A farmworker in Berau, Indonesia, loading oil palm bunches/Photograph by Kumal Jufri

Verité’s work is featured in a recent in-depth exposé of labor abuses in the palm oil industry in Bloomberg Businessweek. Journalist E. Benjamin Skinner, a senior fellow at the Schuster Institute for Investigative Journalism of Brandeis University, brings to light the widespread abuses of basic human rights that take place on some plantations in Southeast Asia. Daryll Delgado, Manager of Research and Stakeholder Engagement at Verité Southeast Asia (VSEA), answers questions about our experience in the palm oil supply chain, and recommendations for companies on how best to detect risks of forced labor and human trafficking.

Verité Vision: What is Verité’s experience in uncovering human trafficking and forced labor in the palm oil industry?

Daryll Delgado: In 2007, Verité, through VSEA, conducted a study on trafficking of Filipino men (“Hidden Costs in the Global Economy: Human Trafficking of Philippine Males in Maritime, Construction and Agriculture”). In the course of that research, we encountered several cases of men initially recruited for other industries or sectors, but eventually trafficked into palm plantations. We also found that undocumented persons and foreign workers who fall out of status were often brought into plantations to avoid the authorities. The plantations are vast, and located in remote areas that are not as frequently monitored or regulated as the work sites of other sectors which are more visible and accessible to the authorities. Since then, we continued to monitor and to receive reports of labor exploitation in oil palm plantations.

In 2010-11, while conducting a Humanity United-funded study focused on Nepalese workers, we received several leads and anecdotal findings which indicate that there are many undocumented Nepalese workers in the palm oil plantations in the Malay Peninsula, and that foreign workers who fall out of status are likely to be lured to the palm and rubber plantations where there is always work available.


Last year, during a rapid appraisal in Sabah and West Kalimantan, we were able to visit plantations and observe the working and living conditions of workers onsite. We were also able talk to plantation workers themselves, as well as to labor brokers, plantation management representatives, and NGOs assisting workers. Some of the findings of that research are cited in our white paper, Sustainable Palm Oil?: Promoting New Measures to Combat Risks of Forced Labor and Human Trafficking in Palm Oil Supply Chains.

Other findings we reported

Factors contributing to vulnerability:

  • As first time migrants, workers are low-skilled with basic level of education
  • As “old-timers,” they and their families have taken root in Sabah, and have nothing to return to in Indonesia, they tend to take bigger risks, and ready to accept less than fair and favorable conditions.
  • Workers usually come from poor, remote areas in Indonesia and Philippines and are eager to work and earn.
  • Workers are used to hard work in agricultural sector and tend to accept poor working conditions as normative, part of the nature of the work.
  • Borders are porous – whether intentionally or unintentionally, several entry points are kept unmonitored, unregulated, making it easy for workers to enter without proper documentation, or for agents to illegally transport workers into Sabah.
  • Workers are usually undocumented when they enter Malaysia and have no leverage or bargaining power.
  • Workers provide a ready pool of cheap, flexible labor.

Range of exploitation reported by workers, and observed onsite:

  • Passports and other legal documentation are either not provided, or are withheld, restricting workers’ freedom of movement.
  • Work is hard, hours are long, and pay is low (600 RM or 200 USD/month).
  • Children and young workers are employed on plantations; protective restrictions are not implemented.
  • Women are not treated equally as men; in most cases, they are not considered as employees, do not receive payment directly, even if they spend long hours of work in the farms alongside their husbands.
  • In most cases, the harvesting practices remain physically-challenging, employers do not want to invest in mechanizing tools.
  • Living conditions can be harsh and even primitive, with very limited contact with the world outside the plantation.
  • Basic amenities like water and food are not readily available.
  • In some plantations, there is a monopoly on supplies and workers have no choice but to pay exorbitantly priced basic goods.

Modes of coercion and Menace of Penalty:

  • Passports are withheld by employers, and workers are always under the menace of being denounced to the authorities, of being apprehended, detained, and deported as illegal aliens.
  • Employment agreements are not in writing.
  • Rather than outright deception, there is a lot of obscurity and lack of information from the part of employers and brokers, about working and living conditions in the palm plantations in Malaysia.
  • Employers take advantage of workers’ immigration status, or do not see the benefit of improving their status, and deliberately keep them “undocumented.”
  • There is not enough incentive for employers to hire workers through proper channels, when there is an available pool of willing foreign workers.
  • Plantations are vast, remote, not easily accessible; workers’ movement is naturally limited by the location and size of plantations.
  • There is poor regulation and monitoring of working conditions on plantations, especially on smallholdings.
  • Workers are not organized, not represented, and in other cases, even in formally structured private estates, they are not given access to existing grievance mechanisms.
  • Deductions are levied against their salaries, or payments are withheld, so the workers are forced to stick around for the next payment cycles in order to get their complete pay.
  • In some plantations, workers are provided checks and vouchers instead of cash as wage payments, keeping them bound to the plantation, and effectively restricting their movement.

The research conducted in Sabah shows that, generally speaking, migrant workers in the palm oil industry are easy subjects for exploitation. In most cases, there was minimal involvement of brokers and agents in the workers’ employment cycle. All workers came to Sabah voluntarily, and almost all of them secured their current jobs on their own. But even with minimal participation from brokers, workers can and still do end up in very vulnerable situations because of a confluence of many other factors—their very status, the country’s laws on immigration and policies regarding foreign workers, the nature of the work and life in plantations, as well as more coercive practices that are so widespread and widely accepted throughout the industry: passport confiscation and deliberate non-legalization of foreign workers and their families.


What is Verité’s involvement with the Roundtable on Sustainable Palm Oil (RSPO)?


Verité, through VSEA, is now a member of the RSPO. I was recently nominated to be a member of the Dispute Settlement Facility Advisory Board. We are also part of the Human Rights Working Group. Prior to this, Verité was actively involved in the year-long review of the RSPO Principles & Criteria as a stand-in for the NGO BothEnds’ membership in the P&C Review Task Force. Along with the other “social” NGOs (Oxfam, Sawit Watch, Solidaridad, and Forest Peoples’ Program), and with the support of other stakeholder represented in the Task Force, we managed to push for the inclusion of a forced labor criteria and indicators, as well as human rights and business ethics criteria in the new P&C, which was approved by the RSPO General Assembly in April this year.


Do you predict changes in the palm industry, especially given this latest press coverage?


I can only hope that, with more and more public attention and scrutiny on the labor aspect of the industry, and the recent surfacing of issues (which we have already reported on as early as 2008), the companies and key stakeholders will finally look more closely into the palm oil companies’ management systems, the ways they recruit, select, and manage their labor force, and be transparent and work towards addressing the root causes of these issues for a more long-term, sustained compliance. There is also a great need to inquire into the gaps in policies and state laws and processes that make companies vulnerable to risks of violating labor standards, and workers vulnerable to abuse.


What are the risks to companies, and how can they respond?


The abuse faced by trafficked migrant workers – e.g., child and forced labor, induced indebtedness or coercive practices in the workplace – present a myriad of risks to global business, including:

  • Legal Risk
  • Damage to Brand Value & Company Reputation
  • Trade-Related Risk
  • Threats to Investment and Finance

To meet these challenges, Verité recommends a comprehensive and “deep-dive” approach to detect risks:

  1. Start with focused risk assessment
  2. Develop a detailed code of conduct and measurable standards
  3. Communicate policy commitments and codes of conduct and train staff, 
suppliers, and subcontractors
  4. Monitor, audit and remediate
  5. Perform periodic independent reviews

Verité’s targeted Program on Ethical Labor Practices in Palm Oil Production helps companies and other stakeholders respond to key labor issues such as the risks associated with forced labor and human trafficking.

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