Op-ed by Leena Ghosh, Head of Human Rights and Social Standards at the Roundtable on Sustainable Palm Oil.
The palm oil industry’s record on human rights is far from exemplary. With most plantations located in remote areas, their migrant workforces – both those who have crossed borders and internal migrants – may be isolated. This leaves them open to abuses like unfair pay and working conditions, or even forced labour.
A recent study by the Overseas Development Institute found that Indonesian migrant workers in Malaysia’s palm oil sector must work long hours for low pay with inadequate safety protection. Plantation owners regularly deduct money from their salaries – purportedly to cover costs like accommodation – meaning they often spiral into debt.
Moreover, in 2022, the Human Rights Commission of Malaysia found that eight out of every 1,000 workers in the country’s palm oil plantation sector were subjected to forced labour.
Meanwhile, there have also been numerous sector issues around the land rights of Indigenous people and local communities. For example, research found that in Latin America, land tenure concentration and violence against Indigenous communities were higher in oil palm municipalities.
If not done in a way that respects worker’s rights, oil palm expansion can cause community conflict, with potentially severe consequences.
A just and sustainable sector
Considering that palm oil is the most commonly used vegetable oil in the world and is found in half of all supermarket products – including everything from bread and pizza to pet food and cosmetics – these kinds of injustices must be addressed.
Despite the inherent complexity of palm oil supply chains, the only way to build a viable, sustainable and resilient sector is by ensuring the protection of workers’ and communities’ rights in and around every single plantation, mill and processing facility around the world.
That’s why on this UN World Day of Social Justice, on 20 February, we are calling on palm oil producers globally to go further and faster on human rights by committing to the newly revised Standards adopted by the Roundtable on Sustainable Palm Oil (RSPO) Members.
Co-created with stakeholders from every step of the supply chain – including producers, processors and traders, consumer goods manufacturers, retailers, banks, investors and NGOs – the standard has been enhanced to address the gaps identified between the 2018 RSPO Principles and Criteria (P&C) and the International Labour Organization 11 indicators of forced labour.
For the first time, the RSPO P&C requires that companies conduct human rights due diligence to identify existing and potential impacts on their own operations and those of their direct suppliers. They must then develop an action plan to tackle them.
When it comes to workers, it addresses issues of isolation, restriction of movement and excessive overtime. It also has new requirements to prevent and remediate forced labour and people trafficking. To assist, RSPO is developing supporting guidance for RSPO Members to implement human rights due diligence within their operations in alignment with evolving market and regulatory expectations.
Free, Prior and Informed Consent remains strongly embedded in the Standards, which protects the legal and customary rights of Indigenous peoples and local communities, while also respecting local rights-holders through creating equitable agreements between communities and plantations.
These new standards are based on the principle that transparency is key. Businesses need to be open about the hard-to-monitor working conditions in agriculture supply chains that crisscross continents. The only way forward is by being honest about their current challenges, so areas where it’s difficult to see what’s happening on the ground can be pinpointed and addressed.
A force for good
Despite its mixed reputation, palm oil can become a force for good. When done sustainably, the production of oil palm can help protect employees, communities, the environment and wildlife. The reality is that substituting palm oil with other vegetable oil crops is not a sustainable solution.
Oils like sunflower, soybean or rapeseed would create even bigger environmental and social challenges. The precise reason palm oil is so ubiquitous is because it’s so efficient. Globally, it produces about 35% of all vegetable oil on less than 10% of the land allocated to oil crops.
591,830 workers are currently represented under the RSPO P&C Certification; ensuring companies uphold these workers’ labour rights during recruitment, during work and in their living conditions. These standards are upheld by a variety of mechanisms.
For instance, the RSPO has an impartial and transparent Complaints System process that provides stakeholders with an avenue to address grievances and this process has provided remedy to upholding the rights of Indigenous and local communities. Ensuring opportunities for workers to report instances of workplace violations in an impartial way allows for better transparency across the supply chain.
Companies can change for the better. For example, Malaysian palm oil giant SD Guthrie, formerly known as Sime Darby Plantation, faced controversy a few years back due to allegations of forced labour at some of its plantations, which resulted in the US banning its imports. The company subsequently embarked on an in-depth assessment of its operations to find the problems and address them, as detailed in its Modern Slavery and Human Trafficking Statement.
Examples from SD Guthrie of the tangible improvements made include RM82.02 million ($18.5 million) set aside to repay “debt bondage” recruitment fees to current and past foreign workers. The company reviewed and tightened existing controls relating to foreign worker recruitment to ensure workers’ rights were protected.
Additionally, they created social dialogue platforms where workers elect representatives from every nationality to meet with estate management fortnightly and the introduction of controls for monitoring working hours through a process automation system to track the clock-in and clock-out time of workers.
An ethical future
Due to a history marred by instances of malpractice and consequent mistrust around how their operations impact workers and local communities around the world, oil palm growers need to transform their approach to human rights.
In such a labour-intensive sector that employs millions of workers and impacts so many Indigenous and rural communities, it must meet the highest social standards. With investor and consumer expectations around sustainability increasing and the ESG regulatory context tightening, it’s not only morally right but a key component of making the industry commercially viable into the future.
More information about the Roundtable on Sustainable Palm Oil can be found here.
