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NGO alleges abuses at Indofood plantations

As consumers munch on one of PepsiCo or Indofood’s snack foods, workers in North Sumatra are allegedly suffering abuse as the companies strive to meet fantastically high palm oil production targets for their products, a report has revealed

Hans Nicholas Jong (The Jakarta Post)
Jakarta
Thu, June 9, 2016

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NGO alleges abuses at Indofood plantations

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s consumers munch on one of PepsiCo or Indofood’s snack foods, workers in North Sumatra are allegedly suffering abuse as the companies strive to meet fantastically high palm oil production targets for their products, a report has revealed.

In September and October 2015, a team of researchers interviewed 41 Indofood workers, examined workers’ documents such as pay slips, letters and work agreements and observed workers at work, their living conditions and plantation amenities.

The investigation was conducted by the US-based Rainforest Action Network (RAN) in two plantations operated by Indofood under its subsidiary plantation company PT PP London Sumatra (Lonsum) in North Sumatra.

RAN is an environmental organization that first gained prominence after succeeding in convincing Burger King to cancel US$35 million worth of destructive Central American rainforest beef contracts in 1987.

Indofood is one of the largest cultivators of oil palms in the world, the biggest food company in Indonesia and PepsiCo’s sole Indonesian partner.

The investigation exposed the alleged human suffering behind PepsiCo and Indofood’s foods, such as children working on the company’s plantations, unethically low wages and a lack of adequate health and safety measures.

“These findings show that the rights of workers on Indofood plantations are not being upheld in accordance with international labor norms or PepsiCo’s palm oil procurement policy,” RAN said in the report.

Most rights violations, the report argues, stem from the unrealistically high production quotas that Indofood imposes on it workers, forcing them to employ underage workers.

“Children were observed working on Indofood plantations. One 13-year-old worker and two 16-year-olds were interviewed, as well as one 19-year-old who claimed to have worked on the plantation since he was 12 years old,” RAN said.

These children worked indirectly for the company as workers’ assistants, helping harvesters collect loose fruits and meet their high quotas.

Indofood itself does not employ child labor. However, without their underage helpers, it would be next to impossible for Indofood workers to meet their quotas. Two harvesters, for instance, stated that their daily quota was 2 tons of fresh fruit bunches per day and another stated that he had to collect between 140 to 160 fruit bunches per day, each weighing 15 to 20 kilograms, totaling over 3 tons.

To meet the quotas, nine harvesters allegedly hired children or brought their wives or family members as assistants because it cost them less. One harvester, for example, paid a 16-year-old boy Rp 20,000 (US$1.50) a day, plus food and cigarettes.

“What adult would be willing to work for such low wages? [But] that’s all I can afford,” the harvester said as quoted in the report.

Indofood director Franciscus Welirang said the practice of hiring children to meet the high quotas was an acceptable part of Indonesian culture.

“Plantations in Indonesia are usually close to villages and thus there’s a plantation culture based on targets. It’s standard for families to ask for help [from their children],” he told The Jakarta Post.

According to Franciscus, however, this does not mean that Indofood condones the practice, since its policy explicitly bans the use of underage workers. “There’s a law in Indonesia and we are in compliance but there’s also a culture that cannot be perceived as the same as Western culture.”

Despite the workers having to pay children to assist them, they still receive unethically low wages; the report alleges that Indofood paid permanent and casual workers at one of the plantations below the district’s minimum wage.

At the time of the investigation, the monthly minimum wage was Rp 2,015,000, while the plantation provided a base wage of Rp 1,952,640 or sometimes less. The wage slips of five permanent workers revealed a base wage of Rp 1,761,037.

Casual daily workers and assistants, who are not provided with written contracts or wage slips, reported regularly making between 20 and 75 percent less than the district monthly minimum wage for permanent workers.

Franciscus said that if Indofood paid its workers below the minimum wage, it would have been reported.

“We have tens of thousands of workers so it would certainly be reported if we paid them less than minimum wage. We’re also a public company, so there’s no way we’re not following the minimum wage standard,” he said.

The report also found that Indofood did not provide adequate health and safety protection, with a number of female workers put at risk.

Franciscus said that some workers chose not to wear protective gear, such as gloves and masks, because of the heat.

In light of the findings, RAN urged PepsiCo to fix the loophole in its current policy by requiring that Indofood comply with all principles of its policy and work rapidly to remedy the labor violations outlined in the report.

Franciscus dismissed the allegations, accusing the group of bias against Indonesia’s palm oil industry. “They just want to sully Indonesia’s name. For us, it’s like, whatever. They’re blind to the reality of most Indonesians’ lives. RAN is funded by rich people and the report is very provocative,” he said.

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