Improving Workers’ Lives Worldwide

ASSESSING FORCED LABORRISKS IN THE PALM OIL SECTORIN INDONESIA AND MALAYSIA
A research report by the Fair Labor Association
for The Consumer Goods ForumNOVEMBER 2018

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIATABLE OF CONTENTSEXECUTIVE SUMMARY ......................................................................................................................................................2
INTRODUCTION ...................................................................................................................................................................6
FINDINGS...............................................................................................................................................................................8
1. Heightened Attention on Labor and Human Rights Violations in the Palm Oil Sector ........................................................ 8
2. Forced Labor – Global Prevalence, Definition and Indicators................................................................................................... 10
3. Forced Labor Indicators in the Palm Oil Sector in Indonesia and Malaysia ............................................................................11
4. Forced Labor Indicators – Comparison with CGF’s Three Priority Industry Principles (3 PIPs)........................................16
5. Groups at Greatest Risks of Forced Labor......................................................................................................................................18
6. Underlying Causes of Forced Labor ............................................................................................................................................... 20
7. Recruitment and Employment Practices ........................................................................................................................................23
8. Regulatory Frameworks in Indonesia and Malaysia Relevant for Forced Labor Issues in the Palm Oil Industry .........26
9. Perception on Certification Schemes..............................................................................................................................................34
10. Companies' Internal Management Systems ................................................................................................................................... 37

OPPORTUNITIES FOR ACTION ..................................................................................................................................... 40
Stakeholders’ Suggested Solutions ...................................................................................................................................................... 40
Potential Partners with High Level of Influence ................................................................................................................................ 46

CONCLUSIONS .................................................................................................................................................................. 50

ANNEXES.............................................................................................................................................................................52
ANNEX 1: In-depth Literature Review ..............................................................................................................................................................................................52
ANNEX 2: Stakeholder Mapping ....................................................................................................................................................................................................... 53
ANNEX 3: Overview of ILO Conventions Ratified by Indonesia and Malaysia ................................................................................................................ 65
ANNEX 4: Palm Oil Supply Chain and Task and Risk Mapping ............................................................................................................................................. 66
ANNEX 5: Resource Documents .........................................................................................................................................................................................................71
ANNEX 6: Research Methodology and Limitations ....................................................................................................................................................................72

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAEXECUTIVE SUMMARY
Environmental concerns related to palm oil
production emerged in the early 2000s, but
it is only recently that conversations about thepalm oil sector have included social, labor, andhuman rights issues. As awareness grows aboutpoor working conditions and forced labor in thepalm oil sector, governments around the globe,
particularly in Europe, have taken notice andare exploring bans on the use of palm oil.

conditions, dependency on the employer(vulnerability), lack of protection by state/police, debt bondage, high recruitment fees,
and involuntary overtime at the palm oil estatesand in the supply chain were widely cited in bothcountries. The highest risk of forced labor wasdetermined amongst harvest and maintenanceworkers, notably those who apply pesticides
and fertilizers.

The increased attention to forced labor andworking conditions in palm oil supply chain
presents an important opportunity to increasetransparency and disclosure. The Consumer
Goods Forum (CGF) has selected palm oil
production as a focus area for implementationof its three Priority Industry Principles on
forced labor and commissioned the Fair Labor
Association (FLA) to conduct desk-based
research to assess the forced labor situation in
the palm oil sector in Indonesia and Malaysia,
two countries, which combined, account for the
majority of the palm oil used worldwide.

FLA’s analysis suggests that there aredifferences in the nature and root causes offorced labor in Indonesia and Malaysia, which
the report considers in depth. In Indonesia,
most workers come from other parts of thecountry to the palm oil producing regions ofKalimantan and Sumatra, regions with the mostpalm oil production. Here, forced labor can belinked to unrealistic production targets pushingfamilies (including children) to work alongside
hired workers; it can also be linked to low wages,
remote locations of plantations, limited mobilityof workers; and lack of contractual agreements.
In Indonesia, casual workers – workers who
work on a daily basis, or on a certain activity
for limited time period, without having regularor systemic hours of work or an expectation ofcontinuing work and work contracts – are mostvulnerable among the workforce. Stakeholderinterviews indicate that female workers areprimarily employed for casual work.

This
reportpresents
theaggregate
research findings, including analysis andrecommendations, and expands understandingof forced labor issues in the palm oil sector.
Furthermore, the report will inform CGF and
its work. The literature review, stakeholder
surveys and supply chain actors’ interviews
conducted for this research project haveidentified indicators of forced labor, revealed
likely causes, and shed light on systemic gaps
and challenges.
Research found that Indonesia and Malaysia
each show several indicators of forced labor as
elaborated under the ILO Conventions C029
and C105. Indicators of forced labor such as
coercive practices including threats, violence
and lack of clarity of employment terms andwww.fairlabor.org / www.tcgfsocial.com

In Malaysia, forced labor is linked mainly
to the use of foreign migrant workers fromother countries, including Bangladesh, Nepal,
India, Indonesia and Myanmar. Instanceswere reported of recruitment agencies andinformal brokers with irresponsible recruitment
practices, including deceptive communication
about terms and conditions of work, document(passport) retention, unsafe transit passages,
poor living conditions and workers’ facilities,2

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

and lack of enforcement of legal procedures.
In Malaysia, foreign migrant workers are mostvulnerable.
Stakeholder interviews highlight the multifaceted causes of labor and human rights noncompliances in the supply chain. These include
lack of regulation, non-enforcement of existinglaws, misuse of power, power imbalances in favorof the employers, and lack of judicial discourse.
Stakeholders reported that a lack of penalties
for violations of laws or ethical standards leave
employers and recruiters without impetus totake corrective actions. At the same time, poor
economic conditions, a lack of educational
opportunities, and limited means of alternate
income generation drive workers to accept
sub-optimal working conditions.
The use of recruitment and employment
agencies to engage and manage workers cancreate circumstances under which irresponsible
practices go unnoticed by employers, andworkers often have little recourse. Employers
often retain workers' documentation, anddeduct recruitment fees from wages. Workers
are rarely represented by unions or similarorganizations and therefore cannot benefit fromcollective bargaining. The systems that exist to
protect workers’ interests, such as judicial andnon-judicial grievance mechanisms, are weakor non-existent, and oversight mechanisms,
such as company audits and certification visits,
do not function in a way that identifies issues
or addresses the underlying causes. At best,
current audits focus on assessing conditions
at the worksite, but the research suggeststhat many forced labor issues occur during
the recruitment process and at the time ofwww.fairlabor.org / www.tcgfsocial.com

repatriation.
This report highlights the critical role CGF
can play in mitigating forced labor risks in the
production of palm oil by leveraging its industry
leadership to spur the collective action of its
members. There is strong interest for CGF tobuild on the foundation of its Priority Industry
Principles and guide and motivate member
companies and palm oil companies to embed
policies and procedures that identify andaddress forced labor. Key areas of opportunity
include:• Advocacy to the Indonesian and Malaysian
governments, companies and palm oilcompanies;• Fostering
multi-stakeholder
sectoraldialogue, and regional collaboration andcapacity building of members;• Research on migration corridors, practicesof recruitment agencies and labor brokers,
worker demographics, and knowledge
sharing among CGF members, supply chain
actors, and others;• Improvementofexisting
assessment
methodologies;• Improvementofexisting
certification
schemes, grievance mechanisms, and forcedlabor standards; and• Ensuring commitment to address forcedlabor from CGF members and their suppliers.

3

www.fairlabor.org / www.tcgfsocial.com*Please note that this is a very simplified version of the palm oil retailer supply chain and is representative of the food supply chain. Additional steps for personal careand hygiene products include further processing by oleochemical companies before distribution, wholesale or ingrediant manufacturing.

Fully integrated palm oil supply chains are uncommon. Bulk oil is commonly traded between origin mill and destination refinery / processing.

Palm Oil Retailer Supply Chain*

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

4www.fairlabor.org / www.tcgfsocial.com

Fully integrated palm oil supply chains are uncommon. Bulk oil is commonly traded between origin mill and destination refinery / processing.

Palm Oil Supply Chain Additional Steps

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAINTRODUCTION
Palm oil and palm kernel oil are foundworldwide in many consumer and industrial
products, including food and beverages,
personal care and beauty products, bioenergy
and fuel, animal feed, pharmaceuticals,
industrial activities, and the food service
industry. The largest national importersof palm oil in 2016 were India (32%), theEuropean Union (21%), China (16%) andPakistan (10%). The United States, at four
percent, is the seventh leading consumer ofpalm oil. Indonesia and Malaysia are the mostimportant palm oil producing countries, witha combined production of 87% of worldwide
palm oil production1.
In January 2016, The Consumer Goods
Forum (CGF) adopted a resolution to “strive
to eradicate forced labor through collective
action.” CGF identified and adopted three
Priority Industry Principles on Forced Labor2(Box 1) to assist its member companies inprioritizing actions within their supply chainsand operations to address the drivers offorced labor. CGF selected palm oil as one of
two focus areas for its members to implement
and pilot the principles3.
The Palm Oil Social Task Force, a sub-groupof the CGF Palm Oil Working Group, leads
the development of the work stream on
forced labor risks in palm oil. The Task Forcecommissioned the Fair Labor Association(FLA) in 2017 to examine the forced laborrisks in the palm oil sector in Indonesia andMalaysia.

It is widely understood that the palm oil
supply chain is complicated, involving
suppliers, processors (kernel crushers, mills,
and refineries), aggregators, intermediaries,
plantations and thousands of smallholder
farmers, making it long and opaque. To better
understand palm oil production and systemiclabor issues, CGF charged the FLA researchteam to address two objectives as part of
CGF’s approach to operationalize its forcedlabor Priority Industry Principles (Figure 1).

BOX 1: CGF Priority Industry
Principles on Forced Labor
Preamble
Forced labour is a term that covers a number of different
situations and there are various contributory factors
and behaviours that may interact to create situationsof forced labour. The CGF has identified three of themost problematic, yet often common employment
practices across the world that can lead to cases offorced labour. To counter these three practices, wehave produced the Priority Industry Principles, which
could help lead to the necessary changes to eliminate
forced labour. Our members will work to uphold thesepractices in their own operations and will use theircollective voice to promote the adoption of thesepriority principles industry-wide.
1) Every worker should have freedom of
movement. The ability of workers to move freely
should not be restricted by the employer throughphysical restriction, abuse, threats and practices
such as retention of passports and valuable
possessions.
2) No worker should pay for a job. Fees and costs
associated with recruitment and employment
should be paid by the employer.
3) No worker should be indebted or coerced towork. Workers should work freely, be aware of
the terms and conditions of their work, and paid
regularly as agreed.

1 http://www.palmoilanalytics.com/files/epos-final-59.pdf, Top 10 palm oil
producers and consumers by country, 2016.
2 For more information: https://www.theconsumergoodsforum.com/initiatives/social-sustainability/
3 As part of the implementation of the CGF resolution on forced labor, CGF members have committed to uphold the Principles in their own operations
and use their collective voice to promote their adoption industry-wide, with an initial focus in two supply chains of particular relevance to the industry:
seafood and palm oil in Southeast Asia.

www.fairlabor.org / www.tcgfsocial.com

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

PHASE 1:UNDERSTAND

PHASE 2:ANALYZE

PHASE 3:
DEVELOPACTIONS• Identify key
stakeholders• Obtain data/
perspective onrisks and drivers• Understandstakeholders'current/future
activities• Benchmark
standards• Assess gaps inknowledge andfuture activity• Analyze
opportunities
and barriers• Determine
critical role
CGF can play

• Draft actions• Consult/build
support foractions withstakeholders• Develop work
streams/
partnerships todeliver actions

FIGURE 1: CGF’S PHASED APPROACH TOWARDS OPERATIONALIZING THE PRIORITY INDUSTRY PRINCIPLES ON FORCED LABOR• Objective 1: To conduct a stakeholder mapping
and to understand from stakeholders thefollowing: the extent of forced labor risks
within palm oil supply chains and how theyvary according to geographical location,
primary drivers and root causes of forced labor,
and activities undertaken by stakeholders toaddress forced labor.

• Objective 2: To analyze the opportunities andgaps and determine the role CGF can playin supporting or adding to these activities,
particularly through supply chain partners.

a comprehensive literature review covering
human rights issues and palm oil production,and information gathering about labor
recruitment and employment practices in
the palm oil sector from stakeholders. Online
surveys and individual telephone interviews
were conducted among three stakeholder
groups: international and local civil society
and non-governmental organizations, CGFmember companies (including retailers andmanufacturers), and supply chain actors(including suppliers processing, producing
and trading palm oil). See Annex 6 for details
on the FLA’s research methodology.

The scope of the FLA research project includedwww.fairlabor.org / www.tcgfsocial.com

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAFINDINGS
The findings derived from the research are presented here, divided into 10 topic areas. Each topic
collates information gathered across the literature review (September-October 2017), the online
surveys and the interviews (February - September 2018).

1. Heightened Attention on Labor and Human Rights
Violations in the Palm Oil Sector
Sustainability issues involving palm oil have cometo public attention through issue advocates andnews coverage over the past 15 years. The result
is greater consumer awareness about adverse
impacts of large-scale, poorly managed palm
oil production on the environment and on local
populations4. In 2004, industry representatives
came together to address issues such as

deforestation, use of peatlands, violation ofland rights, and indiscriminate use of pesticides
and chemicals in a systematic manner byforming the Roundtable for Sustainable Palm
Oil (RSPO)5. As part of the RSPO Certification
System, independent auditors have been
conducting certification visits at all tiers of thepalm supply chain since 2008. Over the past
decade, several companies have begun efforts
to stop deforestation and the development ofpeatland.
The environmental impacts of palm oil
production have garnered much of the interest
among those concerned about sustainability;
labor and human rights issues have been
muted by comparison. Still, RSPO accredited
auditors have been criticized for lacking
labor rights assessment expertise and fortheir reports mainly focusing on assessing
environmental benchmarks6. At the time ofthis study, a complaint was filed with the OECDby the Indonesian community rights group
Transformation for Justice (Tuk Indonesia)
against the RSPO, alleging breach of the OECD

4 https://www.palmoilandfood.eu/en/faq-what-palm-oil
5 https://rspo.org/about . In 2001, WWF started exploring an idea of aroundtable on sustainable palm oil that resulted in an informal cooperation between Migros, Unilever, Aarhaus United UK Limited and Malaysia
Palm Oil Association. In 2003 at the inaugural meeting 47 organizations signed the Statement of Intent. In 2004, the RSPO was formallyestablished and in 2005, the RSPO Principles and Criteria (P&C) wereformally established for an initial pilot implementation by 14 companies.
6 https://eia-international.org/wp-content/uploads/EIA-Who-Watches-theWatchmen-FINAL.pdf

www.fairlabor.org / www.tcgfsocial.com

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Guidelines because of improperly handling thecomplaints of local inhabitants of Kerunang andEntapang villages in West Kalimantan whose
land rights had been impacted by a palm oilcompany7.
It is only recently that palm oil buyers andproducers have become sensitized to theworking conditions and issues related to thelivelihoods of workers in the palm oil supply
chain8. New research and advocacy campaigns
have highlighted labor issues in the palm oil
sector, including forced labor, human trafficking,mental coercion, unrealistically high production
quotas, abuse of vulnerable workers, low wages,
deceptive behavior by employers, penalities,
lack of contracts, child labor, health and safety
risks and lack of freedom of association9.
In January 2018, the European Parliament
adopted a long-term comprehensive energy
plan that, inter alia, foresees a ban on the use ofpalm oil in biofuels by 2021. While the proposal
must be approved by other EU bodies andmember states to come into force, it has raised
warning flags in Indonesia and Malaysia10. A
recent article11 explains that palm oil-producing
nations are worried about the 650,000 palm oil
smallholders in Malaysia and their livelihoods,
as 15.2% of Malaysia’s palm oil exports go to the
EU. A similar situation is expected for Indonesia,
where smallholder farmers account for 40% of
palm oil production.

7 https://www.oecdwatch.org/cases/Case_491, 23 January 2018
8 http://www.foodingredientsfirst.com/news/palm-oil-buyers-and-producers-take-collective-action-to-improve-labor-conditions.html, 16 November 2017
9 “The Human Cost of Conflict Palm Oil Revisited. How PepsiCo, Banksand the Roundtable on Sustainable Palm Oil Perpetuate Indofood’s
Worker Exploitation”, Oppuk, Rainforest Action Network and ILRF,
November 2017. https://laborrights.org/sites/default/files/publications/
Human_Cost_Revisited_0.pdf
10 https://www.reuters.com/article/malaysia-palmoil-eu/european-moveto-ban-palm-oil-from-biofuels-is-crop-apartheid-malaysia-idUSL3N1PD1NJ
11 http://www.straitstimes.com/asia/se-asia/european-ban-on-palm-oilin-biofuels-upsets-jakarta-kl

www.fairlabor.org / www.tcgfsocial.com

The conditions under which palm oil is produced
is likely to be a topic of further scrutiny among
legislators and regulatory bodies of importing
countries, that already have taken steps toward
transparency and regulation of supply chains(Box 2).

BOX 2: Emerging Legal
Frameworks in Supply Chain
Greater public disclosure of the human rights conditions
embedded in global supply chains is rapidly becoming
the norm for multinational companies managing complex
sourcing relationships around the world. While for somecompanies increased supply chain transparency may be
the logical result of a maturing sustainability program,external pressures from civil society, governments andcustomers, including emerging regulations that carrysignificant legal and financial risks, are also clearly
driving this shift in industry norm for everybody.
Worldwide, countries -- including the UK, France,
Germany, the Netherlands, and the USA – are enacting
legislative and regulatory frameworks requiring
multinational companies to trace their supply chains andbe transparent about the effect of their business practices
on human rights. These frameworks do not differentiate
between “tiers” of responsibility for companies but
consider that a company’s responsibility extends
throughout its supply chain. Under these laws, failure
to exercise adequate due diligence across the supply
chain could lead to financial penalties and operational
challenges, such as goods being excluded from entry or
seized at the border.
Civil society organizations are increasingly focusing
on companies’ traceability and transparency efforts,
recognizing those with stronger public transparency
commitments, and pushing for those with less robust
commitments to catch up. Expectations have shifted
for multinational companies wishing to be recognized
as social responsibility leaders, and the question is nolonger whether a company should trace and disclose
information about its supply chain, but how muchinformation a company will disclose and against which
standards its disclosures will be measured.

Full article available here
http://www.fairlabor.org/sites/default/files/images/
supply_chain_traceability_and_transparency_
june_2017.pdf

9ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

2. Forced Labor — Global Prevalence, Definition and Indicators
The International Labour Organization (ILO)
and Walk Free Foundation in a 2017 publication
estimated that 25 million people globally are
subject to conditions of forced labor12. Onequarter of forced laborers are believed to be
children. At least half of forced laborers are
considered to be affected by debt bondage
imposed by the private sector13.
Forced labor manifests itself differently by
work setting, country, and supply chain. The
FLA monitors forced labor in agriculturalcommodities and has identified that forcedlabor indicators may differ based on thefollowing:1) type of labor (family, hired, migrant, local,
casual, seasonal);
12 In addition to 25 million in forced labor conditions, 15 million are inforced marriage.
13 http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_575479.pdf

2) labor recruitment practices (direct, throughintermediaries or hired by family);3) type of workplace (small farms, plantation or
factories);
relations(betweenthe4) employment
employer and workers and determination of
who the legal employer is);5) workplace practices; and6) political climate (in some cases).
A single indicator may not conclusively point
toward forced labor; instead it may be moremeaningful to examine a combination ofindicators. For example, when taken together,several recruitment and workplace practices(such as loan advancements, extraction ofrecruitment fees, withholding of personal
documents, lack of contractual agreement,
involuntary excessive working hours, irregular
payment of wages, inability of workers to egressfrom facilities, etc.) may collectively point
toward forced labor, while a single indicator
might not.

BOX 3: ILO Definition and Indicators of Forced Labor
Forced labor can be understood as work that is
performed involuntarily and under the threat of penalty.
It refers to situations in which persons are coerced towork through violence, intimidation, or by subtle means
such as manipulated debt, retention of identity papers, or
threats of exposure to immigration authorities.

••

In addition, depending on context, some additional forcedlabor indicators are:

ILO defines the following main 11 forced labor indicators:

•
•

•
•

•
•

•
•
•
•
•
•
•

Abuse of vulnerability
Deception (about nature of work or compensation orother work-related conditions)
Restriction of movement
Isolation
Physical and sexual violence
Intimidation and threats (of violence and punishment)
Retention of identity documents
Withholding of wages
Debt bondage

www.fairlabor.org / www.tcgfsocial.com

Abusive working and living conditions
Excessive overtime

•
•
•
•
•

Recruitment fees
Abduction or confinement during the recruitment
process
Sale of the worker
Removal of rights or privileges (for example
promotion)
BlackmailDenunciation to authorities
Limited freedom of communication
Penalties
Induced or inflated indebtedness (e.g. when an
employer provides housing, food etc. at inflated
prices)10

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAILO specifies 11 indicators of forced labor14 (Box3) and has defined operational indicators of
trafficking of human beings15. ILO guidelines,“Hard to see, harder to count,” provide an
overview of quantitative surveys and tools tomeasure prevalance of forced labor16. Variousorganizations have further categorized these
indicators to clarify and operationalize them17.

16 http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/
documents/publication/wcms_182096.pdf
17 For e.g. Human Resources Without Borders (RHFS) has classified these indicators in four series, (1) Free and informed consent, (2)Constraint, (3) Isolation, (4) Freedom of Movement. Risk of forced labor
occurs when at least one of the ILO indicators is found in each category.
For more information visit http://rhsf.emerit.net/un/ or http://www.rhsansfrontieres.org/guide-travail-force/home

14 http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/
documents/publication/wcms_203832.pdf
15 http://www.ilo.org/wcmsp5/groups/public/@ed_norm/@declaration/
documents/publication/wcms_105023.pdf

3. Forced Labor Indicators in the Palm Oil Sector inIndonesia and Malaysia

Recruitment requirements violating human rights
Dependency on employer/vulnerability
Low wages
No protection by state/police
Remote area/isolation/limited mobility
Lack of contractual agreement
Use of migrant labor
Lack of freedom of movement
Involuntary overtime
No realistic work targets
Wage deductions
Non-regular payment of wages
Disciplinary practices
Document retention
Lack of communication of terms and conditions
Violations by employment agencies
Recruitment fees
Coercive practices (threats and violence)
Debt bondage

3

3
4

3
5

4
5

3

5

8
6

1

3

8
4

3
4

3
8
2
4

3
2

6

1

3

7

1

7

3
3

5
4

2
4
2
0

Indonesia (13)

6
4
5

10

15

Malaysia (11)

FIGURE 2: PUBLISHED LITERATURE ON PALM OIL REVEALS FORCED LABOR INDICATORS IN INDONESIA AND MALAYSIA

The literature review revealed leading
indicators of forced labor in Indonesia (Box 4)
and Malaysia (Box 5). Coercive practices, suchas threats and violence, and a lack of clarity of
employment terms and conditions were notedin the literature and common in both countries.
High productivity targets and workers’ inability
www.fairlabor.org / www.tcgfsocial.com

to meet those targets is a problem in Indonesia(62%) and Malaysia (55%), according to theliterature. Payments based on piece rate andunrealistic production targets make it difficult
for workers to earn a decent wage. Therefore,
workers involve their family members or otherhelpers as unpaid assistants to meet production
quotas and reach the minimum wage.
11

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

BOX 4: Indonesia—Top forcedlabor indicators (literature review)

BOX 5: Malaysia—Top forcedlabor indicators (literature review)

1.

1.

2.
3.
4.
5.
6.

Unrealistic production targets and piece rate system
required to meet the minimum wage.
Lack of freedom of movement, especially because of
the remoteness of the work locations (plantations).
Lack of contractual agreements with workers mostly
employed as casual workers.
Low wages.
Coercive practices, such as threats and violence that
result in wage deduction or termination of contracts.
Dependency on the employer, including for getting
or keeping work, making the workers vulnerable toabuse (also often mentioned as coercive practices).

Forced labor in Indonesia is attributed to factors
including the remote locations of its plantations,the limited mobility of workers, and a lackof contractual agreements. It is common inIndonesia for internal migrants to pay powerful
local middlemen in the village (the “calo”) who
recruit workers for agencies or companies. The
middlemen charge a fee to both workers andrecruitment agencies18.
In Malaysia, forced labor indicators are related
to the use of foreign migrant workers, a lack

2.
3.

4.
5.

Use of foreign migrant workers as they are in themost vulnerable situation.
Document retention, especially of passports andidentity papers.
Deceptive practices by employment agencies in
the form of false promises and wrong information
communicated to new recruits about employment
terms and wages.
Unrealistic production targets required to meet theminimum wage.
Coercive practices, such as threats and violence that
result in wage deduction or termination of contracts.

of communication of terms and conditions(deception of work), and document retention.
The highest risk of forced labor appears to
be for workers involved in harvesting, farm
maintenance work, and the application ofpesticides and fertilizers.

18 Reported by Human Resources Without Borders (RHFS) and Tenaganita during report review, based on their experience in the region.

Stakeholders’ Views on Indicators in Indonesia
Building upon the literature review, a surveyof stakeholders probed the differences in theindicators of forced labor. Unrealistic production
targets were the most commonly-stated problem
stemming from palm oil worksites, according tostakeholder interviews. Interviews revealed thatworkers who do not meet production quotas
face wage deductions and that, similar to thefindings of the literature review, workers often
bring other unpaid workers, such as children, tomeet high production targets.

www.fairlabor.org / www.tcgfsocial.com

The lack of a short-term or permanentcontract appears to be common practice in
the Indonesian palm oil sector, despite the factthat workers are employed over long periods oftime. The Indonesian industry, stakeholders said,
employs a large number of informal workers
on a daily basis (casual workers) and does notprovide benefits or job security. According tostakeholders, the land from local inhabitants wasconverted into oil palm plantations which has
left them dependent on work at the plantationsand vulnerable to potential labor violations. The
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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAINDONESIA
Lack of freedom of movement
Sub-standard workers’ accomodation and facilities
Lack of EHS protection
Coercive practices (threats and violence)
Lack of regulations, enforcement or legal proceduresChild labor
Involuntary overtime, unreasonable working hours
Lack of verification & screening (e.g. age, identity)
Lack of decent wages/low wages
Lack of communication about work terms, conditions& rights
Lack of contracts and/or lack of permanent contracts
Unrealistic work targets
0

2

4

6

8

10

12

14

16

18

FIGURE 3: THE FREQUENCY OF FORCED LABOR INDICATORS IN INDONESIA MENTIONED IN STAKEHOLDER INTERVIEWS (N=23).

lack of an identity card (ID) is another barrier topermanent employment. When a worker does
not have an ID card, their employer cannot
register them for social insurance, which ismandatory for permanent workers.
Communicationofemployment
terms,
conditions, and rights are often insufficient in
the palm oil sector in Indonesia. Many casual
workers have no information about theirrights and conditions of employment. It is
common practice, according to a local CSO,
for companies to use labor brokers to recruit
workers, and these middlemen often do notcomply with legal requirements in spite of beingfrom the local community. Several reported
cases revealed no written contracts articulating
the terms of employment for workers.
Stakeholders in Indonesia said low wages area forced labor indicator. Low wages are linked
to the production quota system, which requires
workers to collect a large number of fresh fruit

www.fairlabor.org / www.tcgfsocial.com

bunches to be able to receive a minimum wage
(often below a living wage). Involuntary overtime
and unreasonable working hours are mentioned
frequently. Involuntary overtime is practiced on
palm estates as well as in processing mills. Mills
may operate 24 hours a day with two to three
shifts. A labor shortage can create a situation
where existing workers are compelled to workovertime. Two stakeholders mentioned thatworkers may be willing to work overtime to beable to earn more and repay debts incurred
during recruitment. Nevertheless, consent may
not be free and workers are pressured to workovertime without appropriate compensation.
Lack of age verification is also a concern leading
to child labor. Stakeholders believe that there isinsufficient monitoring of age which is important
given certain factors – middlemen recruiters,
piece rate systems and high production targets– that seem to encourage the involvement ofunderage family members or other helpers.

13

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

The following other forced labor indicators
were mentioned by stakeholders : (a) lack ofregulations, enforcement or legal procedures;(b) child labor; (c) coercive practices (threats
and violence); (d) sub-optimal worker
accommodations and quality of facilities; and(e) lack of freedom of movement for workers

residing in the worker accommodations. One
stakeholder commented that it is important
to include degrading living conditions as anindicator of forced labor, and that auditors are
not paying attention to the living conditions ofworkers. Insufficient access to potable water
was mentioned by three stakeholders.

Stakeholders’ Views on Indicators in Malaysia
Stakeholder interviews, in concurrence withthe literature, identified employer document
retention as common practice in Malaysia. It isa concern when workers are not allowed freeaccess to their identity papers. It is particularly
worrisome for foreign workers who aredependent on their employer for their passport
and work permit.

than turn out to be the case in reality. This
deception about the nature of work, combinedwith having no possibility to resign (because
management retains their passports), makes
the workers vulnerable. Payment of recruitment
fees by workers is no longer allowed, but still
occurs19, according to stakeholder interviews.
Fees incurred include those paid to a recruitment
agency (in both the country of origin and thedestination), but also transportation costs,
medical examinations, registration in Malaysia’sCommunicationofemployment
terms,
conditions and rights is handled mostly
by recruitment and employment agencies,
according to interviews. Frequently, workers arepromised better wages and working conditions

19 http://www.rhsansfrontieres.org/en/press/our-press-opinion/329article-malaysia-forced-labour

MALAYSIA
Use of migrant labor
Wage deduction (incl. unpaid leave)
Coercive practices (threats and violence)
Lack of freedom of movement
Lack of contracts and/or lack of permanent contracts
Dependency on employer/vulnerability
Lack of regulations, enforcement or legal proceduresSub-standard workers’ accommodation and facilities
Recruitment fees
Lack of communication about work terms, conditions& rights
Document retention
0

2

4

6

8

10

12

14

FIGURE 4: FORCED LABOR INDICATORS IN MALAYSIA MOST FREQUENTLY MENTIONED BY STAKEHOLDERS (N=23)

www.fairlabor.org / www.tcgfsocial.com

14

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

biometric system, visas and work permits. The
cost of fees varies based on country of origin,route to Malaysia, and recruitment agency;
stakeholders also explained that it is difficult to
get a good understanding of the recruitment
practices because processes are often “hidden”
by the disjointed system.
Worker accommodation and facilities, including
health care and education for family members,
were mentioned by stakeholders to be poorly
managed and even degrading. Because mostplantations are in remote areas, workers
are highly dependent on the facilities at theworksite, including shops and financial services.
Stakeholders said a lack of regulations, lack ofenforcement of those that exist, and limited
legal procedures contribute to an environment
in which forced labor can exist and remain
undetected. Regular monitoring by labor
inspectors at the upstream production andworksites does not occur or occurs insufficiently.
Remote worksites make monitoring difficult.
Stakeholders reported that due to immigration
regulations and withholding of passports,

workers cannot change employers or change
employment. If workers leave their employer,
they become illegal and are at risk of beingharassed and arrested by the police. Additionally,
there are limited functional international
instruments20 on fair recruitment practices orinternational labor inspection systems that canmonitor ethical recrutiment, or repatriation
activities.
Other forced labor indicators mentioned bystakeholders include: (a) lack of contractual
agreements and/or permanent contracts; (b)lack of freedom of movement for workers
residing in workers’ accommodations; (c)coercive practices (such as threats andviolence); (d) wage deductions (including
unpaid holidays); (e) debt bondage; and (f)work in remote areas, isolation and limited
mobility of workers.

20 E.g. See International Organization of Migration (IOM)’s Integrated
Recruitment Integrity System (IRIS) https://iris.iom.int/

Palm Oil Companies’ Views on Forced Labor Indicators
For the purposes of this project, companies orbuying companies are defined as interviewed
CGF members who are composed of retailers
and manufacturers. Palm oil companies
are defined as enterprises or corporations,
who are involved in the processing, and/or
production of palm oil and may also own oilpalm plantations and processing units. This
also includes refiners, mills and smallholder
farmers. They do not include any intermediaries
who are only involved in the trading of palmoil.
Palm oil company survey respondents wereasked which forced labor indicators21 they
www.fairlabor.org / www.tcgfsocial.com

consider important. All five respondents
selected debt bondage or coercion to work22,
and involuntary/excessive overtime. Four
respondents selected irregular payment ofwages, lack of contractual agreement, anddependency on employer/vulnerability as

21 A list of 16 options was provided and allowed for the opportunity to add
more.
22 One respondent explained that in several areas and processes where
there is lack of workers, migrant workers (AKAD) are used to temporarily
supply the workforce. These migrant-workers are vulnerable to forced laborin the forms of debt-bondage and with limited labor protection. The largest
risk in the supply chain is with harvesting which is the backbone of production. Debt-bondage is a big challenge; it requires workers to work for to pay
their debt or part of their debt-installment to employers/recruiting agents.

15

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

forced labor indicators. Three respondents
chose no freedom of movement, document
retention, wage deductions, and inability ofworkers to access facilities.
Other indicators, not selected as suggesting
forced labor by a majority of palm oil company

respondents include dependency of workers
on employers for basic needs and facilities,
excessive production targets, payment of
recruitment fees, disciplinary measures, useof migrant workers, remote working areas/
isolation, and lack of annual leave and/or sickleave.

4. Forced Labor Indicators — Comparison with CGF's
Three Priority Industry Principles
The Consumer Goods Forum promotes three
Priority Industry Principles (PIPs) on Forced
Labor23.
1) Every worker should have freedom of
movement. The ability of workers to movefreely should not be restricted by theemployer through physical restriction, abuse,
threats and practices such as retention of
passports and valuable possessions.
2) No worker should pay for a job. Fees andcosts associated with recruitment andemployment should be paid by the employer.
3) No worker should be indebted or coerced
to work. Workers should work freely, beaware of the terms and conditions of theirwork and paid regularly as agreed.

www.fairlabor.org / www.tcgfsocial.com

Six
CGF
industrymembercompanies
participated in the research. Four of thesix companies indicated that they use the
CGF Principles; two did not respond to thequestion. Companies reported awareness ofother forced labor standards, as well, including
the UN Declaration on Human Rights24, ILO
Standards25, the UN Global Compact26 and the
UN Sustainable Objective 8.727

23 https://www.theconsumergoodsforum.com/initiatives/social-sustainability/key-projects/priority-industry-principles/
24 http://www.ohchr.org/EN/ProfessionalInterest/Pages/ForcedLabourConvention.aspx
25 http://www.ilo.org/global/standards/subjects-covered-by-internationallabour-standards/forced-labour/lang--en/index.htm
26 https://www.unglobalcompact.org/take-action/action-platforms/decentwork-supply-chains
27 http://indicators.report/indicators/i-57/

16

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

9
8
7
6
5
4
3
2
1
0
Use ofLack ofmigrant labor contractual
agreement

Difficulty tofind workers

Trafficking

Lack of
Remote area/ Limited access Dependency No protections Low wages Dependency Recruitment
on employer/ requirements annual leaveon employer
isolation/by state/
to basic
violating and sick leavevulnerability
policelimitedfacilities for basic needs
human rights
and facilities
mobility

Indonesia (13)

Malaysia (11)

FIGURE 5: FORCED LABOR INDICATORS MENTIONED IN THE REVIEWED LITERATURE AND STAKEHOLDER SURVEYS THAT CAN BE
ELABORATED UNDER THE CGF'S THREE PRIORITY INDUSTRY PRINCIPLESTABLE 1: FORCED LABOR INDICATORS THAT ARE RELEVANT FOR THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA.
Forced Labor Indicators from the Lliterature Review and Stakeholder Feedback(Note ILO’s Guidance on Strong and Medium Indicators)28

Use of migrant labor
Lack of contractual agreement
Trafficking
Prison labor
Remote locations and limited mobility of workers
Limited access to basic facilities (water, toilet, medical)
Dependency on employer for basic amenities and services
No protection by state or police
Low wages/in-kind payments
Lack of social security benefits, annual leave and sick leave
Unreasonable production targets
Involuntary overtime/excessive working hours
Spouse and (adult) children of hired workers allowed or required to work to meet production targets
Wage deductions (including unpaid holidays)
Lack of EHS protection
Unjust disciplinary practices
Poor worker accomodations
Company stores (with inflated prices)
Forced to work long hours due to labor shortage in the region
Deception about working conditions during recruitment
Unsafe transportation of workers
28 https://www.ilo.org/wcmsp5/groups/public/@ed_norm/@declaration/documents/publication/wcms_105884.pdf

www.fairlabor.org / www.tcgfsocial.com

17

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Coercive security measures
Verbal abuse and threats and violence
Other internal management system related gaps companies and suppliers should be aware of:Lack of forced labor policy and indicators
Lack of communication about forced labor policy to upstream suppliers
Lack of monitoring and social impact assessements on forced labor indicators
Lack of monitoring of the legal status of recruitment agencies
Lack of awareness amongst workers on their legal rights
Lack of grievance mechanisms
Lack of screening and verification of workers (age) before recruitment
Other macro-indicators that impact forced labor in a country/region:
Presence of child labor and its relation to forced labor
Lack of representative worker unions and freedom of association
Lack of protection for pregnant women and maternity rights
Lack of regulations, enforcement or legal procedures
Harrassment of advocates for human rights and environment
Land rights violations/conflicts
Food insecurity/lack of access to potable water
Lack of educational opportunities, day care, and child protection
Lack of alternative/diversified livelihoods

5. Groups at Greatest Risks of Forced Labor
The research identified specific populations
vulnerable to forced labor in the palm oil
sector. In Indonesia, casual workers and internalmigrants are the groups in the workforce most
predisposed to forced labor risk. In Malaysia,
foreign migrant workers have the highest
degree of vulnerability to forced work. Withinthese groups, female workers and children havehigh degrees of vulnerability, according to theresearch.
WOMEN
Female workers are engaged mainly in casual
work and are highly vulnerable to abuse andare subject to the worst conditions among
all palm oil workers, accordng to stakeholderinterviews. The literature reports that female
workers are mostly engaged in the applicationof fertilizers and pesticides, tasks associatedwith considerable health risks.

www.fairlabor.org / www.tcgfsocial.com

Four stakeholders stated that because of workwith local partners they were aware of reportsof women forced to grant sexual favors to geta job or to keep it. No information on this wasfound in the literature, but often women do notwish to share instances of sexual harassmentwith researchers.
CHILDREN
Children who work in the palm oil sector doso mostly to help parents meet their daily
production quota, according to publishedstudies. Stakeholders said that parents ask
their children or other family members to
help because production targets are high anddifficult to achieve.
Work by children was more frequently
mentioned as a research finding in Indonesia,
where it is related to low wages, high18

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

production targets, piece rate systems, limited
alternate livelihood opportunities and a lack of
educational opportunities. Because a parent
is not able to meet production targets or earnsufficient wages for a decent living standard, it
is widely understood that they work overtimeand let their children and/or other family
members work alongside them to meet targets
or to undertake additional harvesting to get
premiums.

with family members, or they are not permitted
to enter the country with family members.
However, some migrants stay illegally in
Malaysia for long periods of time, settle, andhave families. The children of these workers
may be vulnerable to forced labor because as
undocumented individuals, they cannot accessgovernment services such as public education.
Without citizenship and the opportunities it
affords, the best option appears to be working
illegally on smallholders’ farms or on plantations.

In Malaysia, the research suggests there arefewer instances of child labor. One reason forthis may be that migrant workers do not travel

20
18
16
14
12
10
8
6
4
2
0

Casual workers

Migrant workers
Indonesia

Children

Women

Malaysia

FIGURE 6: THE FREQUENCY OF REFERENCES TO VULNERABLE GROUPS BY STAKEHOLDERS

BOX 6: Other most frequently-reported labor rights violations
While the research focus was forced labor indicators, other labor rights violations arise frequently in Indonesia andMalaysia. (In the order of frequency):
1.
2.
3.
4.
5.
6.
7.
8.

Health and safety issues
Presence of child labor
Lack of freedom of association and collective bargaining
Harassment of human rights and environmental advocates
Food insecurity
Land rights violations and conflicts
Lack of educational opportunities
Lack of alternative and diversified livelihoods

www.fairlabor.org / www.tcgfsocial.com

19

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

6. Underlying Causes of Forced Labor
Stakeholders’ Views on Causes of Forced Labor in Indonesia
Stakeholder interviews revealed some of theunderlying causes of forced labor in Indonesia.
More than half of survey respondents (14 of
23), identified weak government institutions
and enforcement systems29 as a cause ofpoor working conditions and forced labor in
the Indonesian palm oil sector. Respondents
reported a lack of regular labor monitoringat the plantations and limited enforcement ofworkers’ rights laws. Respondents said thatthey see an environment in which companies,
suppliers, and plantation management feelthat they can “get away” with non-compliancebecause there is no prosecution of violations –even those that are clearly documented.

work and the resulting poverty are the norm,
according to respondents. Stakeholders said
palm oil companies have consolidated small
land holdings and converted the land toplantations thereby reducing opportunities togrow food or generate income for individuals
who were once land owners. Few options
for work exist in remote areas, and limited
educational opportunities leave the majority
of inhabitants vulnerable to middlemen andlabor contractors. Besides workers from thelocal area, it was explained that foreign workers
also come to work on the plantations, taking
advantage of the porous borders between
Indonesia, the Phillippines, Sabah and Sarawak,

Local workers accept difficult or unfair
conditions because limited opportunities for

29 Some respondents provided several specific causes which can all beconsidered as ‘weak governmental role or system’. The total number ofthese causes is 20, reported by 14 respondents.

Retention of passports
Unreasonable quota/target sytems
No provision of workers' basic protection
Low (legal minimum) wages
Weak commitment to labor rights and conditions
Limited monitoring of labor rights and conditions
Lack of unions or other support organizations
Limited knowledge and skills
Corruption and mis-balance of power
Poverty and limited opportunities
Use of casual and undocumented workers
Weak governmental roles and systems
0Indonesia

5

10

15

20

25

Malaysia

FIGURE 7: STAKEHOLDER VIEWS ON THE UNDERLYING CAUSES OF FORCED LABOR IN INDONESIA AND MALAYSIA

www.fairlabor.org / www.tcgfsocial.com

20

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

flooding the labor pool, keeping wages low andworking conditions poor.
A lack of a functioning governance system
leads to misuse of power and asymmetry inthe of balance of power, stakeholders reported.
The local population and workers are scaredof authorities, and interviews revealed that
security personnel often favor the private sector
over workers. Workers are less likely to standup for their rights because they feel intimidatedor are harassed by local authorities or company
management.
Seven stakeholders mentioned limited skills andlow education levels among the local workforce
as a driver of forced labor in Indonesia.
Without worker protections such as collective
bargaining, a lack of education, respondents
said, results in low awareness or understandingof workers’ rights.

A lack of strong unions and related prolabor groups in Indonesia leaves few workers
organized or part of an independent union,
according to the interviews. Respondents
said that the few unions available do nothave sufficient capacity, experience, or thewherewithal to raise awareness on labor rights
or promote and arrange collective bargaining.
Also, interviews revealed reports of intimidationand harassment of labor rights defenders,
including active labor union members.
The use of informal, casual and undocumented
workers in the palm oil sector in Indonesia iscommon, stakeholders said. Respondents
reported that companies hire contractors to
recruit and manage workers, thereby creating
circumstances for irresponsible practices to go
unnoticed.

Stakeholders’ Views on Causes of Forced Labor in Malaysia
Stakeholder responses revealed underlying
causes of forced labor in Malaysia, as well.
Stakeholders reported that continued useof migrant and undocumented workers is
widespread in the Malaysian palm oil sector. A
common phrase for this, “commodification oflabor,” reflects that middlemen and recruiters
treat workers as a commodity.

Some recruitment and employment agencies
do not follow responsible recruitment practices,
according to interviews, resulting in the misuseof power and an asymmetry of balance of power.
Recruitment processes with high costs for
migrant workers and misleading claims about
the nature of work are indicators of misuse of
power by recruitment agents and contractors.

Ten respondents said that weak government
institutions and related enforcement systems
are a reason for forced labor situations in
Malaysia. For example, while the practicesof allowing a company to retain a worker’s
passport and to pass on the costs of migration
fees to workers through wage deductions are
no longer permitted under new regulations,
it is uncertain whether these changes will beeffectively implemented and monitored.

Limited opportunities for work and income
generation and the resulting poverty drive
migrant workers from countries like Nepal,
Bangladesh, Myanmar, Indonesia and India to
Malaysia to work on the oil palm plantations,according to stakeholders. Workers incur debt
to pay recruitment fees and other expenses
under the impression that they will easily
earn enough in wages for repayment. Migrant
workers are promised good wages andworking conditions, stakeholders said, only towww.fairlabor.org / www.tcgfsocial.com

21

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

find themselves deceived and unable to makerepayment. Further, immigration regulations
make it illegal for workers to change employers.
Work permits must be renewed yearly and can
only be renewed by the first employer leaving
migrant workers bonded to their employer.
Individuals face either forced labor or the risk
involved with escaping the worksite and beingarrested as an illegal immigrant.
There is no provision of workers’ basic protectionsin Malaysia, according to stakeholders. Workers
are not protected from abuse and harassment
by recruitment agents, face restrictions of
movement by employers, and have no system

to safely store identity papers so as to haveaccess to them.
Retention of passports can be considereda cause of forced labor, but according tointerviews it is also a consequence of the labor
environment. Stakeholders said that plantation
owners ‘feel’ the need to retain foreign workers’
passports to prevent them from abandoning
the worksite. Employers do not want to “lose”
their investment in migrant workers becauseof the number of requirements that exist forcompanies to arrange and renew the permits
for foreign workers.

CGF Member Companies' and Palm Oil Companies' Views on
Causes of Forced Labor
Four of the six surveyed CGF member
companies provided views on the underlying
causesofforcedlabor.
Companies’
representatives’ perceptions were in linewith the findings in the literature review andstakeholder survey, and include:• Recruitment fees and poor recruitment
practices• Use of migrant workers; migrant workers
do not understand their rights• Lack of written contracts in a languagethat the workers understand• Payment is performance-based and does
not reach legal minimum requirements• Freedom of association is limited• No enforcement of local laws/legislation• Retention of identity documents• Discrimination and demand for cheap labor• Poverty and unemployment• Regional conflict and displacement• Lack of policies and procedures; poorly
regulated labor market.

www.fairlabor.org / www.tcgfsocial.com

All companies’ respondents said they were
aware of the risks of forced labor. Companies’
respondents indicated the belief that their
suppliers (palm oil companies) are willing tocooperate in mitigating forced labor risks. The
challenges to addressing and mitigating forcedlabor, they said, are the fragmentation of supply
chains and a lack of supply chain transparency.
Companies’ representatives expressed that
there is a lack of sector-wide action and that
individual companies acting alone do not havesufficient influence to drive change. There isbroad agreement among palm oil companies,
as well, that the main challenges to addressing
forced labor are fragmented supply chains anda lack of a sector-wide action.
CGF member companies’ respondents largely
agreed that governments need to be moredeeply involved in addressing forced labor,
particularly its root causes, in spite of theiracknowledgement of weak governance.

22

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Most palm oil companies who responded tothe survey said that they do not perceive lackof internal resources or lack of commitment
at the palm oil company and plantation levels
as impediments. Nevertheless, they recognize

the need to build internal capacity andunderstanding of forced labor issues. It is to be
noted that this perception may not be valid forthe majority of small palm oil companies andsmallholder farmers.

7. Recruitment and Employment Practices
Increasingly, buying companies are aware of theimperative to improve recruitment practices tomake them more ethical. Some companies havejoined the Leadership Group for Responsible
Recruitment of the Institute for Human Rights
and Business (IHRB)30. Ethical recruitment
practices were discussed at the November 2017
United Nations Forum on Business and Human
Rights with a focus on the need for systemicchange, including adoption of a businessmodel in which companies (employers) bear
all recruitment-related costs31. The ILO General
Principles and Operational Guidelines on Fair
Recruitment32; the IOM’s IRIS certification
scheme33 for Recruitment Agencies; andthe Alliance 8.734, the global partnership for
eradicating forced labor, modern slavery,
human trafficking and child labor around theworld are other notable platforms throughwhich the companies and governments engage
to address the issue.
Among CGF members there is generalagreement that responsible recruitment is key
to tackling forced labor35.
In Indonesia, the majority of workers in palm oil
production are locals or originate from otherregions of Indonesia. The major forced laborrisks are high levels of casual labor and highproduction targets.
Two reports suggest the need to understand how
Indonesia’s colonial history impacts the current
labor situation. Under the Dutch colonial rule, atransmigration program was implemented thatwww.fairlabor.org / www.tcgfsocial.com

led to the migration of millions from densely
populated areas to Indonesian islands. Mostof these trans-migrants originated from Javaand Bali and received compensation from theDutch government to move to Sumatra andKalimantan to work on plantations36. A study
conducted in 2016 found that the majorityof workers interviewed in Sumatra (85%)
descended from migrants who came from Javaduring the colonial period. These third and fourth
generation Javanese descendants mostly have
low levels of education and few employment
options other than oil palm plantations37.
A majority of plantations’ maintenance workers
are employed seasonally and are paid on apiece rate basis, only receiving compensation
for the days they work. Tasks such as pesticide
spraying, spreading of fertilizer, weeding, andharvesting are performed both by daily workers
and workers with a permanent contract. Most
workers employed in palm tree seedling

30 https://www.ihrb.org/employerpays/leadership-group-for-responsiblerecruitment
31 Parallel session on “Reimbursement of worker recruitment fees as
remedy”, organized by the Leadership Group for Responsible Recruitment, the Institute for Human Rights and Business (IHRB), and Verité,
28 November 2017.
32 https://www.ilo.org/global/topics/fair-recruitment/WCMS_536755/
lang--en/index.htm
33 https://iris.iom.int/
34 https://www.alliance87.org/
35 Two of the three Priority Industry Principles refer to this: no worker
should pay of a job and no worker should be indebted of coerced towork. https://www.theconsumergoodsforum.com/initiatives/social-sustainability/key-projects/priority-industry-principles/
36 "The great palm oil scandal: Labor abuses behind big brand names,"
Amnesty International, 2016.
37 "The Human Cost of Conflict Palm Oil, worker exploitation in Indonesia", Rainforest Action Network, 2016

23

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

administrative duties at plantations fall mostly
to Malaysian workers with permanent contracts.
Malaysian recruitment agencies collaborate withlike agencies in the labor-supplying countries
to identify and migrate the required number ofworkers. The Malaysian Ministry of Home Affairs
needs to approve the recruitment of foreign
workers, with the requirements and procedures
differing according to the country of origin of
the migrants. For example, the recruitment ofworkers from Indonesia and Nepal is relatively
easy.
nurseries were reported to be casual, working
without a contract, while palm mill workers havepermanent contracts and are paid monthly.
Palm fruit harvesters tend to have contracts
for one or two-years and are paid based on
meeting production targets38.
According to a local organization, many
companies use subcontractors and middlemen
for informal recruitment of new workers. These
middlemen are often from the local community.
In general, there are no written contracts
between middlemen and workers. While thecompany expects middlemen to provide
personal protective equipment, in practice they
do not, and similarly do not provide workers
with other services.
In Malaysia, 80% of workers in the palm oil
sector are foreign migrants and are mostly hired
through recruitment agencies. The literature andstakeholder interviews revealed that the system
is riddled with deceptive recruitment practices,high recruitment fees, passport retention, andpoor payment of wages. The recruitment fees
charged to workers are so high that they tend
to indebt workers39. Migrant workers originate
from Indonesia, Nepal, Bangladesh, India, andMyanmar and are involved in field operations
like harvesting (collecting fruit bunches),pruning, and spraying. The supervisory andwww.fairlabor.org / www.tcgfsocial.com

Bangladeshi authorities, however, regulate
their labor supply and provide a list of available
Bangladeshi workers.
Labor brokers play an important role in the
recruitment and human resources managementof migrant workers, including arrangement of
payments, accommodation, transportation, andobtaining work permits and visas. The broker
usually has a contract with the company forwhich the workers are being recruited. The
contract includes terms of payment, number ofworkers, and length of time for the assignment.
Several layers of subcontractors may be involvedin the recruitment process40. Sometimes theuse of labor contractors and recruitment agents
results in workers who are not skilled, prepared
for, or motivated to work on plantations.
Recruitment of migrant workers can be a highly
profitable business, as the agents receive
payments from both the employer and themigrants searching for work. Recruitment
agents may levy additional service charges41 to
the migrants for making arrangements and forthe registration of immigration documents42.
38 “Palming off Responsibility, Labour rights violations in the Indonesianpalm oil sector”, CNV & SOMO 201739 “The law of the jungle: Corporate responsibility of the Finnish palm oilpurchases," Finnwatch, 201440 "Exploitative labor practices in the global palm oil industry," Humanity
United, 2012.

24

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Many migrant workers borrow from relatives,
friends, or the agent, to cover these costs.
Often, wages are lower than promised and themigrant workers find themselves in a bonded
situation43.
A 2016 study of migrant workers in Malaysia
conducted by Finnwatch, a human rights
organization, yielded concrete data on the
recruitment fees paid by foreign workers.
Workers originating from various countries paid
different fees to their recruiters (Box 7). They
found that fee repayment was managed by theemployer via wage deduction, which meantthat for some workers it could take a year to
repay the fees due to their low wages44.
The Finnwatch researchers learned fromworkers that the information provided during
the recruitment process did not accurately
describe the realities of the work environment
and that in practice the work was more physicallydemanding than portrayed. In general, written
contracts are provided to foreign workers,
but these are either in Bahasa, Malaysian orin English, and most workers were not able tounderstand the language of their contract or
payment arrangements.
The
Malaysianorganization
Tenaganita
reported in 2014 about migrants suffering from
intimidation and mistreatment by the agencies
that recruited the workers. Tenaganita reported
that several high-level executives of recruitment
agencies (also called outsourcing companies)
are political leaders, suggesting a possible
reason for the lack of action by the Malaysian
government to curb recruitment agency
practices. Further, the report found a large
number of undocumented migrants in Malaysia
because migrant workers who either left theiremployer or did not get their permits renewed45
remained in the country. It was estimated thatwww.fairlabor.org / www.tcgfsocial.com

BOX 7: Variations in the
recruitment fees paid torecruiters (Finnwatch, 2016)- Indonesia - € 342- Bangladesh - € 2188
- India - € 121-1206- Nepal - € 588–1010- Myanmar - € 395

half of the 4.6 million migrants in Malaysia were
undocumented. In 2011, a government programattempted to legalize workers, but did not
succeed in the registration and legalization of
all migrant workers. Today, there remains a highnumber of undocumented workers who live infear of being found by Malaysian authorities and40 "Exploitative labor practices in the global palm oil industry," Humanity
United, 2012.
41 A number of costs are involved in the entire recruitment process,including commission for the agent or even sub-agents, transportation
costs, expenses for the medical exams, for arranging a passport andthe work permit. There appears to be a large variation in costs with differences among the agents as well as between the different countries oforigin.
42 “Exploitative labor practices in the global palm oil industry," Humanity
United, 2012.
43 "The law of the jungle: Corporate responsibility of the Finnish palm oilpurchases," Finnwatch, 2014 and "Working conditions at the IOI Group’s
oil palm plantation estates in Malaysia: A follow-up study," Finnwatch,
2016.
44 As per the 2017 figures the monthly minimum wages for workers in
Malaysia was about US$ 242. Order 3 of the Minimum Wages Order2016 stipulates that the minimum wage for daily rated workers working
6 days a week is RM 38.46 per day (or RM 1,000 a month for monthly
rated workers) in Peninsular Malaysia and RM 35.38 per day (or RM 920
for monthly rated workers) in Sabah and Sarawak. All workers— fieldor general workers and harvesters—shall be paid a minimum RM 38.46
per day (or RM 1,000 a month for monthly rated workers) in Peninsular
Malaysia and RM 35.38 per day (or RM 920 a month for monthly rated
workers) in Sabah for the normal 8 hours work or a spread over periodof 10 hours. Under the Malaysia Employment Act 1955, "spread overperiod of ten hours" means a period of ten consecutive hours to be reckoned from the time the employee commences work for the day, inclusiveof any period or periods of leisure, rest or break within such period often consecutive hours. To put it simply, it means 8 hours of work with 2hours of break.
45 As part of the recruitment process, the worker needs to pass a
medical examination in the home country prior to recruitment as well as
in Malaysia within the first month after arrival. In case of illness, the contract with the worker is terminated and he/she needs to return to his/herhome country at his/her own expense. Before the renewal of the permit,
medical examination is again needed and in case of medical findings thepermit will not be renewed.

25

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

sent to immigration retention centers or jail46.
Four out of the five palm oil companies
surveyed for this study indicated that they workwith agencies to recruit workers. The suppliers
provide workers with employment contracts inthe dominant language or the national languageof the country of origin of workers. However,that practice is not possible for all workers
due to the diversity of their origins. All palm
oil companies reported collecting information
about the conditions at their worksites, including

wages, health and safety procedures, worker
training, access to services, child labor issues,
forced labor issues, freedom of association,and discrimination. It is unclear if the palm oilcompanies collect information on migration
corridors, worker demographics and therecruitment practices of the labor brokers andrecruitment agencies.

46 http://www.rhsansfrontieres.org/en/press/our-press-opinion/329article-malaysia-forced-labour, 2014.

8. Regulatory Frameworks in Indonesia and Malaysia
Relevant for Forced Labor Issues in the Palm Oil Industry
Key components of the research include an
exploration of the international normative
framework on forced labor and a complete
review of the corresponding national regulatory
frameworks in Indonesia and Malaysia. The
analyses allow for the identification of gaps innational frameworks as they relate to forcedlabor indicators and the labor recruitment
process. See Annex 3 for an overview of the ILO
Conventions ratified by Indonesia and Malaysia.
Indonesia has not ratified ILO Convention C110,
Plantations Convention, which is considered
key to regulating working conditions in thepalm oil industry (see Table 2 for more details).
Indonesia has signed ILO C29, the Forced
Labour Convention, and incorporated it in its
national legislation.

• Forced labor is defined in Indonesian law

www.fairlabor.org / www.tcgfsocial.com

BOX 8: Forced Labor
International Normative
Frameworks- ILO C029 – Forced Labor Convention- ILO P029 – Protocol of 2014 to the Forced Labor
Convention- ILO C105 – Abolition of Forced Labor Convention- ILO R203 – Forced Labor (Supplementary Measures)
Recommendation, 2014
- League of Nations Slavery Convention, 1926
- Protocol to Prevent, Suppress and Punish Trafficking
in Persons Especially Women and Children,
supplementing the United Nations Convention against
Transnational Organized Crime

as “all work or service which is exacted fromany person under the menace of any penalty
and for which the said person has not offeredhimself voluntarily.”

26

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIATABLE 2: OVERVIEW OF CONVENTIONS ADDRESSING FORCED LABOR AND RATIFICATION BY INDONESIAIMPORTANT CONVENTIONS SIGNED BY INDONESIAIMPORTANT CONVENTIONS NOT SIGNED BY INDONESIAILO C100 - Equal Remuneration Convention

ILO C095 - Protection of Wages Convention

ILO C087 Freedom of Association and Protection of the Right toOrganise Convention

ILO P029 - Protocol of 2014 to the Forced Labor Convention

ILO C029 - Forced Labour Convention (covering forced or compulsory
labour)ILO C110 - Plantations Convention

ILO C098 - Right to Organise and Collective Bargaining Convention

ILO C 129 - Labor Inspection (Agriculture) Convention

ILO C111 - Discrimination Convention

ILO C105 - Abolition of Forced Labor Convention (Denounced in 1990)

UN Convention on the Protection of the Rights of all Migrant Workers andMembers of their Families (ICMW)• The minimum age of employment is 15 years
old and Indonesian law prohibits anyone
from employing and involving children (anyperson under the age of 18) in the worst
forms of child labor.

• In the Manpower Law No. 13 of 2003 (Art. 77)
are included provisions on working hours, aswell as on overtime (Art. 78), rest and leave(Arts. 79-84), and menstrual leave (Art.
81). Articles 88 and 89 define living wages
as wages that enable workers to properly
meet the livelihood needs of their families,
including needs relating to food, clothing,
housing, education, healthcare, recreationand pension benefits.

• There is a limit on working hours of 40 hours
a week, with a maximum overtime of threehours per day or 14 hours per week. The
national law also indicates that payment
for overtime work should be at a premiumof one-and-a-half to three times the hourly
wage.

• The minimum wage differs by province
and city and is set by the Governor of eachIndonesian province, who can also set
minimum wages for particular economic
sectors. Employers are not allowed to pay

www.fairlabor.org / www.tcgfsocial.com

wages below the minimum wage according
to Article 90 of the Manpower Act, while
Article 78 of the same requires employers
to pay workers for working beyond regular
working hours (overtime), while limiting theamount of acceptable overtime and setting
certain conditions on overtime.

• Under Indonesian law, workers can be
employed either on a permanent or a fixedterm employment contract. Employers canalso hire workers as daily laborers for work
which is changeable and for which wages
are based on attendance, as long as theworkers do not work more than 21 days amonth. Individuals who work under thesedaily agreements are commonly referred toas casual day labor47.
While Malaysia is a signatory to a number of
ILO Conventions (see Annex 3), it has not yet
ratified those with potential implication for
migratory and forced labor, including C110,
Plantations Convention, as shown in Table 3.
This convention provides guidance on migrant
worker recruitment, employment contracts,

47 "The great palm oil scandal: Labor abuses behind big brandnames," Amnesty International, 2016.

27

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIATABLE 3: OVERVIEW OF CONVENTIONS ADDRESSING FORCED LABOR AND RATIFICATION BY MALAYSIAIMPORTANT CONVENTIONS SIGNED BY MALAYSIAIMPORTANT CONVENTIONS NOT SIGNED BY MALAYSIAILO C100 - Equal Remuneration Convention

ILO C111 - Discrimination Convention

ILO C098 - Right to Organise and Collective Bargaining Convention

ILO C087 - Freedom of Association and Protection of the Right toOrganise Convention

ILO C029 - Forced Labour Convention (covering forced or compulsory
labour)UN Convention on the Protection of the Rights of all Migrant Workers andMembers of their Families (ICMW)48

ILO C095 - Protection of Wages Convention

ILO C110 - Plantations Convention49

ILO C014 - Weekly Rest (Industry) Convention (only for the province ofSarawak)ILO C105 - Abolition of Forced Labor Convention (Denounced in 1990)
ILO C 129 - Labor Inspection (Agriculture) Convention

wages and types of wage rates, weekly rest,
holidays, maternity rights, collective bargaining,
freedom of association, labor inspection,
housing and medical care for plantation workers
and their families.
The regulatory framework in Malaysia includes
standards both at the national and regional
level.

• In Peninsula Malaysia and Labuan, theEmployment Act of 1955 defines minimum
standards of employment and regulates core
aspects of employment such as working
hours, wages, holidays and retrenchment
benefits.

• The Labour Ordinance (Sabah Cap. 67) andthe Labour Ordinance (Sarawak Cap. 76)
provide separate regulations for Sabah andSarawak.

• Regulations on child labor are stipulated in theChildren and Young Persons (Employment)(Amendment) Act 2010, including conditions
for employment in light work, prohibitionof night work and underground work forchildren and young persons, and working
hours.

• An Employment Agencies Act was enacted
in 1981 by the Malaysian Government to help

www.fairlabor.org / www.tcgfsocial.com

Malaysian employers find migrant workers
from overseas. The Act was amended in2017 and is expected to be replaced by thePrivate Employment Agencies Act. Thislatter Act, once it comes into force, will
include regulation of recruitment for foreign
workers and will phase out the system oflabor outsourcing agencies50. Based on the
Employment Agencies Act the labor contract
is arranged between the recruitment agency
and the worker. This Act clarifies to someextent which party is responsible for theworkers.

48 The International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families (ICMW) was adopted by
the United Nations General Assembly (Resolution 2016) on 18 December 1990. It is an international treaty aimed at international protection of
the rights of all migrant workers and members of their families, reaffirming and establishing basic norms in a comprehensive convention which
could be applied universally.
49 http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312255
50 “Review of labour migration policy in Malaysia”, ILO Regional Officefor Asia and the Pacific, 2016. Malaysia has over 400 labor outsourcing
agencies as of 2013. The ILO report states “Even for ‘direct recruitment’of migrant workers, outsourcing firms were often heavily involved, acting
as the employer’s representative to source workers in countries of origin
and handling the administrative requirement. The scope of regulatory
responsibilities [created by the Policy Amendment issued by the Cabinet
Committee on Foreign Workers in 2005] proved beyond the capacity of
the Government to manage effectively, leading to major problems withmisconduct by outsourcing companies. Pervasive abuse related to thefee amounts charged convinced the Government to suspend the quota
of job orders and distribution of new work permits in 2010. Further regulatory actions followed in 2011, halting the issuance of licenses and work
permits to outsourcing companies. A critical problem of this system has
been that it clouds the legal relationship between the migrant workers
and their employers.”

28

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA• The Immigration Act 1959/63 states that aforeigner is illegal in the country when he/shecannot produce a passport, travel document
or entry permit, or when these documents
do not have a valid endorsement. Penalty
for illegal stay in Malaysia can be a fine or
imprisonment. According to an ILO report,
the Immigration Act 1959 was amended inAugust 2002 with the purpose of controllingthe flow of irregular migrants, as Malaysia wasexperiencing a rapid increase in the numberof undocumented migrants working within
the country: “The amended Act criminalizes
migrants who do not comply with Malaysian
immigration policies relating to entry, stay
and work, making them subject to arrest
if caught by authorities or the People’s
Volunteer Corps (RELA)51.”• A

Policy on Recruitment of Foreign
Workers was formulated by the Malaysian
Government in 1991. According to thispolicy, wages and benefits, and terms andconditions of employment of migrants
should be similar to those provided to local
workers under national labor legislation. It is
stated that all migrant workers must have awritten contract. The costs associated withrecruitment and repatriation of workers
after completion of their contract, should beborne by the employer. In 1995 a Passport
Act was introduced to prohibit withholdingof passports by employers.

• In 2007 Malaysia introduced the i-Kad, an
identification card issued by the Immigration
Department with the holder's photo andbiometric information. The i-Kad aims
to ensure that migrant workers haveidentification documents on them at all times.
In case their passport is withheld by theiremployer, workers still have other documents
and can avoid deportation. The issuance of
the i-Kad seems to be an acknowledgementby the government that employers continue
www.fairlabor.org / www.tcgfsocial.com

to hold the workers’ passports although thisis forbidden by the 1995 Passport Act.

• During the 2007 Summit, the member
nations of ASEAN (Association of Southeast
Asian Nations) adopted the Declarationon the Protection and Promotion of theRights of Migrant Workers52. The Declaration
states that governments must “promote fair
and appropriate employment protection,
payment of wages, and adequate accessto decent working and living conditions
for migrant workers.” Both Malaysia andIndonesia have signed this declaration.

• Overthe past years, the Malaysian
government has entered into bilateralagreements with countries of origin of
migrant workers in an attempt to have amore fair and efficient recruitment process.
These agreements included regulations
for private recruitment agencies, including
fixed fees charged. An ILO review of thegovernment-to-government
recruitment
process established under the MOU between
Malaysia and Bangladesh found that it has
reduced recruitment costs paid by workers
in the plantation sector by 8-10 times53.

• The Eleventh Malaysia Plan for the period
2016-2020 has designated the Ministryof Human Resources (MOHR) as the key
agency for dealing with migrant workers,
with full responsibility for regulating therecruitment of migrant workers. The intention
is to have a comprehensive immigration andemployment policy for foreign workers thatwill “enable policies and decisions that treat
51 “Review of labour migration policy in Malaysia”, ILO Regional Officefor Asia and the Pacific, 201652 http://www.ilo.org/dyn/migpractice/docs/117/Declaration.pdf
53 “Review of labour migration policy in Malaysia”, ILO Regional Officefor Asia and the Pacific, 2016. Bilateral agreements have been signedwith Nepal, Thailand, India, Sri Lanka, China, Bangladesh, Pakistan,
Vietnam and Indonesia.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

migrant workers as workers and humanbeings with rights and not as a potential
security threat54.” It is not clear when thepolicies will be fully implemented. Until now,the Home Ministry has played a key role indetermining migrant worker policy.

Sosialis Malaysia (PSM)55, a socialist politicalparty in Malaysia, it is about time to have acomprehensive policy to support the makingof important decisions that are in the bestinterest of migrant workers56.

• In 2012, Malaysia enacted a minimum wage
• The government strategy to improve themanagement of migrant workers in the
country by reducing the dependence on lowskilled migrant workers, and by streamlining
the recruitment process for migrant workers,
is contained in the 11th Malaysia Plan (2016-2020). The Malaysian government plans toformulate “a comprehensive immigrationand employment policy for foreign workers[…], taking into account the requirements
of industry and the welfare of foreign
workers.” According to the coordinator of
the Migrant Workers Desk, run by the Parti

www.fairlabor.org / www.tcgfsocial.com

law for migrant workers (with the exceptionof domestic workers) setting a basic monthly
wage of 1000 Ringgit (MYR) (US$255.56) in
Peninsular Malaysia and MYR 900 (US$230)
for Sabah, Sarawak and Labuan57.

54 https://www.malaysiakini.com/letters/366523
55 https://partisosialis.org/en
56 https://www.malaysiakini.com/letters/366523
57 http://www.nytimes.com/2012/05/02/business/global/malaysia-enacts-minimum-wage.html

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Analysis of the Regulatory Environment in Indonesia and Malaysia
Indonesia and Malaysia each have elementsof regulatory frameworks that act to provide
registered migrant workers equal treatment
as nationals58. In reality, however, laborlaws are not enforced to protect migrant
workers adequately59. Several forced labor
indicators are linked to regulations and therole of the government. Literature on forcedlabor documents violations of international
conventions and national laws regarding
employment, wages, contracts, working
conditions, recruitment and child labor, andlack of implementation and control of existing
frameworks in Indonesia and Malaysia.
While the national labor laws in Indonesia areconsidered adequate with respect to worker
protection, the literature and stakeholderinterviews cite the lack of implementationof existing laws. Current laws provide
employers with the flexibility to outsourcelabor recruitment, making it possible to hire
workers through third parties. In this system,
the relationship, including contracting andbenefits, is between the recruiter and theworker. Workers note that such arrangements,
where responsibility for working conditions
does not rest with the employer, lead to thepayment of lower wages60.
Regarding wages, the minimum wages
applicable in North Sumatra and Central
Kalimantan, where many of the oil palm
plantations are located, are quite low. Thesewages, according to research, are insufficient
to meet a family’s basic needs, particularly
considering the high prices for food and otherhousehold products in the remote locationsof the plantations61. Legal minimum wages inIndonesia are based on the cost of living for
an individual worker; expenditures associatedwith maintaining a family and children are notconsidered62. The lack of wages capable ofwww.fairlabor.org / www.tcgfsocial.com

supporting families is often cited as one of thereasons for child labor at oil palm plantations.
Another study points to uncertainty about
the legal status of international human rights
instruments in Indonesia. The report from
CNV and SOMO (2017) explains that “due toambiguity over which legal system Indonesia
uses, it is unclear whether the country iscurrently bound by the international humanrights law to which it is a party (as in a monist
system), or whether such international humanrights law would first need to be transformed
into national law (as in a dualist system)63.”
It is not clear if the international humanrights treaties and conventions ratified byIndonesia are applicable within the Indonesian
legal context. Analysts have mentioned that
this uncertainty has given rise in part to theinsufficient implementation and protection ofhuman rights in Indonesia.
In Malaysia, oil palm plantations principally
hire foreign migrants, mostly from Nepal64,
India, Bangladesh, Myanmar, and Indonesia65.
Analysis of the research suggests thatexisting laws do not protect foreign workers
and their families. Malaysia’s Immigration
Policy states that a foreign worker can only
receive permission to work a maximum of

58 Such as wages, work hours, holidays, terminations, non-discrimination, freedom of association, access to complaint mechanisms and otherprotections.
59 “Review of labour migration policy in Malaysia”, ILO Regional Officefor Asia and the Pacific, 2016.
60 UNICEF’s unpublished report.
61 "The great palm oil scandal: Labor abuses behind big brand names,"
Amnesty International, 2016.
62 “Palm oil and children in Indonesia, Exploring the sector’s impact onchildren’s rights”, UNICEF, 2016.
63 “Palming off Responsibility, Labour rights violations in the Indonesianpalm oil sector”, CNV & SOMO, 2017.
64 http://kathmandupost.ekantipur.com/news/2017-12-24/msian-employers-to-pay-foreign-workers-levy-from-next-year.html
65 "Working conditions at the IOI Group’s oil palm estates in Malaysia: A
follow-up study," Finnwatch, 2016.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

10 years. Additional restrictions on foreign
workers include minimum and maximum age
limits (18 and 45 years old respectively) andthe prohibition to marry while employed in
Malaysia66.
There are implications to the practice of an
outsourcing or recruitment agency contractingwith foreign workers, rather than the company
or plantation owner (the employer). First, thepractice relieves companies from providing
benefits to subcontracted workers. Second,
recruitment agents assign their workers to
employers for short periods of time. While
the practice provides employers with aflexible workforce that can be easily adjusted
depending on workloads, it also leads to thecasualization of labor. These arrangements
mean that employers do not control the terms
and conditions of the workers’ contract, and forworkers this system results in high dependency
on the recruitment and employment agency,
vulnerability to fluctuations in labor demand,and a high level of insecurity because of casual
work arrangements67.
According to the Passport Act (1995),
passports may not be withheld by employers
and recruitment fees are the responsibilityof the employer. However, the literature andstakeholder surveys indicate that it is common
practice for companies to retain workers’
passports and for workers to pay recruitment
fees. In the past year a few companies havestarted to allow workers to hold their own
passports or place them in a safe place at theplantations where they can have access tothem68.
The practices of retaining passports and otherimportant documentation69 and deducting
visa fees from the pay of foreign workers are
considered as indicators of forced labor anddebt bondage. Following concerns raised bywww.fairlabor.org / www.tcgfsocial.com

international organizations70, the Malaysian
Government declared in 2017 that it would
prohibit the deduction of visa costs and work
permits from wages. Starting in 2018, employers
are required to pay the visa fee, also called alevy, on behalf of migrant workers who cometo work for them71. The strongest resistanceto this policy change came from the employer
federations that represent the manufacturingsectors (electronics, apparel, etc.), which
employ the largest number of workers.
Resistance emerged from the palm oil sector,
as well, although it may have been tempered
by a worker shortage. As a result, companies
in the palm oil sector seem to have accepted
responsibility to pay the visa fee.
Interviews indicate that even though employers
have agreed to pay the visa fee, the majorityof the expenditures incurred by foreign workers
to get a job abroad, is not the levy but thecosts incurred at the recruitment stage. These
payments, often made possible through loans
from family, friends or lending agencies, put
the workers in a high state of indebtedness
even before they get a job. Once they become
employed, the low income earned by the workers
makes it difficult for them to repay their debts,
contributing to the high risk of bonded labor.
In addition, given the poor financial status ofthese workers and their vulnerability, they may
be subject to coercion, abuse, and deception

66 "Working conditions at the IOI Group’s oil palm estates in Malaysia: A
follow-up study", Finnwatch, 2016.
67 “Review of labour migration policy in Malaysia”, ILO Regional Officefor Asia and the Pacific, 2016.
68 http://www.wilmar-international.com/sustainability/wp-content/
uploads/2017/10/Sustainability-Brief-Providing-a-Safe-Place-forWorkers%E2%80%99-Passports.pdf
69 Or other valuable possessions such as jewelry, ATM cards, landdeeds, diplomas etc.
70 US State Department 2016, Finnwatch 2014, Guardian 2017, Verité
2014.
71 http://kathmandupost.ekantipur.com/news/2017-12-24/msian-employers-to-pay-foreign-workers-levy-from-next-year.html

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

by the recruiter about the nature of work,
compensation and other benefits. The presenceof these practices are classic ILO indicators forforced labor72.
Although several laws are in place to protect
migrant workers, the Labor Department in
Malaysia will only consider a complaint by amigrant worker with a passport and a valid
work permit. In most cases the employer
holds the passport, and it is the responsibilityof the employer to apply for and renew the
work permit annually, three months before theexpiration date73. Workers are not permitted toarrange this for themselves. Furthermore, when
there is a dispute, the employer can cancel
the work permit, thus turning the worker into
an undocumented migrant worker so that theworker is no longer allowed to stay in the country
or to seek help from the Malaysian Government.
This dependency on the employer and lackof legal options make workers vulnerable to
mistreatment and increases the risk of bonded
labor.
The Malaysian legislation that governs migrant
workers is the Immigration Act 1959/63 (Act155). As such, immigration concerns are apt totake precedence over other laws concerning
migrant workers, including those providing
some level of protection to (migrant) workers
such as the Employment Act. According to
the Immigration Act, without valid passport
and work permit foreigners are illegal and noprotection from the state or access to redress
can be expected. Migrant workers have limited
possibilities to change jobs; their legal status towww.fairlabor.org / www.tcgfsocial.com

work and to stay in Malaysia is directly tied totheir employer. This severely limits the abilityof migrant workers to leave the job for which
they were recruited without losing permission
to stay and work. According to the ILO, thisrestriction increases the vulnerability of theworkers to being abused or trapped in bonded
labor74. In this case, the existing regulation has anegative impact on the migrant workers.
The legal framework in Malaysia has serious
implications for the families of migrant workers.
Workers are not permitted to marry within the
country or to bring their wives and children.
However, in practice, migrant workers dobring their families, especially in the states
bordering Indonesia (Sabah and Sarawak), or
start families while in Malaysia. The status ofmigrants and their legal limitations have theadded consequence that children of foreign
migrants are born “stateless”75 and cannot
access government services, including healthcare and education. The result is child labor on
Malaysian oil palm plantations.

72 ILO has identified eleven overarching indicators for identifying forcedlabor. These are abuse of vulnerability, deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats,
retention of identity documents, withholding of wages, debt bondage,
abusive working and living conditions, excessive overtime. As these
indicators are overarching, the specific risk factors/indicators for identifying forced labor cases should be explored and specified for each context(both in the communities of the workers’ countries of origin and in thehost communities where workers are employed).
73 http://www.imi.gov.my/index.php/en/foreign-worker.html
74 “Review of labour migration policy in Malaysia”, ILO Regional Officefor Asia and the Pacific, 2016.
75 "Vulnerable and exploited: 7 things we learnt about migrant labor inpalm oil," The Guardian, 2016.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

9. Perception on Certification Schemes
The most important and well-known worldwide
certification program for palm oil is theRoundtable for Sustainable Palm Oil (RSPO).
Other certification programs include theIndonesian Sustainable Palm Oil (ISPO) andthe Malaysian Sustainable Palm Oil (MSPO)
certification standards.
It is widely accepted among the stakeholders
interviewed that certification leads to increased
awareness among palm oil suppliers aboutstandards, risks, and violations. Stakeholders
mentioned, as well, the benefit of smallholders
becoming
moreknowledgeable
about
sustainable production and more open to
improved productivity, higher quality assurance,and providing acceptable working conditions
as certification can lead to premiums.
CGF member company respondents said
certification leads them to accept andrecognize findings and commit to ensuring
compliance. Further, it facilitates monitoring ofissues via annual audits. Certification provides
an assurance of minimum standards, including
health and safety, but also creates a demandfor certified palm oil products that generates
pressure on palm oil companies to improvepractices.
Survey respondents also shared areas of
improvement for certification programs.

www.fairlabor.org / www.tcgfsocial.com

Problems associated with auditing –weaknesses
in auditing criteria, lack of focus on labor
standards, lack of detection of major labor
issues, and weak enforcement of certification
schemes – were identified. Some respondents
sensed that auditors do not understand theunderlying reasons for worker exploitationand expressed frustration that certification
protocols neither identify nor address root
causes of forced labor. In addition, respondents
said, certification does not sufficiently address
the needs of workers or include representationof workers in governance structures and may
unintentionally shift labor problems to noncertified plantations or other sectors.
All six CGF member companies participatingin the research project source palm oil thatis RSPO-certified. Four of the six companies
source “mass balance” and “segregated” palm
oil while fewer use the “Book & Claim” and the“Identity preserved” models76.

76 RSPO has four supply chain models: Identity Preserved: Sustainable palm oil from a single identifiable certified source is kept separate
from ordinary palm oil throughout the supply chain. Segregated: Sustainable palm oil from different certified sources is kept separate from ordinary palm oil throughout the supply chain. Mass Balance: Sustainablepalm oil from certified sources is mixed with ordinary palm oil throughout
the supply chain. RSPO Credits/Book and Claim: The supply chain is
not monitored for the presence of sustainable palm oil. Manufacturers
and Retailers can buy Credits from RSPO-certified growers, crushers
and independent smallholders. For more information see: http://www.
rspo.org/certification/supply-chains

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

The representatives of the six companies
reported use of certification for many reasons,
including that it (a) provides confidence toconsumers and customers that the palm oil usedin the products has been sustainably sourced;(b) assures consumers that the company has
a strategy to promote and strengthen thegrowth and usage of sustainable palm oil andavoid human rights violations, destruction oftropical forest habitats and peat lands; and (c)serves as a way to know the supply chain andto source fully traceable palm oil from certified
sources. Although some companies do notseek certification because they believe theirinternal programs are well developed, they
accept certification as an adherence to theirown principles and requirements. Meanwhile,other companies are working toward sourcing
100% RSPO certified palm oil (segregated).
The CGF members provided the following
responses on the benefits of certification andplantation monitoring:• Certification plays an important role in
information sharing, awareness raisingand capacity building. It helps to change
practices in the affected areas, to eradicate
malpractices and drive change;• Certification is helpful in the verification of
the production process to ensure sustainablepalm oil production, as well as provide a
certain level of transparency and traceability;• Standardization as part of certification helps
to ensure that oil palm plantations follow a
consistent assessment or audit;• Certification is useful for consumers,
customers, and the international community
to know that companies are upholding
commitments on responsible sourcing;• The demand for certification provides astrong signal to governments, producers,etc. that they need to “follow the rules”;

www.fairlabor.org / www.tcgfsocial.com• RSPO suppliers have systems in place, arebetter organized and know more about therisks and issues than non-certified suppliers;• Certification provides the opportunity
to partner with suppliers and peers to
support the implementation of socially andenvironmentally responsible practices andpolicies in areas or supply chains where they
were not previously utilized.
While certification was considered to provide aminimum level of assurance, it was seen to belimited in providing full assurance. Company
respondents see several areas of improvement
for certification programs.

• Identification of issues and implementationof Codes and Principles -- particularly relating
to social elements, including forced labor -is weak. One of the underlying causes could
be the low level of skills that the certification
auditors possess. Within the RSPO, there is a
gap on the social side, and issues of forcedlabor are not detected.
• The way upstream certification auditing is
set up does not provide auditors time andresources to investigate the social issues
in-depth or start to look at the root causes.
There is little visibility beyond tier 1, although
there are a lot of issues and risks several tiers
up in the supply chain.
• Certification is not a good business model
for smallholders, as it is difficult for them toget certification due to financial implications.
Companies recommended including more
attention to smallholders.
• The premiums that are currently being paid
as part of the certification program are notimpactful. It would be more effective to havethe costs for responsible production andsourcing included in the cost price.

35

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA• Current certification standards do not meetthe latest sustainable sourcing requirements
raised by NGOs. Monitoring and audits fail to
uncover issues or do not report accurately on
practices or policies of supply chain actors. In
some cases, this provides false assurance ofaddressing social and environmental issues
and indirectly contributes to actions by bad
actors.
• Companies are aware that certificates arein no way a guarantee that things are wellmanaged.
None of the six CGF industry members indicatedthat certification satisfied their needs entirely
nor provided them with complete confidence
that the palm oil they source is responsibly
produced. Respondents acknowledge thelimitations of certification and noted that theprocess is a lot of paperwork without muchof a return. Respondents said that when done
correctly, certification can be an excellent tool
to promote best practices, both social andenvironmental. The risks of poorly executed
certification, they said, undermine the conceptsof certification and verification and create acycle of exploitation that becomes increasingly
difficult to remediate and change. According tocompanies’ respondents, however, certificationis considered necessary and a useful process
to continue to drive accountability andtransparency. There is willingness and interest
to support and push the refinement andcontinuous improvement of these systems,
including clear expectations on forced labor, inorder to provide more accurate and thoroughverification of compliance and remediation.
All surveyed palm oil companies (5) sell certified
palm oil or palm kernel oil. Four out of fivereported that certification provides them withsatisfaction that their palm oil is responsibly
sourced. Some palm oil companies highlighted

www.fairlabor.org / www.tcgfsocial.com

that certification provides the companies somelevel of assurance about the sustainability
practices of the mills, meets standards thatare at least at, or above, legal requirements,
have robust audit procedures and hence thatthe certified partners are potentially low risk.
According to the palm oil companies, they viewcertification as one of the several tools andinterventions that could drive impact.
The palm oil companies surveyed offeredsuggestions on benefits77 and areas for
improvement78 for certification.
Palm oil companies reported the following
benefits of certification:• Certification and audits are helpful inproviding insight and creating awarenessabout risks and violations.
• Certification is helpful to improve practices
and ensure compliance.
Certification
helps protect labor rights and•ensure health and safety standards.
• Certification is a useful tool for their buyers.
Palm oil companies reported some areas for
improvement for certifications:• Certification schemes are expensive toimplement.
Problems
with audits and auditors as labor•
issues are not (sufficiently) detected andneither are the underlying causes.
• Weak auditing criteria, lack of focus on labor
standards and difficulty meeting existingcertification standards.
• More administrative work for plantation
managers to maintain certified status.

77 A list of 15 options was provided including the opportunity to add
more.
78 A list of 9 options was provided including the opportunity to add more.

36

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

10. Companies' Internal Management Systems
Six CGF member companies completed adetailed survey about their palm oil sourcing
and internal labor rights management systems.
Companies' responses were assessed using asa framework the FLA Principles of Fair Laborand Responsible Sourcing79, which corresponds
closely with the United Nations Guiding
Principles on Business and Human Rights80 andwith the OECD-FAO Guidance for Responsible
Agricultural Supply Chains81.
1. LABOR STANDARDS: Company Affiliate
establishes and commits to clear standards.
All six companies reported having a Codeof Conduct (CoC) or Supplier Code withsocial standards including the prohibitionof the use of forced labor. Several set forth abroader overall sustainability policy, guide, or
responsible sourcing policy. Two companies
said that they are updating their CoC toalign with the CGF principles on forced labor,
including the requirement that workers should
not pay recruitment fees. While the companies’
CoC include forced labor clauses, they do notinclude the various indicators elaborated in
Section 4 of this report.
2. COMPANY STAFF AND IMPLEMENTINGPARTNER TRAINING: Company Affiliate
identifies and ensures that the specificpersonnel responsible for implementing labor
standards (at head office and in the regions)
are trained and are aware of the workplace
standards criteria.
No information was collected.
3. SUPPLIER TRAINING: Company Affiliate
obtains
commitment,
drivessupplier
awareness of labor standards, and tracks
effectiveness of supplier workforce training.

www.fairlabor.org / www.tcgfsocial.com

Some of the six companies participating in
the research are actively engaging with their
suppliers (palm oil companies) to encourage
concrete actions to improve business practices
and to meet social standards. Five companies
reported having conversations with their
suppliers about the risks of forced labor in their
supply chains. Companies’ representatives
noted willingness among their suppliers to
mitigate forced labor risks. One company
respondent indicated the business practice ofsuspending and ultimately ceasing business
relations with suppliers that are unwilling tocooperate or to meet standards.
Overall the companies indicated that theywork with suppliers (palm oil companies)
who are willing to engage and be supportiveof continuous improvement. For example,
one company representative explained thatits suppliers are committed to have grievancemechanisms in place to prevent and mitigate
the risk of forced labor. Another company
representative explained that relationshipbuilding is important. It has established a
dedicated team which is in close contact
with its suppliers and provides advice andsupport on improvements. The philosophy isthat close contact brings real improvements.
Their experience to date, however, is that the79 http://www.fairlabor.org/sites/default/files/agriculture_principles_of_
fair_labor_and_responsible_sourcing_october_2015_0.pdf FLA affiliated companies are expected to apply a set of ten principles at all levelsof their supply chain which will help to guide companies in developing
headquarter-level social compliance programs as well as to govern
farm-level due diligence.
80 http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf
81 http://www.oecd.org/daf/inv/investment-policy/rbc-agriculture-supplychains.htm

37

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

accessibility. Another respondent noted thatin practice its helpline is not used by suppliers
or workers, but that most issues are reported
by consumers. Companies’ respondents talked
about the RSPO’s complaint and grievancemechanism, which has been used by several
NGOs to register complaints (the complaints arehandled by the RSPO task force). Respondents
said they would prefer if the RSPO grievancemechanism were more accessible and moretransparent in the handling of complaints.

palm oil companies do not yet feel a sense ofurgency to work toward drastic improvements.
Another company respondent said that throughcollective action, and in partnership with
suppliers (palm oil companies), they support
projects that include assessments, workshops,
and trainings.
4. FUNCTIONING GRIEVANCE MECHANISMS:
Company Affiliate ensures workers, farmers,
and their family members (where applicable)
have access to functioning grievancemechanisms, which include multiple reporting
channels of which at least one is confidential.
Two companies’ respondents reported that theyrequire their suppliers (palm oil companies) tohave a grievance mechanism, and it is verified
during audits. Three companies’ representatives
explained that they maintain an international
helpline or alert line to which all types ofcomplaints and issues can be reported. Anothercompany representative said that information
about the helpline is included in its Supplier
Code of Conduct, and in several countries a
local telephone number is available to increase
www.fairlabor.org / www.tcgfsocial.com

5. MONITORING: Company Affiliate conducts
workplace standards compliance monitoring.
Most companies rely on certification formonitoring and five companies indicated thatthey collect and receive information from their
immediate suppliers (palm oil companies)
about working conditions at oil palm plantations(which could be further upstream). Twocompanies’ representatives described theirsystems and procedures to collect informationfrom their suppliers regarding traceability,
certification, sourcing policies, verification
processes and procedures for dealing with
non-compliance and grievances. Anothercompany indicated that it requires suppliers(palm oil companies) to complete a pre-audit
questionnaire designed to identify potential
red flags and it is evaluated and used as an
input for supplier audits. Topics discussed with
suppliers were wages, employment contracts,grievance mechanisms and other labor
issues. Only one of the surveyed companies
is undertaking assessments (including humanrights impact assessment) using its own staff
and third parties at the plantation level. Three
representatives reported their companies haverecently started or are planning to look into thelabor recruitment process.
6. COLLECTION AND MANAGEMENT OFCOMPLIANCE INFORMATION: Company
Affiliate collects, manages, and analyzes
labor standards compliance information.
38

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Even though companies rely on the certification
reports, given that they are weak on
investigating and identifying social issues at theplantations or labor recruitment process, they
could invest more time and effort in plantationlevel monitoring.
This may not be required to be conductedannually, but a good baseline assessment will
provide a starting point for companies to startbuilding a program. While monitoring can takeseveral forms, Worker Demographic Profiling,
Recruitment Practices and Working Conditions
Analysis can be useful to understand the target
beneficiaries and labor recruitment process, ascompared to a compliance audit.
There are several differences between the
respondent companies regarding the level ofinteraction and procedures for pre-sourcing
and ongoing assessments. More information on
the collection and management of complianceinformation is needed.
Regarding traceability, the majority of the
respondent companies are able to trace thepalm oil to the mills, but none of them have good
insight regarding smallholders or the sourcesof fresh fruit bunches. One company, however,seems to have made good progress with thisin Malaysia. Companies believe it is important
for their suppliers to be transparent and try
to motivate this through awareness building
and dialogue (reported by 4 companies), bybuilding long term business relationships (3companies), by including transparency as aterm in their contracts (2 companies) and by
paying premiums (1 company). With regard
to the companies themselves being publiclytransparent about palm oil suppliers, some newdevelopments were taking place at the time ofthis research. While this research project was
being carried out, some CGF members for the
first time published their palm oil suppliers andmills list, which is an important step forward82.

www.fairlabor.org / www.tcgfsocial.com

7. TIMELY AND PREVENTATIVE REMEDIATION:
Company Affiliate works with suppliers toremediate in a timely way and preventative
manner.
Five of the six companies have taken action
over the past five years to address alleged
infringements of human and labor rights inthe palm oil sector in Indonesia or Malaysia,
according to respondents. The companies’
representatives said they work with palm
oil companies and NGOs on awareness,risks assessments, and developing concrete
improvements.
8. RESPONSIBLE PROCUREMENT PRACTICES:
Company
Affiliatealignsprocurement
practices with commitment to labor standards.
No information was collected.
9. CONSULTATION WITH GOVERNMENT,LOCAL AUTHORITIES, AND CIVIL SOCIETY:
Company Affiliate identifies, researches, andengages with relevant local and international
non-governmentalorganizations,
tradeunions, and other civil society institutions.
Four companies reported that they do havecontact with CSOs in response to a question
about working with other organizations. Twocompany respondents provided the namesof well-known international NGOs with whomthey work.
The survey instrument did not specifically ask
for engagement with governments and local
authorities.
10. VERIFICATION REQUIREMENTS: Company
Affiliate meets FLA verification and program
requirements.
Cannot assess based on the informationcollected.

82 In the first quarter of 2018, four CGF members, including Unilever,
Nestle, PepsiCo and Mondelez published their global palm oil suppliers
list.

39

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAOPPORTUNITIES FOR ACTION
Stakeholders' Suggested Solutions(Refer to footnotes throughout this section for specific comments by respondents)
Local palm oil companies, mills and internationalbuyers have increased their efforts to mitigate
labor and human rights risks involved in palm
oil production. Some CGF members and palm
oil companies reported taking steps to go
beyond reliance on certification systems83
and are actively building internal programs
to improve working conditions in their supply
chains. The engagement of local actors and
CSOs is increasing due diligence and as these
actors are conducting human rights impact
assessments in their supply chains.
Survey respondents revealed a willingness
among CGF members to collaborate84 withinternational organizations, CSOs, peers andtheir suppliers (palm oil companies). They
acknowledged the challenges of working in
isolation and that most CSOs currently working

on the ground have assumed the role ofservice providers as opposed to workers’ rights
advocates. There is a lack of on-the-groundcollaboration or coordination between industry
representatives and CSOs. The CGF members
recognized the need to work collectively
toward concrete and scalable improvements
for workers and affected families85.

83 Such as the RSPO: Roundtable on Sustainable Palm Oil; ISCC:
International Sustainability and Carbon Certification Scheme; RA/SAN:
Rainforest Alliance/Sustainable Agriculture Network; ISPO: Indonesian
Sustainable Palm Oil; MSPO: Malaysian Sustainable Palm Oil.
84 The suggestions for collaboration included a survey on the labor
situation on Malaysian oil palm plantations in collaboration with the ILO;
joint monitoring activities with worker organizations and labor unions inplantations in both countries; and co-identification and recognition offorced labor indicators for Indonesia.
85 The suggestion was to convene an industry roundtable to specifically address labor issues including recruitment processes, agent fees,
migrant worker permits, etc.

40
35
30
25
20
15
10
5
0
Capacitybuilding

Improveregulatory
systems andframework

Improvecompanies’
practices

Advocacy

Improve
worker voice

Indonesia

Collaborate

Penalize

Research

Improvecertificationand standards

Recognize
efforts

Malaysia

FIGURE 8: STAKEHOLDERS WERE ASKED AN OPEN-ENDED QUESTION ON POSSIBLE SOLUTIONS, AND THEIR INPUTS WERE COMBINED UNDER KEY THEMATIC AREAS

www.fairlabor.org / www.tcgfsocial.com

40

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIACGF members reported a desire for a collective
transfer of ownership responsibility of laborcompliance programs to palm oil companies(their suppliers) and local actors86. The palm
oil companies, according to interviews, areideally positioned to exert leverage to improve
recruitment practices and working conditions.
The preferred role of CGF members andbuying companies87 88, would be to facilitate
the process, help their suppliers (palm oilcompanies) to identify a common set ofstandards and progress indicators89, and verify
demonstrated progress90. Similar views wereexpressed by other stakeholders.

86 Thus far the efforts have been largely driven by multinational companies, without direct control over the plantations and smallholder farmers,
mainly for the management of reputational risks.
87 For example, specific recommendation for buyers, especially thosefarthest downstream in the supply chain such as brands, to financially
support the industry transformation toward better practices.
88 The role of buying companies is seen as piloting good practices,
providing guidance, and making practical recommendations.
89 Brands/CGF should clearly state the principles and take action if
members fail to comply.
90 Stakeholders suggested that companies that participate in RSPO/ISPO should demonstrate progress in the fulfillment of employment
rights, particularly on the issue of wages and recognition for women
workers.

Stakeholders based in Indonesia mentioned thefollowing solutions.
1. Capacity building is considered key forIndonesia (Figure 9).
Eight organizations mentioned the needto strengthen trade unions and to promotecollective bargaining agreements between
workers and employers as a way to addressforced labor in Indonesia. Other stakeholders
who need capacity building are auditorsand certification bodies91 92, civil society
organizations, palm oil companies, mills, andworkers93 94. CGF members and their suppliers(palm oil companies) can prioritize this in their
immediate operations.

91 Further awareness training for ISPO auditors on forced labor issues.
92 Certification bodies should be monitored and ensured to produce
only fair, just, and reliable assessments in order to provide certification.
93 Support educational activities that develop the knowledge of laborrights and particularly living wage entitlements amongst palm oil workers. These activities should be conducted in collaboration with worker
organizations.
94 Training of trainers for employees on their rights as employees in
RSPO certified units.

10
9
8
7
6
5
4
3
2
1
0
Labor unions(e.g. independence,
local laws, legal
process, workers’
rights)Auditors andcertification bodies(e.g. better quality
and coverage offorced labor issues)

Grower companies
on root cause
analyses andremediation

Indonesia

Supportingorganizations(e.g. employees of
RSPO, CSOs andunions)Workers(e.g. rights,
living wages)

Recruitment
agencies

Malaysia

FIGURE 9: STAKEHOLDERS WERE ASKED AN OPEN-ENDED QUESTION ON ACTORS MOST IN NEED OF CAPACITY BUILDING

www.fairlabor.org / www.tcgfsocial.com

41

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Stakeholders communicated the importanceof workers having more knowledge about andawareness of labor rights and wage entitlements.
CGF members and palm oil companies canachieve this through a cascading effect throughtheir supply chain partners. Some stakeholders
mentioned the importance of training on
gender issues95 96 .

regulations appear to be more applicable toworkers in industrial sectors, where the labor
situation is quite different from agriculture, andpalm oil more specifically. Better alignmentof the national regulations with international
standards was also mentioned as well as having
a National Action Plan that should pay specificattention to sustainable palm oil.

2. Improvement in laws97, regulations,enforcement and legal frameworks, andenforcement of existing laws and regulations.
Focus should be on ensuring betterarrangements for workers and providing better
regulation and enforcement for the high numberof casual and informal workers. Attention toplantation workers is needed, as the current

3. Improvement in palm oil companies’
practices was considered important in Indonesia,
with most attention aimed at decreasing thedependency on casual workers/day-laborers
and offering workers permanent contracts.
Stakeholders brought up the importance ofarranging better terms and conditions forworkers, including realistic production targets
and no targets linked to earning a minimum
wage, freedom to choose to work overtime andhaving a system that doesn’t put workers in
the position to feel the need to use children or
spouses having to work without pay in order tomeet the high targets.

95 There is a need to ensure that both women and men have equal access to training and extension services.
96 Ensure that both male and female auditors are cognizant of genderissues.
97 The existing Section 2A of the Employment Act (Act No. 265) should
be amended to ensure that the Minister of Human Resources implements
this Contract of Service employment relationship on plantations (i.e. allwork of a permanent nature in the plantations must be in the form of aContract of Service between the principal employer and the employees).

8
7
6
5
4
3
2
1
0

Recruitment practices

Terms and conditions of workers
Indonesia

Day-laborers

Living wage

Malaysia

FIGURE 10: IMPROVING PALM OIL COMPANIES’ PRACTICES

www.fairlabor.org / www.tcgfsocial.com

42

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

The top solutions identified by stakeholders
in Malaysia were similar to those proposed
for Indonesia, although the order of priority
differed.

•

1. Improvement of laws, regulations, enforcement and legal framework and enforcement of
current laws. It was recommended that the Malaysian government should:

•

•
•
•

•

•

•

•

Review and amend existing laws andregulations to stop forced labor;
Enforce existing laws properly;
Regulate and monitor recruitment
agenciesandprotect
workers
participating in recruitment corridors;
Provide adequate resources to labor
inspectors to conduct farm levelassessments of working conditions on
the farms;
Facilitate, and make the process easier,for birth registration and documentationof children of workers;
Create policies that fully recognize
migrant workers under the national law;andExpedite legalization of undocumented
migrant workers.

2. Improvement of palm oil companies’
practices was the solution mentioned mostoften. Stakeholders suggested that suppliers(palm oil companies) could improve recruitment
and employment practices in the following
ways:
•
•

•

Employers cover the recruitment fees.
Workers are issued a proper contract by
the employer, which includes clear terms
and conditions.
Workers are made aware of their rights
and of the terms and conditions of theiremployment, to which they voluntarily
agree.

www.fairlabor.org / www.tcgfsocial.com

•

•

•
•

•

Require reasonable work hours andprohibit forced overtime or have defined
production quotas.
Workers are paid according to nationallaw, including benefits.
Passport(or
other
important
documentation) retention practices are
eliminated.
Livingconditions(worker
accommodation) are improved as per theinternational guidelines98.
Undocumented workers should be legally
registered at no cost.
Pay legal wages as well as the mandated
benefits and overtime premiums at legal
rates.
Strengthen standardization of practices.

3. Capacity building of various actors in thepalm oil supply chain, including growers, mills,
palm oil companies and buying companies. This
could be facilitated by several actors, such asindustry associations, multi-stakeholder groups,
universities, and multi-lateral organizations:
•
•

•

•

Strengthen capacity to conduct root
cause analyses and remediation.
Decrease reliance on certification or legal
compliance audits. Instead, have morerobust field visits with the purpose ofgetting a better understanding of labor
conditions and identifying how they canbe improved.
Strengthen, activate and support labor
unions, and have them represented
among industry groups like RSPO.
Capacity building of various internaland external auditors99 and certification

98 https://www.ohchr.org/en/issues/housing/pages/internationalstandards.aspx
99 It was suggested to undertake better social and environmental impact
assessment (SEIA), which is required by law and RSPO standards, bothfor mills and plantations. However, SEIA practice has many weaknesses, such as poor site visits and participation, and no implementation of
the resulting mitigation plan.

43

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA•

bodies100 101, for them to be able torecognize and understand forced labor
indicators.
Capacity building of recruitment agencies
on components of ethical recruitment
and what risks to look for.

Where possible, supply chain actors can join
forces on capacity-building activities andwork with internationally recognized multilateral agencies and civil society organizations
who have experience in developing andimplementing action-based training programs.
Respondents mentioned additional items thatwill improve the forced labor situation in thetwo countries:• Advocacy

efforts by palm oil buyers,
including putting pressure on, and providing
incentives for suppliers (palm oil companies)
to commit, improve and demonstrateprogress, and promote transparency andgood practices to eliminate forced labor;• Hearingworkers’ voices102, for example
through improved access to worksites andplantations, as well as through effective
grievance mechanisms103;• Improved assessments and in-depth researchon labor situations and wages. This will
provide better understanding of root causes.
A number of stakeholders mentioned theneed to calculate and pay living wages toworkers;• Multi-stakeholder

collaborations
forstrengthening labor rights monitoring
and addressing challenges related to therecruitment process of migrant workers,
including recruitment fees and worker
permits.

The respondent palm oil companies (suppliers)
www.fairlabor.org / www.tcgfsocial.com

highlighted the following actions that can help
address some of the forced labor issues:• Pre-competitive

collaboration104
onsustainability issues and collective actions
by the industry is key. Pre-competitive
collaboration on sustainability means thatvarious companies and palm oil companies
share information on labor and humanrights issues in the palm oil sector, develop
collective action plans for the larger goodof the industry, while ensuring that the antitrust clauses are not violated and discussion
on pricing is avoided. Stakeholders such as
governments and CSOs must be part of the
dialogue and understand the limitations ofbuying companies and palm oil companies.

• Synergy between government and private
sector to alleviate poverty is needed withequitable development in all sectors,
especially in education.

• Continuous

engagement between thebuying companies, palm oil companies,
mills and plantations is needed to increaseawareness via capacity building programs;
trainings/workshops;
tracing,
engagingand supporting supply chain partners andassisting in addressing issues in a timebound manner.

100 Strengthening labor rights monitoring in leading palm oil certifications such as RSPO and ISCC. Improving the current certifications
programs and standards with more clear indicators and focus on forcedlabor.
101 Undertake periodic review of the Malaysian Sustainable Palm Oil(MSPO) Standards every 5 years (current practice).
102 Workers should be integrated as real stakeholders in the system,
like in audits, in monitoring, etc. Their voices need to be heard and there
should be mechanisms that allow for a two-way dialogue with the management. Empower workers to have a voice and defend their rights.
103 Transition grievance mechanism to local ownership, like with the
Bangladesh Accord.
104 Pre-competitive strategies are approaches that businesses take toaddress systemic problems with the delivery of goods and services. It
is a business strategy that is often applied when competition for limited
resources impacts business more than the competition for customers—ifthere are no resources to produce a product, there will not be any consumers to compete for.

44

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA• Participationof buying companies andpalm oil companies in relevant (multistakeholder) initiatives to develop guidelines,
methodologies, risk assessments, monitoring
tools, and verification protocol to identify andmitigate forced labor cases. Furthermore,develop protocols to address forced labor in
the context of suppliers’ grievances.

• CGF facilitates a study on labor migration
corridors and implements recommendations.

• Palm oil companies ensure oversight ofthe value chain including the recruitment
chain either by themselves or working
in collaboration with local civil society
organizations. Where possible, a direct
hiring model is best so as to have oversightand complete management of the process.
Where this is not possible, partnerships andengagements with key stakeholders canhelp exert influence and pressure to adhereto ethical policies.

• Buying companies and palm oil companies
must run their businesses responsibly
following the norms and guidance on forcedlabor to ensure workers are protected and notdiscriminated against. Oversight of workers’
recruitment processes by the recruitment
agent should be a must and should bepart of transparency and good corporate
governance.

BOX 9: Palm oil companies’
suggested actions forIndonesia

BOX 10: Palm oil companies’
suggested actions for
Malaysia

•

•

•

•

•

Government action on eradicating poverty andupgrading access to education.
Robust policy on no forced labor for buyers andgrowers; enhanced awareness with tighter due
diligence processes.
CGF uses its influence for no forced labor amongits members or palm oil companies, and provides
guidance on forced labor and its impact.
CGF members could contribute more (especiallyin terms of resources) to capacity-building effortsof large grower companies for the medium to small
plantations. Too much of this effort is being borne
currently by palm oil companies without sufficient
support from FMCG companies.

www.fairlabor.org / www.tcgfsocial.com

•

•

•

CGF members to engage with the Malaysian
government on migrant labor processes.
No limits on work tenures for migrant workers(solves the need to recruit new workers at a regularfrequency).
Social NGOs (in sourcing country/country of originof migrant workers) take active role in determining
approved agents for recruitment processes.
International labor and human rights organizations
get involved in recruitment practices at country/
governmental level.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Potential Partners with High Level of Influence
View from stakeholders
Stakeholders were asked to indicate actors in
the palm oil sector with the biggest level ofinfluence105 related to worker recruitment andimproving working conditions. The aim was to
identify stakeholders with whom CGF should
prioritize future engagement. Respondents
considered the following groups as mostinfluential for Indonesia (Table 4) and Malaysia(Table 5).

105 For the actors with no influence a score of ‘0’ was given, for theactors with most influence a ‘5’.

TABLE 4: ACTORS WITH HIGH LEVEL OF INFLUENCE ON WORKING CONDITIONS IN INDONESIA(ACCORDING TO STAKEHOLDERS)INDONESIA'S INFLUENCERS(from highest to lowest level of influence according to stakeholders

CONSIDERED LEVEL OF
INFLUENCE (0-5)

Businesses operating large plantations

4.7

National Government setting regulatory requirements

4.0International traders and processors of palm oil/palm kernel oil

3.6

International companies sourcing palm oil or palm kernel oil from Indonesia

3.3

Local or regional authorities (including local police) responsible for implementing the law, conducting inspections,providing safety, checking identity papers and work permits

3.3

Civil society organizations working on the issues of workers and communities

3.2

National labor unions representing workers (no unions linked to the company or government)

3.2

Small scale producers operating small oil palm plantations

3.1

Labor contractors and recruitment agencies responsible for attracting and/or contracting labor force

3.0

Industry Associations both international and based in Indonesia

2.7

Workers on plantations and farms

2.7

Certification bodies/due diligence agencies conducting audits and/or standard compliance verification

2.6

International labor unions and confederations of unions

1.9**One organization noted that RSPO is an important influencer in Indonesia (score 4.0).

www.fairlabor.org / www.tcgfsocial.com

46

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIATABLE 5: ACTORS WITH HIGH LEVEL OF INFLUENCE ON WORKING CONDITIONS IN MALAYSIA(ACCORDING TO STAKEHOLDERS)
MALAYSIA'S INFLUENCERS(from highest to lowest level of influence according to stakeholders

CONSIDERED LEVEL OF
INFLUENCE (0-5)

Businesses operating large plantations

4.1

National Government setting regulatory requirements

3.9International companies sourcing palm oil or palm kernel oil from Malaysia

3.4

Certification bodies/due diligence agencies conducting audits and/or standard compliance verification

3.1

International traders and processors of palm oil/palm kernel oil

3.0

National labor unions representing workers (no unions linked to the company or government)

2.9

Industry Associations both international and based in Malaysia

2.5

Local or regional authorities (including local police) responsible for implementing the law, doing inspections,providing safety, checking identity papers and work permits

2.5

Small scale producers operating small oil palm plantations

2.4

Civil society organizations working on the issues of workers and communities

2.1

Workers on plantations and farms

2.1

Labor contractors and recruitment agencies responsible for attracting and/or contracting labor force

1.8

International labor unions and confederations of unions

1.4

Nine groups of actors with a high level ofinfluence (of ‘3’ or higher) were identified
in Indonesia, while for Malaysia five groups
received a ‘3’ or higher. For Malaysia,
certification bodies/due diligence agencies
that conduct audits and standard complianceverification were also considered influential on
working conditions. For both countries, labor
unions were not considered as influential, andworkers on plantations and farms were among
the least influential with respect to having a say
in improving recruitment practices and working
conditions.
For Indonesia and Malaysia, in addition to
the large and small-scale palm oil companies(suppliers), labor recruitment agencies andlabor contractors were considered important inreaching out to migrant workers for potential
employment opportunities and conducting
a preliminary discussion with workers on thenature of work and compensation.

the local government and regional authorities
were also actively involved in this process, andin some cases the local workers’ unions andworkers also took up this role.
Stakeholders reported that in addition to thepalm oil companies (suppliers), national andlocal labor unions and workers’ organizations inboth countries were important influencers when
it came to providing an employment contract
to workers. Respondents highlighted thatlabor unions should be granted free access toplantations to organize the workforce and that
unions could influence the labor recruitment
process,settingreasonableproduction
quotas and assisting in determining living
wages for workers. In Indonesia, respondents
reported that a larger number of stakeholders
exercise influence on workers’ contracts,
includingorganized
laborrecruitment
agencies, independent labor contractors, local
government, international companies, tradersand processors.

In Indonesia, the respondents reported thatwww.fairlabor.org / www.tcgfsocial.com

47

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

The role of CSOs was considered importantwith regard to monetary advances provided toworkers for travel or to confirm employment(without risk of debt bondage) in both countries,
and for ensuring access to basic services (suchas medical, child care, schools, legal advice etc.)
to workers in Indonesia.
For both countries, survey respondents viewed
certification bodies as having limited influenceon improving recruitment practices and poor
working conditions. This is an important finding,as for a long period of time, certification wasviewed as an assurance system for decent work.
Two of the interviewed organizations do notshare this view and believe that the certification
system can improve working conditions.
Respondents were further probed to identify
key influencers, specifically in the life cycle of aworker’s labor recruitment process, where thevarious stages of the recruitment process werelaid out for them106. Businesses operating large
plantations and small-scale palm-oil producers

were reported to have the most influence inall the steps of a labor recruitment process(Figures 11 and 12).

106 Possible Steps in the Labor Recruitment Process (defined by
the FLA): (1) Reaching out to possible (migrant) workers about employment possibilities in oil palm plantations; (2) Preliminary discussion withworkers on the nature of work and terms and conditions (such as activities, hours of work, compensation, living conditions etc.); (3) Providing
an employment contract in a language understandable to the worker;(4) Providing a permanent employment contract to casual or contract
workers doing work that can be considered permanent; (5) Safe and freetransportation (transit) of workers from home-base location to the work
locations; (6) Free of cost preparation of paperwork for workers (suchas travel documents, insurance, identity and age verification documentsetc.) required for employment; (7) Any monetary advancement provided
to the workers for travel or as confirmation of employment (without riskof debt bondage); (8) Introduction of the workers to the plantation management; (9) Negotiation of the working conditions and compensation
with plantation management; (10) Setting and monitoring realistic worktargets (with acceptable working hours and provision of fair compensation); (11) Arrangements for housing/accommodation of the workers(free of cost, sufficient quality and without restrictions of movement);(12) Resolution of worker grievances or complaints that may arise whileworking on the plantations; (13) Access to services (such as medical,
child care in the case of families, schools for the children of workers,
legal advice etc.); (14) Actual compensation (cash and in-kind benefits)
paid to the workers and the wage disbursement schedule; (15) Free
repatriation of the workers at the end of their contracts.

Certification bodies
International labor unions and confederation of unions
Industry associations
External auditors
Workers
Organized labor recruitment agencies
Independent labor contractors
International civil society organizations
Local government
Local civil society organizations
International traders and processors
International companies
Local or regional authorities
National and local labor unions
Small-scale palm oil producers
Businesses operating large plantations
0

20

40

60

80

100

FIGURE 11: INDONESIA – BIGGEST INFLUENCERS ON RECRUITMENT PRACTICES AND WORKING CONDITIONS - ALL ACTIVITIES

www.fairlabor.org / www.tcgfsocial.com

48

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Certification bodies
Workers
Industry associations
International labor unions and confederation of unions
Organized labor recruitment agencies
Local government
Local civil society organizations
Local or regional authorities
Independent labor contractors
International civil society organizations
External auditors
National and local labor unions
Small-scale palm oil producers
Businesses operating large plantations
0

10

20

30

40

50

60

FIGURE 12: MALAYSIA – BIGGEST INFLUENCERS ON RECRUITMENT PRACTICES AND WORKING CONDITIONS - ALL ACTIVITIESFour of the six multinational company
respondents reported that their organizations
had begun efforts to address the labor
recruitment process. Most of these efforts

www.fairlabor.org / www.tcgfsocial.com

were in the planning or policy development
phase at the time of the interviews. Companies
reported plans to conduct in-field assessments
in 2018.

49

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIACONCLUSIONS
Addressing forced labor in the palm oil sector,
particularly in Indonesia and Malaysia, is a
critical endeavor in order to protect andimprove the lives of millions of workers. Labor
issues in palm oil production are increasingly
the focus of advocates for sustainability,
government leaders around the world, andindividual consumers. The Consumer Goods
Forum has the opportunity to play a leadershiprole in meeting the challenges ahead. The
following recommendations, based on the
research CGF commissioned, reflect the inputof key stakeholders and the analysis of the Fair
Labor Association.
Lead lobbying efforts among the industry andkey constituencies on forced labor issues.
Advocate for improvements on forced labor,
recruitment practices, issuance of identity
cards, work permits, and contracts for workers,
among CGF members, palm oil companies andgrowers, and the Indonesian and Malaysian
governments.
Facilitate multi-stakeholder and sectoral
dialogue and regional collaborations withlocal governments.
FLA recommends CGF build the capacity of its
membership to work with their supply chain
partners to address issues in the recruitment
process and at the worksite level. Develop
a cascading model so the awareness canpenetrate the rest of the upstream supply chain.
Conduct deep-dive research that informs
members and the industry overall107.
Stakeholders mentioned research topics such as:(a) labor recruitment processes and migration
corridors; (b) Indonesia on production targets(quotas); (c) worker demographic profiling,www.fairlabor.org / www.tcgfsocial.com

TABLE 6: A NUMBER OF ROLES FOR CGF WERE
IDENTIFIED THROUGH RESEARCH
MOST SUITED ROLES FOR CGF

TIMES MENTIONED

Advocacy and lobbying(including raising awareness)

20

Research and knowledge sharing

11

Improving the existing assessments social impact assessments and audits

11

Multi-stakeholder, sectoral, or regional
collaboration and dialogue

10

Improving existing schemes, mechanisms,
standards

8

Ensuring commitment and responsibilities

7

Training and capacity building

7

Taking actions in case of non-compliance7

Reporting compliance status (monitoring)

5

Agree and develop time-bound targets

2

Measuring Impacts

2

Mobilizing resources and funding

2

including assessing workers’ life cycles108; and(d) wage payments and the link to procurement
price.
Facilitate knowledge sharing for its members
and for the larger social good.
Companies and stakeholders agreed that there
is a role for CGF to publicly communicate tobring attention to topics that have industry- andregion-wide scope.
107 Several stakeholders participating in the study recommended thatthe results of the study be shared with the respondents and made public.
108 Agents also supply workers to other sectors and commodities; itis hence beneficial to look at the movement of labor across commodities. They may also end up in supply chain of the same or other CGF
members.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Improve the existing social impact assessment
and assessment methodologies.
Address gaps and adopt solutions suggested
by stakeholders through the CGF’s Sustainable
Supply Chain Initiative: identify experts to assist
in defining robust and common forced laborassessment frameworks and develop tools toincorporate workers’ voices. Use what is learned
to improve existing schemes, certifications, andstandards.
Work towards improvement of certification
and auditing systems.
CGF should advocate for robust reforms incertification standards to better align with theFree and Fair Principles109. Improve auditing
systems through higher quality audits andindependent audits and include proceduresthat will mitigate forced labor situations on
the ground. CGF can play a role in setting up
or supporting community-based grievancemechanisms.
Drive members to be ‘braver’ and ensure CGF
members take tangible actions to demonstrate
their responsibilities and commitments.
Coordinate the efforts of industry members toenhance transparency, ensure that members
source sustainably, and develop time-boundtargets110. Engage members more fully inresolution of forced labor issues and impact
measurement. Instill a sense of urgency with aneye on implementation. A public time-boundaction plan with clear time-sensitive targets
would be helpful for that111.
Recommendations for companies and palm
oil companies, include (a) mapping exercises;(b) defining terms and conditions of ethicalrecruitment for plantations and recruitment
agencies; (c) strengthening contracts andtrainings for palm oil companies and plantations;(d) improving grievance handling mechanisms
based on the UNGP’s eight effectivenesscriteria112; (e) enhancing communication of

www.fairlabor.org / www.tcgfsocial.com

clear employment terms and conditions andrights to workers; and (f) bettering verificationof recruitment processes and quota systems at
the plantations.
Respondents expressed their appreciation of
the steps taken by CGF to address forced labor.
The commitment of CGF to address forced laboris considered important, and the actions takenby the FLA, including the scoping exercise,have been welcomed. Many respondents feelthat CGF is taking responsibility and using its
leverage and influence to work on the important
topic of forced labor. Through the three Priority
Industry Principles and the research with the Fair
Labor Association, CGF has raised expectationsof the various stakeholders who expect CGF toplay an influencing role in addressing forcedlabor in the palm oil sector.

109 https://www.humanityunited.org/wp-content/uploads/2015/03/PalmOilPrinciples_031215.pdf
110 For example, being explicit about what ‘no fee’ means, and what
its scope is. Is it only the visa fee or could it also include the expenses
related to transit, medical examination, or other expenses incurred aspart of the recruitment process?
111 Some respondents expressed doubts that the CGF will sufficiently
embrace the principles and take up a proactive and progressive approach for identifying, facilitating and striving for concrete and specificsolutions, including improved traceability and transparency. CGF was
said to be able to make a difference if it were to align with the mostprogressive companies and ensure that it does not lower the bar to accommodate members that lag behind.
112 Legitimate: having a clear, transparent and sufficiently independent
governance structure to ensure that no party to a particular grievanceprocess can interfere with the fair conduct of that process; Accessible:
being publicized to those who may wish to access it and providing adequate assistance for aggrieved parties who may face barriers to access,including language, literacy, awareness, finance, distance, or fear of
reprisal; Predictable: providing a clear and known procedure with a timeframe for each stage and clarity on the types of process and outcome
it can (and cannot) offer, as well as a means of monitoring the implementation of any outcome; Equitable: ensuring that aggrieved parties
have reasonable access to sources of information, advice and expertisenecessary to engage in a grievance process on fair and equitable terms;
Rights-compatible: ensuring that its outcomes and remedies are inaccordance with internationally recognized human rights standards;
Transparent: providing sufficient transparency of process and outcome
to meet the public interest concerns at stake and presuming transparency wherever possible; non-State mechanisms in particular shouldbe transparent about the receipt of complaints and the key elements of
their outcomes; Based on dialogue and engagement: focusing on processes of direct and/or mediated dialogue to seek agreed solutions, andleaving adjudication to independent third-party mechanisms, whether
judicial or non-judicial.

51

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAANNEX 1: In-depth Literature Review
1.

"Exploitative labor practices in the global palm oil industry," Humanity United, 2012.

2. "Indonesia’s palm oil industry rife with human rights abuses: The human toll of the palm oilboom," E. Benjamin Skinner, Bloomberg/Newsweek, 2013.
3. "The law of the jungle: Corporate responsibility of the Finnish palm oil purchases," Finnwatch,
2014.
4. "Rapid assessment: Labor risks in palm oil production: Findings from multi-country research,"
Verité, 2014.
5. "Who watches the watchman: Auditors and the breakdown of oversight in the RSPO,"
Environmental Investigation Agency, 2015.
6. "Working conditions at the IOI Group’s oil palm estates in Malaysia: A follow-up study,"
Finnwatch, 2016.
7. "Vulnerable and exploited: 7 things we learnt about migrant labor in palm oil," The Guardian,
2016.
8. "The great palm oil scandal: Labor abuses behind big brand names," Amnesty International,
2016.
9. Untitled Assessment of palm oil industry in Indonesia and Malaysia by UNICEF, 2017
(unpublished).
10. “Palming off Responsibility - Labour rights violations in Indonesian palm oil sector”, CNV and
SOMO, 2017.
11. “Cutting deforestation out of the palm oil supply chain – Company Scorecards”, Greenpeace,
2016.
12. "The Human Cost of Conflict Palm Oil, worker exploitation in Indonesia", Rainforest Action
Network, 2016.
13. "Strategic Framework on a National Action Plan on Business and Human Rights for Malaysia",
2015.
14. “Palm oil, environmental destruction, stolen land”, Sudwind, 2016.
15. "Free and fair labor in palm oil production - Principles and implementation guidance",
Humanity United, et al, 2015.
16. “------" _Hotspot Research - Malaysia - Palm Oil, “-------------", 2017. (The funder of the research
confidentially shared the report).
17. “Strengthening Protection Against Trafficking in Persons in Federal and Corporate Supply
Chains”, Verité, 2017.

www.fairlabor.org / www.tcgfsocial.com

52

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAANNEX 2: Stakeholder Mapping
STAKEHOLDER MAPPING — PALM OIL IN INDONESIA AND MALAYSIA
NAME OF THE
ORGANIZATIONTYPE OFORGANIZATIONCOUNTRYSHORT DESCRIPTION OF THEIR WORK IN PALM OIL SECTOR

ACTIVE IN
INDONESIAACTIVE IN
MALAYSIAXRESPONDENTS TO THE STAKEHOLDER SURVEY
UNICEF
Internationaland country
offices

UN Agency

Switzerland,
Indonesia
and Malaysia

UNICEF engaged with the palm oil sector and reviewed theconditions of children there to strategically build on goodpractices as models for the entire industry. As part of the rollout of the Children's Rights and Business Principles (CRBP),
in 2016 UNICEF Indonesia launched a program that brings
together palm oil producers, international brands, industry
initiatives and government partners to strengthen existing
regulations and develop models of good practice that canbe replicated throughout the sector. UNICEF is engaging
with companies (international brands and local producers),
governments and industry initiatives in order to improve theunderstanding, commitment and action to implement betterbusiness practices that respect and support the rights ofworkers, families and children – based on the Children’s
Rights and Business Principles.
https://www.unicef.org/csr/palm-oil.html
https://www.unicef.org/about/annualreport/files/
Malaysia_2016_COAR.pdf

X

Humanity
UnitedCSO

USA

Humanity United is a foundation dedicated to bringing
new approaches to global problems that have long been
considered intractable. We build, lead, and support efforts
to change the systems that contribute to problems likehuman trafficking, mass atrocities, and violent conflict. HU
supported the development of the principles and guidance
for free and fair labor in palm oil production (March 2015).
The Principles and Guidance focus on the hired labor
workforce on palm oil plantations and mills, where the risk ofworker exploitation is greatest.
HU is not focusing on palm anymore. No projects running.
https://humanityunited.org/

X

Tenaganita

CSO

Malaysia

A Malaysian human rights organization founded in 1991
working on issues relating to migrants, refugees, humantrafficking. Doing social audits in oil palm plantations,research and advocacy. Tenaganita looks at the conditionsof work, wages, health and safety and highlight issues ofconcern with the management and consumer groups.
www.tenaganita.net

Oxfam UK andOxfam Novib

CSO

UK andNetherlands

Oxfam has been working in Indonesia to contribute towards
finding lasting solutions to poverty and suffering in the
country since 1957. Our present portfolio of work focuses on
working to achieve Gender Justice, Economic Justice andRights in Crisis. Oxfam calls on companies such as member
of RSPO to demonstrate progress in the fulfillment of
employment rights, particularly on the issue of decent workand recognition for women workers. Activities: participate
to RSPO's roundtable meeting every year, meeting anddialogue with palm oil companies
Actively support the involvement of worker representatives
as a valid and imperative stakeholder category in the RSPO.
Activities: training for workers, workshop, facilitate meetingwith companies, published a module for workers andprinciple and guidance for workers.
https://www.oxfam.org/en/research/fair-company-communitypartnerships-palm-oil-development

www.fairlabor.org / www.tcgfsocial.com

X

X

53

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

X

Finnwatch

CSO

FinlandFinnwatch is an NGO focused on global corporate
responsibility and seeks to promote ecologically, sociallyand economically responsible business by influencing
companies, economic regulation and public discourse.
Finnwatch has been focusing on doing research into working
conditions in Peninsular Malaysia (using IOI Group as an
example case) as well as assessing effectiveness of leading
palm oil certifications in relation to labor rights monitoring.
The research exposed serious shortcomings in the working
conditions at the oil palm estates in Malaysia and led toclose dialogue with the palm oil industry. In collaboration
with international NGOs, they developed guidelines forfree and fair labor in palm oil production. In response to
our recommendations, several companies have acted tostrengthen labor rights protections in their supply chains.
https://www.finnwatch.org/en/what-we-do
https://www.finnwatch.org/images/pdf/palmoil.pdf

Proforest

CSO

UK

Proforest works with palm oil producers, processors, buyers
and investors to help them produce and source palm oil
responsibly. We provide training and capacity building tobuild a more sustainable palm oil sector.
Proforest helps people to manage and source natural
resources sustainably. We are a not-for-profit group thatworks with governments, producers and other private sector
partners, as well as civil society organizations and NGOs
throughout agricultural and forest product supply chains.
http://www.proforest.net/en/areas-of-work/palm-oil
http://www.proforest.net/en/publications

X

X

VeritéCSO

USA,South Asia

Verité’s Program on Ethical Labor Practices in Palm Oil
Production seeks to help companies and other stakeholders
respond to issues pertaining to labor conditions in the palm
oil supply chain through a series of key steps, beginning with
understanding and analysis, and ending with direct action toresolve problems.
Started in 2008 with palm oil. Research in Philippines onoverseas workers, partly go to Indonesia for work in palmoil. In 2011 specifically on labor issues in palm oil. Verité
became a RSPO member in 2013. Trying to strengthen
the systems to focus also on social and labor certifications.
Conducted trainings for certifying bodies, trainings andawareness raising for growers in Indonesia.
https://www.verite.org/project/our-work-in-palm-oil/

X

X

IDH

CSO

Netherlands

IDH is a public-private partnership facility that supports
development of sustainable commodity supply chains. IDH
is funded by the Dutch, Swiss and Danish governments.
The Palm Oil program of IDH supports the production of
traceable and sustainable palm oil at scale. They do thisthrough partnerships with local and international companies
and governments in Indonesia and Malaysia, and by working
on the demand side in Europe. They have supported
initiatives in Palm Oil, namely, Community Oil Palm
Outgrowers Liberia, Dutch Alliance Sustainable Palm Oil,European Sustainable Palm Oil (ESPO), and Traceability
Working Group.
Our focus remains on avoiding deforestation andgreenhouse gas emissions due to expansion of palm oil,while also improving the productivity and sustainability
practices of smallholders. Main focus on Indonesia.
https://www.idhsustainabletrade.com/news/futuresustainability-within-palm-oil-industry/X

X

www.fairlabor.org / www.tcgfsocial.com

54

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Rainforest
Action Network(RAN)

Certification
Body

UK

RAN's Conflict Palm Oil campaign has been targeting someof the biggest, most well-known snack food brands acrossthe globe since 2007. RAN works at the intersection ofpreserving rainforests, protecting the climate and upholding
human rights through the lens of corporate accountability.
We approach this work through a three-pronged theory ofchange:• Target the companies and industries that act as thegreatest drivers of deforestation and climate change;• Partner with and support frontline communities who feel thegreatest impact from — and who hold the best strategies toovercome — these challenges;• Identify and move the legislative and regulatory levers ofchange that will create the greatest positive impact.
Our goal is to achieve systemic shifts in the international
industries that are primarily responsible for driving tropicaldeforestation, climate change and the human rights abuses
that far too frequently accompany those practices.
https://www.ran.org/palm_oil

X

SOMO

Research
Institute

Netherlands

The Centre for Research on Multinational Corporations(SOMO) is a critical, independent, not-for-profit knowledge
center on multinationals. Since 1973 we have investigatedmultinational corporations and the impact of their activities
on people and the environment. We provide custom-madeservices (research, consulting and training) to non-profit
organizations and the public sector. SOMO did researchin Indonesia and has published the report 'Palming Off
Responsibility'. It focuses on labor rights violations and childlabor in the palm oil sector and was commissioned by CNV
international.
https://www.somo.nl/roundtable-sustainable-palm-oil-rspocompanies-violating-labour-rights-human-rights-indonesia/

X

CNV

Trade Union

Netherlands

Commissioned SOMO research on forced labor inIndonesian palm oil sector. They have conducted casestudies in Indonesia revealing serious labor rights violations
in palm oil sector. CNV International works to promote
decent work conditions internationally. Part of its objective isto promote sustainability in supply chains by strengthening
the position of employees in standing up for their rights.
One of the focus supply chains is that of Indonesian palmoil. CNV International is collaborating with an Indonesianfederation of trade unions called Hukatan, or the Federationof Trade Unions of Forestry, Logging, and Plantations(Federasi Serikat Buruh Kehutanan, Perkayuan dan
Perkebunan).
https://www.cnvinternationaal.nl/en/our-work/civicengagement-alliance

XInternational
Labor Rights
Forum

CSO

USA

ILRF is a human rights NGO that advances dignity andjustice for workers in the global economy.
In partnership with Indonesian NGOs, ILRF has conducted
field research into labor conditions on palm plantations inNorthern Sumatra and Kalimantan and co-published reports
outlining the findings. ILRF has co-hosted workshops to train
Indonesian civil society on how to document common laborabuses in the palm sector, communicate with the media, andseek redress from the companies involved. In partnershipwith Malaysian NGOs, ILRF meets with a range ofstakeholders to promote the adoption of policies to addressrisks of forced labor among migrant workers. ILRFs work is
focused on both improving palm oil workers’ conditions ofwork and ability to have a voice in designing/implementing
mitigation and remediation initiatives.
https://www.laborrights.org/industries/palm-oil

Xwww.fairlabor.org / www.tcgfsocial.com

X

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

X

Wild Asia

CSO

Malaysia

Wild Asia has built up the experience of palm oil producers
in Malaysia, Indonesia, Papua New Guinea, Solomon
Islands, Thailand, Cameroon and Ghana. In 7 years,
Wild Asia completed 92 assignments and trained over
2,019 professionals and NGOs. A summary of the major
assignments includes: Corporate Due Diligence or “Supply
Chain” Risk Assessments, Technical Management Support(plantations to small farmers), Biodiversity and Social
Assessments, Training in RSPO, People & Environment.
In Indonesia they have done assessments, due diligence,research for palm oil concessions. In Malaysia Wild Asia isdoing assessments, providing training, supporting RSPO
certification. They focus on information gathering andproviding recommendations. They have no intervention
projects on the ground.
http://oilpalm.wildasia.org/

National Unionof Plantation
Workers(NUPW)

Trade Union

Malaysia

National Union of Plantation Workers (NUPW) is a tradeunion organization registered under Trade Union Act 1959
(Act 262). The role of NUPW is confined to Industrial
Relations i.e. Collective Bargaining and Collective
Agreements, Grievance Redressal Procedures, issues
concerning Decent Work promoted by ILO and theeconomic and social well-being of the plantation workers
in compliance with Legislation, Collective Agreements with
employer and employer Trade Union, ILO Conventions
Ratified by the Government and Recommendations adopted
by the Government. The activities of NUPW are confined
to Peninsular Malaysia only in compliance with Statutory
Provisions of Trade Union Act. The NUPW began in 1946
after World War 2 as Regional Trade Union Organizations in
Peninsular Malaysia.

Yayasan
Tropenbos
Indonesia /Tropenbos
International
(TBI)

CSO

Indonesia

Tropenbos Indonesia is the affiliation of Tropenbos
International in Indonesia. It officially became a local
foundation (yayasan) on 31 December 2016. At present
the working site of Tropenbos Indonesia under the Green
Livelihoods Alliance (GLA) program is located in Gunung
Tarak landscape, West Kalimantan involving three wellknown areas: Gunung Palung National Park, Gunung Tarak
National Park, and Sungai Putri Peatland Protection Forest.
They have published an article on the land use in three
regions of Indonesia (Sumatra, Kalimantan, and Papua), in
Malaysia, and in Papua New Guinea in industrial scale oilpalm plantations.
http://www.tropenbos.org/publications/oil+palm+and+land+use+change+in+indonesia,+malaysia+and+papua+new+guinea

X

Aid
Environment

CSO

Netherlands

Research and consultancy on social and environmental
issues in the palm oil and forestry sectors. Specific expertisein the fields of community land use, plantation development,
HCV and HCS, FPIC, social conflict mediation, certification
standards setting, landscape approach, and identificationof companies contravening No Deforestation, No Peat, No
Exploitation (NDPE) policies.
Engaging with, informing and training of private sector,
NGOs, and governments and financiers on sustainable palm
oil practices. Aidenvironment is designing a smallholderfriendly SEIA (Social and Environmental Impact Assessment)
as a member of RSPO (Roundtable for Sustainable Palm Oil).
www.chainreactionresearch.com; www.aidenvironment.org

X

www.fairlabor.org / www.tcgfsocial.com

X

X

X

56

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Forest Peoples
Programme

CSO

UKInternational human rights group based in UK with
consultative status at UN (ECOSOC) and activities in 22
countries that supports the rights of forest peoples to selfdetermination and collective rights.
Indonesia: 13 years of intensive work on palm. Malaysia:
Longer but less intensive work since 1990. In 2012, Forest
Peoples Programme carried out a series of field studies
in RSPO member/certified companies across Southeast
Asia and Africa to provide detailed field information on how
and whether the right to Free Prior and Informed Consent
is being applied adequately by companies, to expose
any malpractice of palm oil companies and to argue for astrengthening of national laws and policies and of the RSPO
procedures and standards.
http://www.forestpeoples.org/topics/responsible-finance/
private-sector/palm-oil-rspo

X

X

Roundtable on
Sustainable
Palm Oil(RSPO)

Certification
Body

Various
Locations

RSPO is a not-for-profit association that unites stakeholders
from seven sectors of the palm oil industry - oil palm producers,
palm oil processors or traders, consumer goods manufacturers,
retailers, banks and investors, environmental or nature
conservation NGOs and social or developmental NGOs - todevelop and implement global standards for sustainable palmoil. The RSPO has developed a set of environmental and social
criteria which companies must comply with in order to produce
Certified Sustainable Palm Oil (CSPO). The RSPO has morethan 3,000 members worldwide who represent all links along
the palm oil supply chain.
Formation of the RSPO Labour Task Force in March 2017.
The RSPO’s Principles & Criteria are undergoing a review
and this includes a review on the current labor standards toensure protection.
www.rspo.org

X

X

Malaysian Palm
Oil Certification
Council(MPOCC) /Malaysian
Sustainable
Palm Oil(MSPO)

Certification
Body

Various
Locations

Independent non-profit organization to develop and operate
the Malaysian Sustainable Palm Oil (MSPO) Certification
Scheme. Incorporated on December 2014 under Companies
Act 1965. Tasked to develop and operate the Malaysian
Sustainable Palm Oil (MSPO) Certification Scheme.
Governed by 13-Member Board of Trustee with representationfrom Oil palm industry associations, Academic and R&D
institutes, Smallholders organizations, Government, NGOs
and Civil society. Operating the MSPO Certification Schemewith standards on labor-related performance.
https://www.mpocc.org.my/

IndonesiaUNDP / SPOI
(Sustainable
Palm Oil
Initiative)

UNDP

Indonesia

UNDP supports the operationalization and optimizationof ISPO (Indonesia Sustainable Palm Oil standard), as itcovers all producers in Indonesia to ensure compliance with
the Indonesian legal system.
To coordinate and to mobilize critical resources, the UNDP
and the Ministry of Agriculture joined forces in 2014. The
partnership, known as the Sustainable Palm Oil Initiative(SPOI), aims to catalyze and scale-up fundamental
change by defining and supporting long-term sustainable
solutions. This will be done through a government-led
multi-stakeholder National Action Plan (NAP) that betteraligns national, provincial and district policies with theneeds of the private sector, communities, farmers and theenvironment. Additionally, the initiative aims to improve thecapacity and legality of oil palm smallholders through thestrengthening of the national Indonesia Sustainable Palm Oil(ISPO) standard, a sustainable palm oil certification systemmandated by the government.
http://www.id.undp.org/content/indonesia/en/home/ourwork/
environmentandenergy/sustainable-palm-oil-initiative--spo-/
pilot-project.html

www.fairlabor.org / www.tcgfsocial.com

X

X

57

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

MalaysianPalm Oil Board(MPOB)

Government

Malaysia

Government body responsible for the promotion anddevelopment of the palm oil sector in Malaysia.
MPOB is the premier government agency entrusted toserve the country’s oil palm industry. Its main role is topromote and develop national objectives, policies andpriorities for the wellbeing of the Malaysian oil palm industry.
It was incorporated by an Act of Parliament (Act 582) andestablished on 1 May 2000, taking over, through a merger,
the functions of the Palm Oil Research Institute of Malaysia(PORIM) and the Palm Oil Registration and Licensing
Authority (PORLA).
www.mpob.gov.my

ELSAM

CSO

Indonesia

The Institute for Policy Research and Advocacy, a humanrights organization, based in Jakarta, established sinceAugust 1993. To actively participate in the efforts todevelop, promote and protect civil and political rights andother human rights, as mandated by the 1945 Constitution
and Universal Declaration of Human Rights (UDHR), has
become ELSAM’s driving objective. Advocacy agenda
of palm oil plantation cases becomes important sinceIndonesia is the global leader of palm oil plantations thatnegatively impacts both the environment and human rights.
http://elsam.or.id/en/

Resources
Humaines
Sans Frontieres(HumanResources
without
Borders)

CSO

FranceRHSF is a non-governmental, non-profit organization
set up in 2006 by a team of HRM and Corporate Social
Responsibility (CSR) professionals (Managers, HRD) andacademic experts. Projects to address child labor, forcedlabor and abusive working conditions, including in the palm
oil sector in Malaysia.
http://www.rhsansfrontieres.org/en/

Nina
Hendarwati

Consultant

X

X

X

Social Specialist Consultant

OTHER STAKEHOLDERS IDENTIFIED
Amnesty
Internationaland country
offices

CSO

Switzerland,
UK,
Indonesia
and Malaysia

Has done research on labor rights in the palm oil sector.
https://www.amnesty.org/en/latest/news/2016/11/palm-oilglobal-brands-profiting-from-child-and-forced-labour/

X

X

International
LabourOrganization

International
Organization

Malaysia andIndonesia

Pilot project on child labor in palm oil plantation
http://www.ilo.org/jakarta/areasofwork/
WCMS_126206/lang--en/index.htm

XX

Coalition to
AbolishModern Day
Slavery in Asia

CSO

Malaysia

No project in Palm Oil Sector

Mondiaal FNV

Trade Union

Netherlands

Mondiaal FNV supports the improvement of labor rights andconditions on oil palm plantations in Indonesia and for thispurpose finances activities of OPPUK, a labor organizationfrom Medan, Sumatra.
https://www.fnv.nl/over-fnv/internationaal/mondiaal-fnv/
duurzaam-ondernemen/palmolie_industrie/

Migration
Policy Institute

CSO

USA

No project in Palm Oil Sector

BSR Asia

CSO

Hong Kong

No project in Palm Oil Sector

www.fairlabor.org / www.tcgfsocial.com

X

58

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

X

Earth
Innovation
Institute

CSO

SanFrancisco,USA

One of the work related to palm oil industry is smallholder
oil palm farmers mapping and monitoring initiative - allsmallholder oil palm farmers have their lands mapped andregistered in an online monitoring system.
The purpose of the visit was to learn more about thesmallholder mapping and monitoring initiative: a massive
initiative to ensure that all smallholder oil palm farmers
have their lands mapped and registered in an online
monitoring system. The work will ensure that companies andconsumers will know where palm oil is produced and that is
free from deforestation.
http://earthinnovation.org

Ceres

CSO

USA

Ceres convened a diverse group of over 18 nonprofit
organizations and investor groups to develop common
reporting guidance for companies to improve transparency
and help all stakeholders understand the gaps in palm oil
implementation.
https://www.ceres.org/

Business andHuman Rights
Resources
CenterCSO

USA and UK

Several companies react on the following projects, namely,
Equatorial Palm Oil, Oil Palm Uganda, Palawan Palm &Vegetable Oil Mills, and Thaibuanthong Oil Palm Company.
https://business-humanrights.org/en/search-results?langcod
e=en&keywords=palm+oil&pagenum=0

Land
Empowerment
Animals People(LEAP)

CSO

Malaysia

No specific project in Palm Oil Sector
https://www.leapspiral.org/

WWF Indonesia(or global/UK)
WWF Malaysia

CSO

Malaysia

WWF is working on a number of fronts regarding the palm
oil sector. WWF is member of RSPO and the Palm Oil
Innovation Group (POIG). WWF encourages all players in
the palm oil value chain to build upon the asks of the RSPO
and to join or support the work of POIG.
http://wwf.panda.org/what_we_do/footprint/agriculture/
palm_oil/solutions/

OPPUK

CSO

Indonesia

OPPUK, the labor organization from Medan, Sumatra stands
up for the interests of the workers in the oil palm plantations.
OPPUK was one of the driving forces behind the Manifesto
Free and Fair Labor in Palm Oil Production.
http://oppuk.or.id/id_ID/

X

The Forest
Trust

CSO

Switzerland

TFT is a global non-profit organization that helps companies
and communities deliver Responsible Products. We acton the ground in forests, farms and factories to help
create products that respect the environment and improve
people's lives. TFT has developed an innovative approach
to transform the palm oil industry and we believe thatcertification alone is not the answer. Since 2010 TFT has
worked with palm oil growers, mills and processors in morethan 20 countries. Our members include Wilmar, Golden
Agri-Resources, Cargill and Musim Mas, representing
around 80% of global trade.
http://www.tft-earth.org/what-we-do/product-groups/X

WRI (World
Resources
Institute)

CSO

USA

WRI has published a method enabling rapid identificationof already-deforested land that could be suitable forsustainable oil palm cultivation in 2012. WRI Indonesia
works with leaders in government, business and civil society
to protect Indonesia’s environment while maintaining its
economic potential. We aim to help reform the country’s
massive forestry and agriculture sectors.
http://www.wri.org/

X

www.fairlabor.org / www.tcgfsocial.com

X

X

59

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Coalition to
Abolish Modern
Day Slavery in
Asia

CSO

Malaysia

No specific project in Palm Oil Sector
http://www.camsa-coalition.org/en/

Palm Oil
Innovation
Group (POIG)

Multistakeholder
Organization

Malaysia

The Palm Oil Innovation Group (POIG) aims to support
The RSPO through building on RSPO standards andcommitments and by both demonstrating Innovation
to implement RSPO existing standards as well as withadditional critical issues. POIG focuses on three thematic
areas of environmental responsibility, partnerships with
communities, and corporate and product integrity. POIG
focuses on creating innovations in the palm oil industry andthe promotion of these innovations.
http://poig.org/

Sabah
Plantation
Industry
Employees
Union

Trade Union

Malaysia

Workers union mostly linked to Sime Darby Plantation
workers. TUC affiliate

BOS
Foundation(BorneoOrangutan
Survival)

CSO

Indonesia

No specific project in Palm Oil Sector

BORA (Borneo
Rhino Alliance)

SectorOrganization

Malaysia

The role of BORA is to care for the rhinos held in facilities
in Sabah and to seek and capture any last rhinos that might
exist, doomed in the wild.
No project in Palm Oil Sector

Myanmar

FFI launched the first workshop on the development ofa sustainable plantation sector in Myanmar to seek theopportunity to develop its palm oil sector sustainably byplanning for agricultural conversion in areas that are alreadyseverely degraded and leaving forested habitat untouched.
http://www.fauna-flora.org/news/myanmars-palm-oilindustry-heads-for-a-sustainable-path/

FFI (Myanmar)

AIM Progress

SectorOrganization

Belgium

AIM-PROGRESS recommends that members share
Sustainable Palm Oil Sourcing Guidelines within theirorganizations to ensure awareness and accelerate
implementation where relevant.
http://www.aim-progress.com/page.php?id=110

IPOA
IndonesianPalm Oil
Association(GAPKI IPOA)

SectorOrganization

Various
Locations

Indonesian Palm Oil Association (GAPKI IPOA)
https://gapki.id

UTZ

Certification
Body

Netherlands

UTZ and RSPO have a shared vision of making sustainable
farming the norm and therefore partnered in 2007 in
the domain of traceability. Since 2012, UTZ offered thetraceability platform RSPO eTrace to the RSPO and its
members to follow certified volumes of palm (kernel) oil
through the Identity Preserved, Segregated and Mass
Balance supply chains.
https://utz.org/what-we-offer/traceability-system/traceabilityservice/palm-oil/

www.fairlabor.org / www.tcgfsocial.com

X

X

X

X

X

60

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Indonesia
Business
Council for
Sustainable
Development(IBCSD)

Indonesia

IBCSD provides a platform for businesses to share andpromote best practice in tackling risks and taking advantage
of opportunities related to sustainable development. It will
also act as a key partner to government and civil society
providing business input and solutions for Indonesianpolicies on sustainability issues. The key aims of the IBCSD
are to provide business leadership as a catalyst for change
towards sustainable development and to support thebusiness license to operate, innovate and grow in a world
increasingly shaped by sustainable development issues.

X

Malaysian Palm
Oil Council(MPOC)

SectorOrganization

Malaysia

Business council promoting and representing the interests of
the Malaysian palm oil industry
www.mpoc.org.my

X

Malaysian Palm
Oil Association(MPOA)

SectorOrganization

Malaysia

Act as the single united voice of the Malaysian oil palmand other plantation tree crop industry. Represent oil palmand other plantation crop interests to government, various
statutory bodies, stakeholders and external parties. Promote
the future growth and profitability of the industry and support
members by providing specific support services. Provide
representation for the industry at both the domestic andinternational levels.
www.mpoa.org.my

X

European Palm
Oil Alliance(EPOA)

SectorOrganization

Netherlands

The European Palm Oil Alliance (EPOA) has beencommitted to create a science based and balanced view on
the nutritional and sustainability aspects of palm oil. EPOA
communicates the full palm oil story and facilitates theEuropean debate on palm oil. EPOA members work together
towards a shared goal and engage in a range of information
sharing and advocacy activities and events to drive common
interest. EPOA cooperates with partners including tradeassociations of food manufacturers, advocacy groups,
national alliances and informal networks.
https://www.palmoilandfood.eu/en/european-palm-oil-alliance

Ministryof HumanResource
Development

Government

Indonesia
and Malaysia

Responsible for labor law policy and enforcement, including
inspections

Ministry of
Plantation
Industries andCommodities

Government

Putrajaya,
Malaysia

Overseeing the palm oil Industry. Launched a committee toinvestigate labor abuses in 2011www.kppk.gov.my/mpic

Solidaridad

CSO

Netherlands
andIndonesia

Solidaridad is an international network organization withpartners all over the world. Production challenges such as
poor farming practices and land mismanagement in thepalm oil sector need focused solutions. We seek to provide
country and context-specific solutions for smallholders,mills, and companies by bringing stakeholders together andsupporting the implementation of sustainable practices.
Working with palm oil traders, corporations, and retailers is
critical in fostering sustainability within the palm oil industry
because they can set the tone for practices throughout
the supply chain. Solidaridad supports palm oil workers
and producers to bring their agriculture under sustainable
management.
https://www.solidaridadnetwork.org/palm-oil

XGreenpeace

CSO

Various
LocationsGreenpeace focuses on conservation of tropical rainforestand peatland in Indonesia
https://www.greenpeace.org.uk/what-we-do/forests/
indonesia/

X

www.fairlabor.org / www.tcgfsocial.com

X

X

X

61

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Dutch Banking
SectorAgreement /Rabobank

MSI

Netherlands

Palm oil is one of the sectors mentioned in the Dutch
Banking Sector Agreement for which they will do a value
chain mapping. Besides palm oil, cocoa and gold are
mentioned. This agreement was developed and signed by
the Dutch Banking Association, Dutch Governments, NGOs
and trade unions. 14 banks have signed up as adhering
parties.
http://www.internationalrbc.org/banking/agreement?sc_
lang=en

WALHI

CSO

Indonesia

WALHI is Indonesia’s largest environmental organization
and, like GLOBAL 2000, part of the Friends of the Earth
network. Land and environmental conflicts relating to oilpalm plantations have been one of the biggest issues dealt
with by WALHI for many years.
https://walhi.or.id/

X

Sawit Watch

CSO

Indonesia

Sawit Watch was set up in 1998 and since then, we havebuilt a network of over 138 individual members and local
contacts working with dozens of local communities in
Sumatra, Kalimantan, Sulawesi and Papua as well asWest Papua Province. Our mandate is based on the callto support local communities who have lost their forestsand livelihoods because of large-scale oil palm expansion
and for those in forestlands who continue to resist thisdevelopment.
http://www.forestpeoples.org/en/partner/sawit-watch

X

IndonesianPalm Oil
Platform(InPOP)

SectorOrganization

Indonesia

Additional industry responses include the IndonesianPalm Oil Platform (InPOP), established in 2014 to identify
solutions to the sustainability challenges in the supply chain
through multi-stakeholder dialogue. The Indonesian Palm
Oil Pledge (IPOP), which is dedicated to zero-deforestation,is another important initiative, supported by six leading
corporations in the industry.

X

Council of Palm
Oil ProducerCountries(CPOP)

SectorOrganization

Indonesia
and Malaysia

Since 2015, the Governments of Indonesia andMalaysia have been discussing the establishment of theCouncil of Palm Oil Producer Countries (CPOP). This
intergovernmental organization would be established inreaction to the perceived encroachment of IPOP’s zerodeforestation pledge on national interests.

X

Indonesian
National
Commission for
Human Rights(Komnas HAM)

Research
Institute

Indonesia

An independent institution that functions to conduct
research, monitoring, and human rights mediation.

X

Tropical Forest
Alliance 2020
(TFA)

CSO

Switzerland

This initiative was founded in 2012 at Rio+20 after theConsumer Goods Forum (CGF) committed to zero net
deforestation by 2020 for palm oil, soy, beef, and paper
and pulp supply chains. The CGF partnered with the US
government to create the public-private alliance with themission of mobilizing all actors to collaborate in reducing
commodity-driven tropical deforestation. Since June
2015, the TFA Secretariat has been hosted at the World
Economic Forum in Geneva, with financial support from thegovernments of Norway and the United Kingdom.

Dutch Alliancefor Sustainable
Palm Oil(DASPO)

SectorOrganization

Netherlands

The Dutch Alliance for Sustainable Palm Oil (DASPO) is a
joint venture of Dutch branch organizations in the palm oilchain. The members of the DASPO are committed to making
the palm oil chain more sustainable. Sustainable palm
oil is defined as palm oil that is certified according to the
Principles and Criteria of the Round Table for Sustainable
Palm Oil (RSPO) (or equivalent) and is traded according totrading systems approved by the RSPO (or equivalent). TheDASPO is the follow-up to the Task Force Sustainable Palm
Oil from 2010.

www.fairlabor.org / www.tcgfsocial.com

X

62

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIASPOTTCharity
OrganizationUK

SPOTT supports the finance sector and supply chain
stakeholders to meet their own commitments, manage
risks, and engage with companies to incentivize sustainablecommodity production through responsible investment andsourcing.

SERBUNDO(recommended
by OxfamIndonesia)

CSO

Indonesia

SERBUNDO, an alliance of unions and community
organizations whose members and supporters havebeen impacted by the country’s powerful palm industry.
SERBUNDO is an Indonesian Plantation Trade Union, where
they are independent trade unions that focus on oil palm
plantations. Currently they have collaboration with OPPUK
to support labor rights on oil palm plantation, especiallymembers of RSPO. SERBUNDO already had 3 Collective
Bargaining Agreement (CBAs) in Wilmar Group companies.
SERBUNDO office is located in Medan North Sumatra andhas branches in East Kalimantan, Jambi in Sumatera.

X

Hakutan federationof unions inIndonesia

Trade Union

Indonesian federation of trade unions called Hukatan, or
the Federation of Trade Unions of Forestry, Logging, andPlantations (Federasi Serikat Buruh Kehutanan, Perkayuan
dan Perkebunan). Hukatan is member of the International
Trade Union ConfederationX

PUSAKACSO

A non-profit organization established in 2002 by local activists
who have extensive experience in advocacy activities forindigenous peoples’ rights and popular education.

X

Indonesia

Inkrispena

CSO

Indonesia

SOMO and Inkrispena did research together in Indonesia

X

CIFOR

CSO

Various
Locations

The Center for International Forestry Research (CIFOR)
is a non-profit, scientific institution that conducts
research on the most pressing challenges of forest andlandscape management around the world. Using a global,
multidisciplinary approach, we aim to improve humanwell-being, protect the environment, and increase equity.
To do so, we conduct innovative research, develop
partners’ capacity, and actively engage in dialogue withall stakeholders to inform policies and practices that affectforests and people.
https://www.cifor.org/about-cifor/

X

Rainforest
Foundation
Norway (RFN)

CSO

NorwayRFN supports indigenous peoples and traditional
populations of the world's rainforests in their efforts to protect
their environment and fulfill their rights by assisting them in:(1) Securing and controlling the natural resources necessary
for their long-term well-being and managing these resourcesin ways which do not harm their environment, violate theirculture or compromise their future; and (2) Developing themeans to protect their individual and collective rights and toobtain, shape, and control basic services from the state.
https://www.regnskog.no/en/about-rainforest-foundationnorway

The Samdhana
Institute

CSO

Indonesia

The Samdhana Institute works to: (1) Enhance and enrichunderstanding of innovative approaches to sustainable
resource management and broaden options for local
communities. (2) Support efforts to increase understanding,development and implementation of appropriate methods forconflict management and mediation, with a focus on conflictover access to and management of natural resources. (3)Facilitate individual, inter-group and community learningand skills sharing. (4) Provide small grants for community
members, groups, their partners and support organizations
to implement key activities related to these purposes.
http://www.samdhana.org/index.php/programs-and-projects/?get=regio&cod=Indonesia

www.fairlabor.org / www.tcgfsocial.com

X

63

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAXThe Borneo
Initiative

Foundation

Netherlands
andIndonesia

The Borneo Initiative is an international initiative for thepromotion of sustainable forest management among
forest concessions in Indonesia. In partnership with theIndonesian Association of Forest Concessionaires (APHI),
it offers a platform for cooperation between various partnerorganisations dedicated to strengthening sustainable forest
management. Forest concessions are supported with grantfunding, expertise and market links - The Borneo Initiative
organizes annual trade encounters to bring together thecertified Indonesian forest industries and overseas buyers
https://theborneoinitiative.org/

Mighty EarthCampaign
Organization

USA

Mighty Earth is a global campaign organization that works toprotect tropical forests, oceans, and the climate. We aspire
to be the most effective environmental organization in theworld.
http://www.mightyearth.org/about-us/

International
Union of
Foodworkers(IUF)

International
Trade Union

GlobalThe International Union of Food, Agricultural, Hotel,
Restaurant, Catering, Tobacco and Allied Workers'
Associations (IUF) is an international federation of tradeunions representing workers employed in agriculture andplantations; the preparation and manufacture of food andbeverages; hotels, restaurants and catering services; allstages of tobacco processing. The IUF is composed of 418
affiliated trade unions in 128 countries representing over 10
million workers.
http://www.iuf.org/w/?q=node/6551

X

National
Commission on
Human Rights(KomnasHAM)

Commission on
Human Rights

Indonesia

National Human Rights Commission is an independent
institution equal level with other state institutions andconducts assessment, research, education, monitoring andmediation of human rights. It is mentioned in Article 1 of Law
No. 39 of 1999 on Human Rights.
https://www.komnasham.go.id/index.php/about/1/tentangkomnas-ham.html

X

Human Rights
Commissionof Malaysia(SUHAKAM)

Commission on
Human Rights

Malaysia

The Human Rights Commission of Malaysia (SUHAKAM)
was established by Parliament under the Human Rights
Commission of Malaysia Act 1999, Act 597.
http://www.suhakam.org.my/about-suhakam/

HCVNI

Assessment
AgencyIndonesia

The High Conservation Value Network Indonesia (HCVNI)
was established in April 2011 as a response to theincreasing concerns in Indonesia regarding the absenceof an entity to improve and to share the knowledge andskills that could eventually improve the quality of HCV
assessments.
http://hcv-ni.org/pages/about-us/

X

YIARI

CSO

Indonesia

Yayasan IAR Indonesia (YIARI) is an Indonesian non-profit
organisation that runs an orangutan rescue and rehabilitation
centre in Ketapang, West Kalimantan.The main long-termgoal of YIARI is to establish and/or maintain self-sustainingorangutan populations in the wild, by re-establishing an
extinct population, or supplementing a wild population that isunder carrying capacity or not currently large enough to be
viable in the long term. This is relevant for the palm oil when
forests are cleared to make way for oil palm plantations,
hereby disrupting the local wild life.
http://yayasaniarindonesia.blogspot.com/

X

www.fairlabor.org / www.tcgfsocial.com

X

64

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

SPKS

Trade Union

Indonesia

In Indonesia, the Oil Palm Smallholders Union (SPKS) acts
as the voice of lower-level palm oil farmers. It is concernedwith improving the management of the industry through theempowerment of farmers and policy support by providing
education, training and advocacy. It also voices farmers’
concerns on pricing and a more supportive regulatory
framework to increase their welfare.
https://www.forestpeoples.org/en/partner/serikat-petanikelapa-sawit-spks-oil-palm-farmers-unionX

FOKSBI

Public Private
Partnership
PlatformIndonesia

Forum Kelapa Sawit Berkelanjutan Indonesia
www.foksbi.or.id

X

KSBSI

Trade Union

Indonesia

The Indonesian Workers Welfare Union (K-SBSI) is anational trade union centre in Indonesia. It was founded in
1992 and claims a membership of 2.1 million.
http://www.ksbsi.org/index.php/page/link/86/Profil

X

ITUC

Trade Union

BrusselsInternational Trade Union Federation's (ITUC) primary
mission is the promotion and defence of workers’ rights andinterests, through international cooperation between tradeunions, global campaigning and advocacy within the major
global institutions.
Its main areas of activity include the following: trade unionand human rights; economy, society and the workplace;equality and non-discrimination; and international solidarity.
https://www.ituc-csi.org/

www.fairlabor.org / www.tcgfsocial.com

65

ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAANNEX 3:
Overview of ILO Conventions Ratified by Indonesia and Malaysia
OVERVIEW OF ILO CONVENTIONS RATIFICATIONINDONESIA

MALAYSIA

Forced Labor
C029 - Convention concerning Forced or Compulsory Labour

✓

✓

✓

Denounced

International Covenant on Economic, Social and Cultural Rightsxx

C100 - Equal Remuneration Convention, 1951✓✓

C095 - Protection of Wages Convention, 1949

x✓

C173 - Protection of Workers' Claims (Employer's Insolvency) Convention, 1992x

x

C014 - Weekly Rest (Industry) Convention, 1921x

✓ (Sarawak)

C155 - Occupational Safety and Health Convention, 1981

x

x

C161 - Occupational Health Services Convention, 1985

x

x

C187 - Promotional Framework for Occupational Safety and Health Convention, 2006✓✓

C184 - Safety and Health in Agriculture Convention 2001

x

x

C118 - Equality of Treatment (Social Security) Convention, 1962

x

x

C157 - Maintenance of Social Security Rights Convention, 1982

x

x

C110 - Plantations Convention, 1958

x

x

C087 - Freedom of Association and Protection of the Right to Organise Convention, 1948✓

x

C098 - Right to Organise and Collective Bargaining Convention, 1949✓✓

C141 - Rural Workers' Organisations Convention, 1975x

x

C111 - Discrimination (Employment and Occupation) Convention, 1958✓

x

C122 - Employment Policy Conventionx

x

Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families✓xProtocol against the Smuggling of Migrants by Land, Sea and Air, supplementing the United Nations
Convention against Transnational Organized Crime✓x

Convention 143- Migrant workers (supplementary provision ), Migrations in Abusive Conditions andthe Promotion of Equality of Opportunity and Treatment of Migrant Workersxx

Convention 97 - Migration for employment conventionx✓ Sabah(except

C105 - Abolition of Forced Labour Convention, 1957
Wages and Working Conditions

Migrant Labor

Annex 1-3)

Gender and Family Rights
C183 - Maternity Protection Convention, 2000

x

x

C156 - Workers with Family Responsibilities Convention, 1981xx

Convention on the Elimination of All Forms of Discrimination against Women✓✓

Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children,
supplementing the United Nations Convention against Transnational Organized Crime Preamble,
supplementing the United Nations Convention against Transnational Organized Crime✓x

C138 - Minimum Age Convention, 1973✓✓

C182 - Worst Forms of Child Labour Convention, 1999✓✓

C077 - Medical Examination of Young Persons (Industry) Convention, 1946

xx

Convention on the Rights of the Child✓✓

Optional Protocol to the Convention on the Rights of the Child on the involvement of children
in armed conflicts✓✓

Child and Young Workers Protectionwww.fairlabor.org / www.tcgfsocial.com

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAANNEX 4: Palm Oil Supply Chain and Task and Risk Mapping
The Palm Oil Supply Chain and Task and Risk Mapping section is based on literature review113. Several previously
published reports highlight the various tiers of the palm supply chains in Malaysia and Indonesia, and reviewof those materials provides a comprehensive understanding. Several production stages and activities takeplace before palm oil or palm kernel oil can be used as an ingredient in retail consumer products. The palm oil
supply chain can be split into the following main stages (see Palm Oil Supply Chain graphics on pages 4-5):
1. UPSTREAM PRODUCTION includes:a) growing of seedlings, which usually takes place in a nursery. The young oil palm is then transported tothe main plantation or farm for planting and cultivation. Plantation cultivation include weeding, cleaning,
application of chemicals and plant nutrients, etc. The plants are regularly irrigated and pruned. The adultpalm oil trees yield fresh fruit bunches that are harvested. Harvesting involves cutting of bunches fromthe trees and allowing them to fall to the ground by gravity. The plantations where these activities takeplace can be private estates, smallholder estates (less than 50 hectares of land) or government estates.
Growing is a labor-intensive activity and the majority of the workers in the palm industry are involved in
the growing phase. At the palm estates each worker is expected to take care of the growing activities
of about 10 hectares of planted land. Once the fruits are harvested, they are taken to the mills for oil
extraction.
b) the extraction of the oil takes place at the crushing mills, where fresh fruits are pressed to extract thecrude palm oil (CPO) from the fruit’s mesocarp. Through this process the palm kernels are separated, andthese are crushed to extract crude palm kernel oil (CPKO). This oil extraction process involves, in summary,the reception of fresh fruit bunches from the plantation, sterilizing and threshing of the bunches to free
the palm fruit, mashing the fruit, and pressing out the crude palm oil. The crude oil is further treated topurify and dry it for storage and export114. Crushing mills are usually located in the vicinity of plantations
and the fruits are transported there in small and large trucks or push carts. In some countries or regions(in Africa) the fruits may be conveyed to the processing site in baskets carried by persons on their heads.
2. The MIDSTREAM PROCESSING involves:a) the refining of crude palm oil (CPO) and crude palm kernel oil (CPKO). The refining can be done throughphysical or chemical processing. To produce refined palm oil, crude palm oil and crude palm kernel oil
under go three refining stages, namely degumming115, bleaching116 and deodorization117.
b) After refining, oil is stored, traded and transported. The palm oil needs to be handled, stored andtransported according to the Recommended International Code of Practice for storage and transport of113 Humanity United has provided useful information on the general palm oil supply chain in their 2012 report. The information provided in this section
is largely based on that report, "Exploitative labor practices in the global palm oil industry", Humanity United, 2012.
114 www.fao.org/DOCeEP/005/Y4355E/y4355e04.htm
115 In degumming, the gum and fatty acids in CPO and CPKO are separated alongside other impurities such as trace minerals, copper, and iron by theapplication of phosphoric acid.
116 In bleaching, the oil is mixed with bleaching earth (bentonite calcium) in a vacuum to remove impurities and color pigments in the palm oil.
117 In deodorizing, the odor and taste of the oil are removed when oil is steamed at high temperatures of between 240-260 degrees Celsius and finallycooled at room temperature.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

edible fats and oils in bulk (CAC/RCP 36 – 1987, Rev. 1-1999)118. Refining and trading are strongly related,
and these processes are mostly done by the same company.
3.

DOWNSTREAM COMMERCE involves the business practices of large commercial businesses, including
manufacture of consumer goods and food-service operations. This stage includes the manufacturing andretail of products that contain palm oil and derivatives like stearin, olefin and oleo chemicals.

SMALLHOLDER GROWERS
In Indonesia and Malaysia, a large part of the palm production is undertaken by smallholder farmers.
Governments of both countries support production by the smallholder estate model in order for lowerincome households to have access to work and income. In Malaysia, in particular, there are several government
schemes to promote the widespread production of oil palm.
Smallholder estates can be separated into two groups: (1) dependent smallholders; and (2) independent
smallholders.
Dependent smallholders are plantations owned by individual farmers who have an agreement – througha written contract or oral agreement – with a private corporate estate to solely sell their palm fruit to thiscorporation. The prices for the transactions are mostly pre-determined and do not conform with market
prices.
Independent smallholders are not bound by agreements and can sell their palm fruit on the open market. A
disadvantage of this system is that independent smallholders are impacted by fluctuations in the prices for
fresh fruit bunches. As the bunches need to be sold immediately after harvesting to avoid degradation of thequality of the palm fruit, smallholders are dependent on the willingness of buyers and processors to take thefruit and not in a good position to negotiate a better price119.
In Indonesia a different system was developed in the 1970s, supported and promoted by the government,
called “plasma system”. In a 2016 report it is described that within this plasma system, a company develops alarge plantation with the infrastructure needed for processing, including an oil mill. Part of the land is provided
to smallholders or settlers for them to produce palm oil in plots of about 1-2 hectares. The smallholders
cultivate and grow the palm fruits and supply fruit bunches to the oil mill. The company determines the prices
paid to smallholders and part of the payment is retained to pay back the investment costs for preparing theland. The NGO Sudwind reports that the intention of the system was to enhance economic development inrural areas, and that in some cases this has worked out well. However, it appears that in the majority of cases,
smallholders were not treated fairly and have chosen no longer to collaborate in such systems, as they havelost their confidence in the companies and the government120.

118 www.fao.org/docrep/004/y2774e/y2774e07.htm
119 "Exploitative labor practices in the global palm oil industry", Humanity United, 2012.
120 “Palm oil, environmental destruction, stolen land”, Sudwind, 2016www.fairlabor.org / www.tcgfsocial.com

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Several of the largest palm oil companies in Indonesia and Malaysia have integrated businesses including
several stages/tiers of the industry, such as the growing, refining and trading of palm oil. Some even produce
consumer goods using palm oil.
Large scale palm oil production involves several risks and impacts on the environment, workers and affected
populations. The growing and harvesting of palm fruit on plantations involves low-skilled jobs, while workin milling and refining requires a higher skill level; therefore, these jobs are better paid and are considered
to involve lower risk of exploitation than work on plantations121. In this report we focus on the upstream partof the supply chain; a more detailed overview is provided below about the tasks and risks involved in thegrowing stage (See Table A)122.

121 Target Hotspot Research Palm Oil - Malaysia - Confidential, 2017
122 Based on literature review including (Annex 1).

TABLE A: TASK AND RISK MAPPING — PALM OIL PRODUCTION*PROCESSING
STAGE /
ACTORS / UNITSPHASE OFPRODUCTION

Growing(year-round)

TASKS AND RELATED INFORMATIONSOCIAL AND FORCED LABOR RISKS

1. Growing and harvesting takes place all
year round. The yield fluctuates between
low periods (about 5 months per year) andhigh periods (7 months). Additionally, there
are fluctuations as oil palms are sensitive toweather and agronomic practices.
2. The growing and harvesting of palm fruiton plantations are low-skilled jobs.
3. Most plantations are located in rural andremote areas, far away from labor markets,
which makes it challenging to secure
reliable workers to work on the plantations.

1. Income of workers involved in growing is unstable andfluctuates depending on the yield during the year.
2. In both Indonesia and Malaysia, palm oil growers recruit
unskilled workers from distant markets to work and live on
their estates. Several unethical practices are related to therecruitment and retention of workers. These include deception
about nature of work, high recruitment fees leading to
debt, retention of passports, limited freedom of movement,
intimidation and exploitation.
3. Health and safety issues include lack of personal
protective equipment, access to sanitation and handwashing facilities, drinking water and medical care.
4. Production targets are set for workers involved in growing
and harvesting operations. In order to be able to make aminimum wage the workers need to work long working hours
which in some cases is involuntary, child labor, insufficient rest
time and workers not taking their personal safety seriously.
5. Women are exposed to worse conditions and uncertainty
of work as female plantation maintenance workers are usuallyemployed on a seasonal basis, while male harvesters and mill
workers are employed more permanently.

Seedling
hatcheries /
nurseries

Raisingseedlings

1. Breeding
2. Raising seedling oil palms in nurseries
3. Irrigation

1. Possible risks of child labor when nursery care takers use
their family members to look after the seedlings.

Plantations

Planting

1. Clearing and land preparation
2. Removing old trees and wild plants andweeding
3. Irrigation
4. Planting seedlings

1. Smallholder owners often borrow money with a high rateof interest per year from a commercial grower to pay forseedlings, fertilizers, and other supplies. Start-up costs arehigh and farmers often have difficulty paying back the loan
and high interest as their income is low. Through this system,
smallholders frequently become indebted to the oil palm
company and have difficulty paying back the loan. These loans
are often combined with the requirement for the farmers to sell
their fruit to the company for prices lower than the market priceas long as the debt is fully paid off. This causes a situation
wherein farmers are dependent on the company and in abonded situation.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Cultivating

1. Pruning
2. Application of fertilizers through spraying
3. Managing pests and diseases, mostly
by spraying crops with chemical pesticides(including paraquat)

1. Workers in maintenance are not paid for the day if it rains at
a certain time of the morning (the rain washes away or dilutes
the chemicals).
2. Workers applying paraquat and other pesticides are notprovided with proper personal protective equipment, and thosethat are, often do not use them (sufficiently) because of theheat and because it can slow their work pace, leading to lower
production and not meeting the target.
3. Spraying is mostly done by casual maintenance workers
most of whom are women. Application of chemical fertilizers
and pesticides can be damaging to the workers' health.
4. Maternity protections are limited and pregnant workers tend
to hide their condition as long as possible. During this period,
pesticide sprayers continue to handle highly toxic chemicals
on a daily basis which could have serious implications for theunborn babies.

Harvesting

1. Long sickles are used to cut the fresh
fruit bunches (FFB) from mature oil palm
2. Collection of the fallen FFB from theground
3. Collection of loose fruitlets from theground (breaking free from the FFB when it
hits the ground)
4. Carrying the FFB to the wheelbarrows
5. Loading the FFB into the trucks fortransportation

1. Harvesting takes place year-round and workers need tomeet the high quota to receive a minimum wage. To meet therequirements or to get a performance based compensation,
workers are forced to work involuntary overtime or to bringfamily members to help, including children.
2. Children working on the plantations carry heavy sacks ofloose fruits. Some transport wheelbarrows full of heavy palm
fruit bunches over uneven terrain and narrow bridges. They run
the risk of injuries from repetitive movements, carrying heavyloads and from working in an environment where they are
exposed to chemicals.
3. Employers can penalize workers for failing to meet targets,doing certain tasks or for mistakes in their work such as forpicking unripe fruit.
4. Ergonomic problems related to work and the intense work
pace at plantations. Workers are required to lift heavy loads(the FFB), use long sickles to cut the FFB (with risks of injuries)
and bend to collect the loose fruitlets from the ground. One
report mentioned that targets are set at 1,300 kg of fresh fruitbunches per day.

Transport

1. Transportation to collection points
2. Transport of FFB from the collection
points to the palm oil mills (In general anoil mill can be reached within five hours
from the plantations. Typically FFB aredelivered to the mill by workers responsible
for growing.

1. Risks of forced overtime and carrying heavy loads.

Milling

The palm fruit is loaded onto a conveyor
belt and undergo a series of automatedsteps:
1. The fruits are sterilized by steam in large
and pressurized containers. Sterilization
kills any bacteria.
2. Once sterilized, individual fruits are
removed from bunches in large threshingdrums. Empty fruit bunches are removed asa by-product of this process.
3. Individual fruits are moved to press
digesters, whereby steam and physicalstirring is used to break down the fleshy
mesocarp and to loosen this mass from thepalm nut.
4. This creates a mash that is physicallyextracted using a screw press. Pressing
separates the fruit oil from the fruit solids,
which are called the press cake and are
redistributed to specialist facilities forcrushing.

1. To work in the mills higher level of skills are required ascompared to the work on plantations, therefore these jobs are
better paid and considered to have less risk of exploitation than
the work on plantations.
2. As the fresh fruit needs to be processed quickly after
harvesting (within 48 hours), the growers need to work
collaboratively and closely with mills. This short period forprocessing creates situations wherein mill workers are required
to work overtime. The mills operate 24 hours a day and with ashortage in the labor force, there is pressure to work overtime.
3. Health and safety risks or other risks could exist.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Crushing

1. Crushing is an automated process
performed at separate and specialized
facilities. The press cake recovered fromthe milling process is administered witha special tool, where the palm nut isrecovered and separated from the fibrous
cake, which is used as fuel for the crushingprocess.
2. Once separated, the palm nut is cracked
and the palm kernel is recovered andseparated from its shell by a winnowing
system. The remaining shell is discarded.

1. Risk of forced overtime, similar to the milling stage.
2. Health and safety risks or other risks could exist.

*Based on the literature review, including:"Exploitative labor practices in the global palm oil industry", Humanity United, 2012
"The law of the jungle: Corporate responsibility of the Finnish palm oil purchases", Finnwatch, 2014
"The great palm oil scandal: Labor abuses behind big brand names", Amnesty International, 2016
"Palming off Responsibility, Labor rights violations in the Indonesian palm oil sector", CNV & SOMO, 2017
"Assessment of palm oil industry in Indonesia and Malaysia", UNICEF, 2017 (unpublished)"The Human Cost of Conflict Palm Oil, worker exploitation in Indonesia", Rainforest Action Network, 2016www.fairlabor.org / www.tcgfsocial.com

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAANNEX 5: Resource Documents
1.

ILO Indicators of Forced Labor http://www.ilo.org/wcmsp5/groups/public/---ed_norm/--declaration/documents/publication/wcms_203832.pdf

2.

ILO Hard to see, harder to count—Survey Guidelines to Estimate Forced Labour of Adults
and Children http://ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/documents/
publication/wcms_182096.pdf

3.

ILO Standards on Forced Labor—A New Protocol and Recommendations at a Glance
http://www.ilo.org/wcmsp5/groups/public/@ed_norm/@declaration/documents/
publication/wcms_508317.pdf

4.

ILO Strengthening Employers’ Activities against Forced Labor http://www.ilo.org/wcmsp5/
groups/public/---ed_norm/---declaration/documents/publication/wcms_097734.pdf

5.

ILO Combating Forced Labor—A Handbook for Employers and Business
http://www.ilo.org/global/topics/forced-labour/publications/WCMS_101171/lang--en/index.
htm

6.

ETI Human Rights Due Diligence Framework. Can be requested fromhttps://www.ethicaltrade.org/resources/human-rights-due-diligence-framework

7.

OECD FAO Guidance on Responsible Agricultural Supply Chains
http://mneguidelines.oecd.org/oecd-fao-guidance.pdf

8.

United States Department of Labor (USDA) Guidelines
https://www.gpo.gov/fdsys/pkg/FR-2011-04-12/html/2011-8587.htm

9.

United States Department of Labor Sweat and Toil Application
https://www.dol.gov/dol/apps/ilab.htm

10.

International Trade Union Confederation Guide http://www.ilo.org/wcmsp5/groups/
public/---ed_norm/---declaration/documents/publication/wcms_142664.pdf

11.

United States Department of Labor Comply Chain Tool
https://www.dol.gov/dol/apps/ilab-comply-chain.htm

12.

Fair Labor Association Guidance on Supply Chain Mapping http://www.fairlabor.org/blog/
entry/guidance-supply-chain-mapping-transparency-and-traceability

13.

Fair Labor Association Paper on Emerging Supply Chain Mapping and Traceability Regulations
http://www.fairlabor.org/sites/default/files/images/
supply_chain_traceability_and_transparency_june_2017.pdf

14.

Interfaith Center on Corporate Responsibility (ICCR) Best Practice Guidance on
Ethical Recruitment of Migrant Workers http://www.iccr.org/sites/default/files/
iccrsbestpracticeguidanceethicalrecruitment05.09.17_final.pdf

15.

Modern Slavery Registry (company statements): http://www.modernslaveryregistry.org/

16.

Alliance 8.7 (initiative to combat modern slavery): http://www.alliance87.org/

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIAANNEX 6: Research Methodology and Limitations
The Fair Labor Association’s research approach hinges on stakeholders for both issue identification anddevelopment of recommendations in a way that fosters partnership to bring about positive impact throughout
the supply chain123. Therefore, engaging with stakeholders to elicit their feedback and suggestions has beenat the core of this research.
FLA undertook the following steps from September 2017 to September 2018 to collect and analyze primaryand secondary data.

STEP I:
Literature Review: The FLA team conducted a review of 17 studies and articles related to the palm oil sector(Annex 1) during September and October 2017. Eleven of these reports focused on working conditions, twoon environmental issues; and two on ways to improve sustainability and business and human rights. Of the
17 reports, 13 included specific information on Indonesia and 11 on Malaysia. As data collection progressed,
additional news articles and reports were identified. In total, 70 literature sources were reviewed and analyzed.
Regulatory Environment Review: International standards, normative frameworks and national legislative
frameworks on forced labor for Indonesia and Malaysia were reviewed. The desk-based review identified
international labor conventions and frameworks on forced labor that have been ratified by the two countries.
An assessment of the application of the legal frameworks, based on written reports and input from experts,
was conducted. It revealed gaps in labor policy and on-the-ground implementation of those standards.
Task and Risk Mapping: The FLA developed a task and risk map of the steps involved in the production ofpalm oil, including an analysis of the labor abuse risks associated with different activities in the production
process. Specific attention was paid to working conditions that would point toward risks of forced labor.

STEP II:
Tools Development and Stakeholder Surveys: The FLA team, in consultation with the CGF Palm Oil Social
Taskforce, designed during November and December 2017 three surveys on forced labor in the palm oil supply
chain. For the purposes of this project, companies or buying companies are defined as interviewed CGF
members who are composed of retailers and manufacturers. Palm oil companies are defined as enterprises,
corporations, who are involved in the processing, and/or production of palm oil and may also own oil palm
plantations and processing units. This also includes refiners, mills and small holder farmers. They do notinclude any intermediaries who are only involved in the trading of palm oil.

123 FLA has worked in the agriculture sector since 2004 in over 15 countries in a variety of commodities. We have studied labor abuses and developedand implemented a tiered approach to assessing and addressing the root causes of labor abuses.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

The stakeholder survey was administered to 23 civil society organizations, government officials, industry
associations, service providers, certification agencies, etc. based in Europe, the United States, Indonesia,
and Malaysia. A company survey was administered to staff at six companies headquartered in Europe or theUnited States that maintain local offices in Indonesia or Malaysia and who buy, consume, and/or retail palm
oil-based products. A third survey was administered to five palm oil companies involved in trade, processing
and production of palm oil. The palm oil companies operate globally and have local operations in Indonesia
and Malaysia.

STEP III:
Stakeholder Mapping and Interviews (January-February 2018): Based on the literature review, complemented
with outreach to organizations active in the palm oil sector, an initial list of 70 stakeholders active in thepalm oil sector was developed (Annex 2). Included in the list of stakeholders were local and international
civil society organizations, UN Agencies, government bodies, and industry associations. FLA reached out
to 50 of those 70 organizations and invited them to participate in the research. These 50 stakeholders wereconsidered important as they could provide information on forced labor and human rights. Information wascollected on their programs on unethical recruitment of local and migrant workers and practices contributing
to forced labor conditions. Emphasis was placed on gathering possible solutions to these issues. About halfof the approached organizations (23) agreed to participate in the research, of which 15 provided written
feedback and eight opted for online interviews124. An additional 28 relevant organizations and individuals
were identified (totaling 98 stakeholders). The scope of the research did not allow for collecting information
on and reaching out to those additional stakeholders.
Supply Chain Mapping: The FLA collected information on the supply chain during February and March 2018
through desk-based research and via a survey request to six companies sourcing palm oil. Six companies
submitted information in the form of written input followed by one-on-one interviews. These companies arelarge palm oil users and produce consumer goods such as food, personal care items etc.
Five palm oil companies responded to a short survey during August and September 2018. The palm oilcompanies are leaders in the sector, engaged mostly in the processing and export of palm oil from Indonesia
and Malaysia (and other countries). They operate as multinationals and have extensive supply chains withowned plantations and/or processing units, in addition to procurement from several smaller suppliers or
mills. Contact with industry members and palm oil companies was arranged with the support of CGF and its
members.

STEP IV:
Data Analysis, Recommendations and Reporting: The FLA collated and analyzed both primary and secondary
data gathered to identify knowledge gaps in the labor supply chain where ethical challenges might occur.
124 Stakeholders who provided input to the survey are: Aid Environment, CNV, ELSAM, Finnwatch, Forest Peoples Programme, Hendarwati, Humanity
United, IDH, International Labor Rights Forum, MPOB, MPOCC, National Union of Plantation Workers, Oxfam UK/Oxfam Novib, Proforest, Rainforest
Action Network, RHFS, RSPO, SOMO, Tenaganita, Tropenbos International, UNDP/ POI, UNICEF, Verité, Wild Asia. See Annex 2 for more information
about these and other stakeholders.

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ASSESSING FORCED LABOR RISKS IN THE PALM OIL SECTOR IN INDONESIA AND MALAYSIA

Recommendations were developed on building capacity, proposed collaborations, advocacy, and on-theground projects that CGF can develop. Recommendations outline roles for key stakeholders identified. Data
from the surveys was analyzed using quantitative and qualitative tools.

LIMITATIONS OF THE STUDY
The study has four main limitations. First, the study is desk-based research and did not involve an on-theground assessment of working conditions. The research does not include primary data from workers or victims
of forced labor; secondary data on working conditions and workers’ views was extracted from literature andstakeholder interviews.
Second, the aggregate results from the companies and palm oil companies are based on self-reported data.
Data validation by cross-referencing with field level data was not within the scope of the study. To secure
responses, the palm oil company survey was abbreviated.
Third, the research did not include feedback from smallholder non-certified growers. Many small palm oilcompanies and actors across the supply chain have critical perspectives, and further engagement with themis recommended.
Finally, there are information gaps in the current literature. Among the gaps:(1) Lack of overview of labor recruitment processes from the home locations of migrant workers to palm
estates.
(2) Lack of analysis of the internal human and labor rights management systems that the company, palm oilcompanies, and plantations have. While some overview of companies’ programs is publicly available intheir respective annual reports, no independent third party review of their program is available.
(3) No insight into the methodology adopted by the plantations to determine production targets for workers.
(4) Lack of information on how buying companies and palm oil companies adjust and revise their internal
responsible sourcing and responsible production practices.

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ACKNOWLEDGMENTS:
The research team would like to extend its sincere thanks and appreciation to the survey respondents andthose who participated in online interviews. A special thank you to The Consumer Goods Forum staff – Nadia
Bunce, Social Sustainability Manager, and Clare Iery, Associate General Counsel- Associate Director, Ethics& Compliance Office from Procter & Gamble for their guidance and support, particularly in assisting withresearch planning and the identification of potential respondents. Also, we would like to acknowledge Human
Rights Without Borders and Tenaganita for their review of the regulatory frameworks and field level analysis.
Finally, we express our gratitude to each of the organizations who have previously researched and publishedreports on the palm oil sector. This review draws from the data presented in those reports.

RESEARCH TEAM:
Research and report: Richa Mittal and Leonie Blokhuis, FLA
Data analysis support: Michiko Shima and Wanjing Ju, FLA
Editing support: Jorge Perez-Lopez, FLA

ABOUT THE FAIR LABOR ASSOCIATIONThe Fair Labor Association is dedicated to improving the lives of workers around the world. Since 1999, FLA
has convened socially-responsible companies, colleges and universities, and civil society organizations, tocreate solutions to abusive labor practices by offering tools and resources to companies, delivering training toworkers and management, conducting due diligence through independent assessments, and advocating for
greater accountability and transparency from companies, factories, farms, and others involved in global supply
chains. To learn more, visit www.fairlabor.org.

ABOUT THE CONSUMER GOODS FORUM
The Consumer Goods Forum (“CGF”) is a global, parity-based industry network that is driven by its members
to encourage the global adoption of practices and standards that serves the consumer goods industry
worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service
providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography,
size, product category and format. Its member companies have combined sales of EUR 3.5 trillion and directly
employ nearly 10 million people, with a further 90 million related jobs estimated along the value chain. It isgoverned by its Board of Directors, which comprises more than 50 manufacturer and retailer CEOs. For more
information, please visit: www.theconsumergoodsforum.com.