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Labour, Indonesia and the Future of Palm Oil

One of the most significant current policy challenges to face global exporters is that of labour standards.

The current debate over labour standards is a complex mix, comprising several parts.

Developed country governments, facing inexpensive goods from other regions, are seeking new modes of protectionism, particularly when faced with uncertain economic conditions and voters seeking political assurances.

Developing countries – particularly emerging economies – are seeking to improve standards as a means of sharing prosperity. This means improving labour standards across the board.

There is, therefore, room to meet in the middle. Often this compromise is articulated in free trade agreements. But failing that, how do countries such as Indonesia make their case to developed economies in terms of their commitment to labour standards? How does Indonesia underline its commitment to raising standards for a commodity such as palm oil, which has been unfairly maligned in Western markets over labour standards?

The joint programs between Indonesia, the ILO and the US Department of State are a clear example of Indonesia’s commitment, specifically the ‘Advancing Workers’ Rights in Indonesia’s Palm Oil Sector’ program.

Most recently the joint program published a new guide for field-based labour inspections. What the guide attempts to address is some of the unique problems faced by labour inspectors working with oil palm plantations in the field.

But in doing so, it recognises some of the unique problems faced by the sector. It notes five challenges:

  • Logistical issues – the remoteness and size of plantations makes them difficult to inspect; time required to travel to locations is always a critical issue;
  • Limitations on data availability for the sector – which means that stakeholders are not always getting the full picture on the complexity of the issues faced by the sector;
  • Limited capacity and expertise – labour inspectors may not always be familiar with technical aspects in the sector;
  • Absence of a ‘holistic’ strategy – the diverse nature of the industry means that simply attempting to solve one problem may just create another;
  • Cultural context – there are elements to the industry as there are with all agriculture in Indonesia that might take place at the village level, where certain elements of work or responsibility overlap with village life.

Each one of these elements is important, but there has up to this point been a clear misunderstanding by many international stakeholders as to what labour in the palm oil sector actually looks like.

It has for too long been clouded by the work of campaign groups that are generally opposed to palm oil as an export industry.

There is a clear gulf between those opponents, and those who are actually on the ground seeking to effect change and improve the conditions – and lives – of workers in the sector.

There are also some significant parallels between the debate over deforestation and the best way to improve Indonesia’s deforestation rate.

Again, there was a clear division. One was a group of Indonesian NGOs, industry groups and policymakers that sought a consensus on the best way to reduce deforestation utilising national sustainable development approaches and using local stakeholders as a resource.  The other was foreign officials, NGOs and opponents of palm oil that sought to use trade bans as a means reduce deforestation.

Ultimately it was the former that was successful – and this is likely to be the same when it comes to labour rights: those who are seeking real change are already working towards it on the ground.

Developed country governments need to decide whether they want to actually improve the lives of workers around the world, or just appear to be doing something for their disgruntled voters.

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