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Labor auditing in certified palm oil industry
Medan this week is hosting the 11th meeting of Roundtable on Sustainable Palm Oil (RSPO)
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edan this week is hosting the 11th meeting of Roundtable on Sustainable Palm Oil (RSPO). The world is curious about the outcome of the event and the decisions to be made by over 600 delegates discussing the current affairs of oil palm growers and industries.
For RSPO, Medan is a historic place because it is the capital of North Sumatra, the first region in Indonesia to have developed oil palm commercially since the Dutch colonial period. Oil palms in the province may have been replanted twice or more.
One of the interesting issues tabled in the RSPO meeting is labor. The meeting comes against the backdrop of the revelation of findings by a number of NGOs and trade unions of unfair labor practices on oil palm plantations that are subsidiaries of RSPO-certified large estates. A few weeks back, workers from a palm oil company in North Sumatra held a strike for the same reason, demanding improvements in the target-setting regulation for workers that they consider too hard to achieve.
Such complaints suggest that that RSPO certification does not guarantee protection and welfare support for workers on oil palm plantations. The subsequent questions are twofold: Is this is caused by a lack of goodwill on the part of the oil palm estates, or are there embedded flaws in the RSPO certification itself?
We should acknowledge that there has yet to be in place a satisfactory supervision and protection system for labor in Indonesia anyway. The government says the number of labor inspectors across the country is far from adequate. Up to date, there are 2,384 inspectors overseeing 216,547 companies employing more than 114 million workers. Nearly 40 million of them are working in the plantations.
The International Labor Organization, in its 2006 benchmarking survey, said that the ideal ratio between labor inspectors and workers was 1/10,000 in industrial market economies; 1/15,000 in industrializing economies; 1/20, 000 in transition economies; and 1/40,000 in less-developed countries. It is clear that Indonesia's ratio of 1/47,000 today is way behind even the standard for less-developed countries.
On top of an inadequate number of inspectors, distribution of labor inspectors is uneven across regions. There are 200 out of more than 500 regencies/municipalities in Indonesia where labor inspector is absent and oil palm industry is expanding.
The presence of private non-state regulation such as RSPO may theoretically fulfill the gap in labor monitoring and protection, but clearly it cannot replace the role of labor inspectors. Legally speaking, labor inspectors are responsible for protecting workers from any violations in industrial relations, particularly with employers.
When an employer makes mistakes, a labor inspector may act and order immediate remediation to the employer. Such a job cannot be done by a third-party auditor who is paid by the company.
Normally, third-party auditors lack the knowledge of labor laws or regulations and experience in recognizing potential violations in a comprehensive manner. A good assessor needs competence to interpret events on the field.
A third-party auditor, for example, would find difficulty to classify whether the production target of a daily irregular worker is high or low.
A production target system or borongan (piece rate) is known to apply in the garment and apparel sector. Companies will typically set the highest target with the lowest rate of pay to achieve a high level of productivity. Such a system is considered unfair because the target is set arbitrarily by the employer.
In the plantation sector, a worker would then invite his family members to work to achieve the target. In such instances, minors and women are often included. If they still cannot reach the set target, the company may impose sanction or fines.
The auditing/certification process is also prone to problems. The audit process by a third-party auditor commonly requires written proof in the verification process of principles and criteria. Silva-Castañeda found in her research that the demand for written evidence was very difficult to obtain when dealing with indigenous people, when their rights over land were expressed orally.
When there are two conflicting parties and one party cannot present written evidence, he would appear weak although he is not necessarily wrong. In practice, it is safer for auditors to accept written evidence as opposed to oral evidence.
A similar difficulty is found when an auditor faces labor cases such as child labor, discrimination against labor activists, sexual harassment, overtime work and other forms of labor-related offenses.
A third-party auditor rarely makes an unannounced visit. They notify companies ahead of time about their upcoming visits, as it is common practice or standard procedure for audits. Such procedure gives the company time to prepare and hide bad practices from the auditors.
If an audit is unannounced, the result should be more consistent with the reality in the company. Moreover, the audit time is typically very brief, which limits the chance to gather a comprehensive picture of working conditions in a plantation.
For certification by the Ethical Trading Initiative, for example, the process takes more than two months. In audits by the Fair Wage Foundation or Workers' Rights Consortium in the apparel and garment sector, they take even longer.
The same weaknesses may exist if other certification standards such as ISPO (Indonesia Sustainable Palm Oil) or Palm Oil Innovation Group are applied.
However, we could improve it by actively inviting trade unions as stakeholders to discuss principles and criteria relating to labor protection and decent work. Their involvement is necessary because of their experiences in organizing workers and their in-depth knowledge of labor laws and regulations. They can recognize violations at a practical level, which auditors cannot
To conclude, a revision to RSPO principles and criteria is a must. Any standards that affect the lives of people and workers should not be permanent.
In this case, RSPO needs to engage with trade unions, allowing them to revise RSPO principles, criteria and guidelines so that the standards achieved through certification suits the objectives desired by local and national stakeholders.
It is only through the dignified participation of trade unions that RSPO can make a difference in the transformation of oil palm plantation practices, in a sustainable manner.
The writer is a researcher with Paramadina University, Jakarta.
