This report will discuss and analyse the intersection of multinational corporations and labour rights of plantation workers in the palm oil sector in Indonesia through theoretical radical lenses, with a strong argument that trade liberalization and globalization contribute to the abuse of labour rights in Indonesia due to increasing global competitiveness and pressures in our capitalist world (Kinley, 2015). The discussions and debates in this report will also expand on themes such as western imperialism, the systemic flaws of capitalism, the gendered and racialized labour system in Indonesia, indigenous rights, unfair labour laws and the faults of the Indonesian government to protect plantation workers. The radical lenses that will be used to critically analyze and challenge the dynamics and outcomes of multinational corporations in the palm oil sector are systems thinking and traditional ecological knowledges.
Palm oil is a major commodity that is widely used around the world and is the “world’s most produced, consumed and traded vegetable oil”, according to the WWF. The sector is rapidly expanding on a global scale, with production rising from 13.5 million tonnes in 1990, to 155.8 million tonnes in 2014 (ICCT, 2016). The commodity is cheap and is used by large multinational corporations such as Nestle, Unilever, Procter & Gamble, Wilmar and more (Amnesty, 2016) for the production of foods, cosmetics, cleaning products and can be found in up to 50% of products in supermarkets in the United Kingdom (Stedman, 2021). Multinational corporations (MNCs) such as Colgate, Nestle and Unilever claim that their products use “sustainable palm oil”, despite labour rights abuses such as forced labour occurring in the supply chain (Amnesty, 2016). The systematic issues of capitalism and racialized labour systems is further emphasized due to this. For example, nine MNCs have a combined revenue of $325 billion in 2015 and are still unable to prevent the extremely poor treatment plantation workers are enduring, according to Senior Investigator, Meghna Abraham, at Amnesty International (Amnesty, 2016).
Indonesia is the largest producer of palm oil, supplying half of the palm oil in the world (FAOSTAT, 2015), and due to this, the production has not only contributed to environmental and social concerns such as, extensive deforestation in the country, harm to its wildlife species, devastating impacts to indigenous and local people such as taking away indigenous forest lands (Greenpeace Southeast Asia, 2021), but also labour rights abuses and unfair labour laws, which is often overlooked (Colchester et al., 2006). The sector is not only a significant source of export earnings for the country, but also provides indirect or direct employment for over 16 million workers in the palm oil supply chain, 3.5 million of which are plantation workers (RSPO, 2020 & ILO, 2021).
According to the International Labour Organization (ILO), fundamental labour rights include the freedom from forced labour, freedom from child labour, freedom from discrimination at work and the freedom to form and join a union, and to bargain collectively. However, past NGO reports have documented labour abuse endured by plantation workers. Among these NGO reports, the Transnational Palm Oil Labour Solidarity (TPOLS) have documented concerns such as, “exposure to hazardous chemicals, a reliance on temporary workers, below minimum-wage payments, lack of maternity and menstrual leave for female workers, and the suppression of independent unions” (Jong, 2020). In addition, there are documented cases of child labour, insecure employment without pensions or health insurance, health and safety hazards and working long hours (Amnesty, 2016).
This report will be discussing the systematic issues such as gendered and racial capitalism which consequently affects labour rights in Indonesia’s palm oil supply chains. Racial capitalism is a deep-rooted issue and common practice that has been prevalent for decades; “the process of deriving social and economic value from the racial identity of another person” (Leong, 2013). Western or predominantly white corporations such as, Nestle and Kellogs, often use labour from the global south for economic value (Leong, 2013). This report extremely discourages the commodification of non-white people by Western institutions as it “displaces measures that would lead to meaningful social reform”, according to Leong.
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