Whats Wrong With Indonesian Palm Oil Industry?

Posted on Apr 06, 2010

Palm Oil Watch Head Jefri Gideon Saragih states that certain parties have manipulated the high global demand for palm oil for food, cosmetics and the latest natural fuel from Europe, China and Asia by exploiting nature and the overly cheap labor in Indonesia.

Whats Wrong With Indonesian Palm Oil Industry

Palm Oil Plantation in North Sumatera

The Indonesian palm oil development is very good but there are some parties who are trying to take an unfair advantage, “said Jefri in a discussion which was also attended by WALHI, Palm Oil Watch, Greenpeace, and Forest Watch Indonesia.

Jefri explained that Indonesia has around nine million hectares of palm oil with 36% of them owned by the villagers, 43% by private companies and 21% by State Owned Enterprises (BUMN).

Those lands face a number of problems such as plantation revitalization program, capital investment legislation and one roof permit and license issuance.

Jefri highlights in particular the current model whereby the villagers are better off surrendering their land management to companies and receive a company define profit sharing scheme instead.

“If they refuse, it is very difficult for them to find the seeds for their small palm oil plantation” he added.

Meanwhile, other NGOs highlighted the worrying fate of the most palm oil plantation workers who are paid below provincial minimum wages set by the Government. They are also working under very low levels of safety.

“Palm oil workers are paid around Rp 700,000 (USD 70) per month, whereas the minimum wages set at Rp 965,000 (USD 96). They are also often exposed to toxic chemicals spraying herbicides on the field. This is very hard to track since most of them are temporary workers hired for harvesting only” said Bagindo, Pelita Sejahtera, North Sumatra NGO that focus on the fate of palm oil workers.

The environmental activists urged the Government to overcome both problems, by auditing the Indonesian palm oil companies, ban forest clearing for plantation expansion, revoked the European palm oil purchase agreement and improve the life of palm oil workers.

They also urged the government to review the plantation sector in general and the granting of palm oil plantations in particular.

“Companies wanting to open palm oil plantation must get permission from local government which then brought up to the central government. Final test should be done publicly, so the people can see whether the company’s operations are competent or not,” concluded Jefri. (*)