers/417244

Lehr, Hillary. No Blood for Palm Oil. Rainforest Action Network. January 21, 2011.http://understory.ran.org/2011/01/21/no-blood-for-palm-oil/

Malaysian Palm Oil Council. “Processing Flow Chart” n.d.  http://www.mpoc.org.my/Processing_Flow_Chart.aspx 

Motlagh, Jason. “Borneo: An Expat Teacher on a Mission.” Pulitzer Center on Crisis Reporting. January 23, 2013. http://pulitzercenter.org/reporting/borneo-malaysia-sabah-humana-child-aid-plantation-education-mission

O’Sullivan, Laurence. “Palm Oil Growth Damages Rainforest Environment.” Suite 101. March 15, 2009. http://www.suite101.com/content/palm-oil-growth-damages-rainforest-environment-a101206#ixzz14pEmzmRy

Oxfam. Another inconvenient truth: How biofuel policies are deepening poverty and accelerating climate change. June 25, 2010. http://www.oxfam.org.uk/resources/policy/climate_change/downloads/bp114_inconvenient_truth.pdf

Sawit Watch. What’s Happening in the Indonesian Palm Oil Industry. September 20, 2011. http://sawitwatch.or.id/2011/09/what%E2%80%99s-happen-in-the-indonesian-palm-oil-industry-2/

Schaeffer, Ashley. Can California’s New Law Stop Slave Labor in Palm Oil? Rainforest Action Network. January 26, 2012.  http://understory.ran.org/2012/01/26/can-californias-new-law-stop-slave-labor-in-palm-oil/

Schuster Institute for Investigative Journalism. “The Abuses: Forced Labor, Child Labor & Other Humanitarian Concerns.” http://www.schusterinstituteinvestigations.org/#!palm-oil-controversies-forced-labor-child-labor/c1xrj

Schuster Institute for Investigative Journalism. “The Abuse: Indigenous Peoples’ Rights.” http://www.schusterinstituteinvestigations.org/#!palm-oil-controversies-indigenous-people/c235c

Skinner, E. Benjamin. “Indonesia’s Palm Oil Industry Rife With Human-Rights Abuses.” Bloomberg Businessweek. July 18, 2013. http://www.businessweek.com/articles/2013-07-18/indonesias-palm-oil-industry-rife-with-human-rights-abuses

U.S. Department of Agriculture. “Palm Oil: World Supply and Distribution.” http://www.fas.usda.gov/psdonline/psdReport.aspx?hidReportRetrievalName=Table+11%3a+Palm+Oil%3a+World+Supply+and+Distribution+++++++++++++++++++++++++++++++++++++++++++++++++++&hidReportRetrievalID=710&hidReportRetrievalTemplateID=8

U.S. Department of Labor. 2012 List of Goods Produced by Child Labor or Forced Labor. 2012 http://www.dol.gov/ilab/programs/ocft/pdf/2012TVPRA.pdf  

U.S. Department of Labor. 2010 List of Goods Produced by Child Labor or Forced Labor. December 2010. http://www.dol.gov/ilab/programs/ocft/pdf/2010TVPRA.pdf    

U.S. Department of State. 2010 Trafficking in Persons Report. http://www.state.gov/documents/organization/143187.pdf

Verité. Help Wanted. http://www.verite.org/helpwanted/

Verité. Sustainable Palm Oil? Promoting New Measures to Combat Risks of Forced Labor and Human Trafficking in Palm Oil Supply Chains.” May 2013. http://www.verite.org/sites/default/files/images/Palm_White_Paper_May_2013_Final_Draft_0.pdf

Verite. Hidden Costs in the Global Economy: Human Trafficking of Philippine Males in Maritime, Construction and Agriculture. 2008. http://www.verite.org/sites/default/files/images/Verité%20TIP%20Report%20Male%20Trafficking.pdf

World Wildlife Fund. “About Palm Oil.”  http://wwf.panda.org/what_we_do/footprint/agriculture/palm_oil/