Palm Oil and Child Workers

The Jakarta Post has highlighted activities being undertaken by smallholder farmers in Jambi to further the education of local school children.

Smallholder farmers in the West Tanjung Jabung region are operating under a group certification model. Using additional certification credit income, they have raised around USD66,000, some of which has been allocated to school scholarships for around 100 students.

The significance of this type of activity shouldn’t be underestimated.

The communities are addressing a significant problem faced by plantation workers in Indonesia: taking care of community families. As a RSPO smallholder manager has stated: “There is a fine line between ‘child worker’ and ‘child assisting parents’, which may lead to child labour situations.”

RSPO has been working with smallholder farmers in Jambi, to prevent and tackle child labour in the palm oil industry, as part of their RSPO Principles and Criteria P&C for the Production of Sustainable Palm Oil, which now includes more stringent criteria for the rights and protection of children.

Late last year RSPO also introduced further guidance for operations and the rights of children in the plantation context, including guidance for smallholders.

Generally in Indonesia school hours end in the middle of the day; for parents of young children this significantly curtails available working hours for themselves. Few are able to pay for additional child-minding, for example, as it would significantly eat into already small incomes. To be with their parents, at that time of day, is to be on the farm.

Farmers and plantations companies are attempting to address the problem, whether through smallholder initiatives in Jambi, or via NGO programs. One example is the work undertaken by Humana in Sabah, providing education for Indonesian migrant workers outside of the formal schooling system.

This is, unfortunately, an aspect of labour on plantations that few Western campaign groups have failed to grasp or understand, and oversimplified a complex issue, labelling anything that doesn’t conform to Western norms as child labour.

It further underlines an incredible misunderstanding of the problems faced by smallholder farmers on a daily basis. There are no easy solutions. This is compounded by the fact that in some parts of the palm oil sector – as in many other sectors of global supply chains, such as the garment sector or fishing – there are real problems with child labour and other labour-related issues. The U.S. State Department has highlighted these issues in detail, in its Trafficking in Persons (TIP) Report. These real challenges should not be minimised, or conflated with difficult scheduling questions faced by parents who are also smallholders.

If Western campaign groups are seeking to genuinely solve problems in Indonesia on plantations, they should consider contributing to rural educational outcomes. It would produce significantly better sustainable development outcomes.

CPOPC: RED II is ‘Neocolonialist’

CPOPC, the Council of Palm Oil Producing Countries, has published a scathing attack on the EU’s Renewable Energy Directive (RED), and specifically the use of indirect land use change (ILUC) risk models that have led to discrimination against palm oil. 

The piece states, “The application of ILUC to single out palm oil in the Delegated Act of RED ll is therefore seen as a thinly disguised form of neocolonialist protectionism and punitive discrimination.”

The critique comes as the two WTO disputes that have been prompted by the measure – involving Indonesia and Malaysia – start to move into their critical stages. The WTO Secretariat has stated that they are likely to issue the final report on the Indonesian case in the middle of 2022, and the Malaysian case’s panel has been formed in their case.

The statements by CPOPC aren’t significantly different from Brazil’s President Bolsanaro, who accused Europeans of having a ‘colonialist mindset’ when it comes to environmental management.

The statement also came on the day of the ASEAN-EU High-Level Dialogue on Environment and Climate Change, which took place via videoconference on September 6.

Thus far that meeting hasn’t garnered any attention.

It’s worth remembering that CPOPC was originally launched under the auspices of ASEAN. It was also under the auspices of ASEAN that a Joint Working Group on Vegetable Oils was launched and became a key part of the EU’s push to upgrade its relationship with ASEAN.

It’s therefore not entirely surprising that movement on a related issue – environment and climate change – isn’t producing significant fanfare.

Norad and Palm Oil: What’s the Real Risk?

Orbitas – a project of Climate Advisers and funded by the Norwegian Government – has put together an analysis of the palm oil sector in Indonesia, and its response to climate change policies.

The two key contentions of the report are as follows.

First, an aggressive greenhouse gas emissions reduction strategy will result in higher palm oil prices and improved yield.

The rationale for this is that GHG emissions reductions strategies will rely upon limiting new plantings, i.e. the conversion of forest land to oil palm plantations. This is already to some extent taking place in Indonesia.

However, increased global demand for vegetable oils means that this policy constraint will drive up yields to meet demand, as well as prices.

Second, the report argues that unplanted land that is part of landbanks held by some companies will be considered a stranded asset that ultimately won’t be converted to plantation or agricultural land.

Although the scenarios are coherent, the assumptions they are predicated upon do require some significant leaps.

The three most significant are: smallholders will face the same restrictions as large plantations on new plantings; that there will be a regional carbon price imposed on the agriculture sector; and existing plantings on peatland will be forced to relocate.

Although this is an ideal-world wish-list for those seeking significant GHG emissions from Indonesia, the world simply isn’t that theoretical.

Having Indonesian smallholders follow the same restrictions as plantations would require not only limits on smallholder oil palm, but smallholder crops of any kind, including market and subsistence crops. It’s worth remembering also that smallholders have made significant objections to compliance costs associated with voluntary certification schemes.

In addition, a significant increase in palm oil prices may suit incumbents, but it’s also worth considering the significance of those prices in the domestic market as both a food staple and an input into food processing and other industries.

Finally, the question of compensation for relocations would need to be considered; the report simply ‘wishes’ compensation away and states that no compensation would be paid. The idea of simply taking land away from farmers – of any size – would face a difficult political and legal passage.

But arguably the biggest flaw in the report is that it purports to argue to the financial sector that the inability of plantation companies to plant on primary forest and peatland – both part of the now-permanent moratorium – presents some sort of undisclosed risk to investors.

Even unsophisticated investors in agriculture would be acutely aware of the types of regulatory risks associated with land use, and for GHG emissions going forward.

This prompts the question: who is this report for?

A report funded by aid agencies for the financial markets seems absurd at best. Instead, the report simply comes across as another opportunity for Norwegian aid money to denigrate Indonesia’s palm oil sector.