Amnesty Accuses Wilmar Palm Oil of Child and Forced Labor Practices

01 Dec 2016 --- Amnesty International claims some of the biggest brands in the food industry, including Nestle and Unilever, are linked to palm oil that has been sourced using child and forced labor practices.

In a report published yesterday (Nov 30) called ‘The great palm oil scandal’, Amnesty International accuses companies of selling food, cosmetics and other everyday staples containing palm oil “tainted by shocking human rights abuses in Indonesia, with children as young as eight working in hazardous conditions.”

The report investigates palm oil plantations in Indonesia run by the world’s biggest palm oil grower, Singapore-based agri-business Wilmar, tracing palm oil to nine global firms: AFAMSA, ADM, Colgate-Palmolive, Elevance, Kellogg’s, Nestlé, Procter & Gamble, Reckitt Benckiser and Unilever.

It cites “systematic abuses” in the supply chain of major firms. Amnesty International spoke to 120 workers who work on palm plantations owned by two Wilmar subsidiaries and three Wilmar suppliers in Kalimantan and Sumatra in Indonesia. The investigation exposed a wide range of abuses including:

Women forced to work long hours under the threat of having their pay cut, paid below minimum wage - earning as little as US$2.50 a day in extreme cases - and kept in insecure employment without pensions or health insurance,

Children as young as eight doing hazardous, hard physical work, sometimes dropping out of school to help their parents on the plantation,

Workers suffering severe injuries from paraquat, an acutely toxic chemical still used in the plantations despite being banned in the EU and by Wilmar itself.

Workers being made to work outdoors without adequate safety equipment despite the risks of respiratory damage from hazardous levels of pollution caused by forest fires during August to October 2015,

Workers having to work long hours to meet ridiculously high targets, some of which involve highly physically demanding tasks such as operating heavy manual equipment to cut fruit from trees 20 meters tall. Attempting to meet targets can leave workers in significant physical pain, and they also face a range of penalties for things like not picking up palm fruits on the ground and picking unripe fruit.

"Companies are turning a blind eye to exploitation of workers in their supply chain. Despite promising customers that there will be no exploitation in their palm oil supply chains, big brands continue to profit from appalling abuses. These findings will shock any consumer who thinks they are making ethical choices in the supermarket when they buy products that claim to use sustainable palm oil,” says Meghna Abraham, senior investigator at Amnesty International.

“Corporate giants like Colgate, Nestlé and Unilever assure consumers that their products use ‘sustainable palm oil’, but our findings reveal that the palm oil is anything but. There is nothing sustainable about palm oil that is produced using child labor and forced labor. The abuses discovered within Wilmar’s palm oil operations are not isolated incidents but are systemic and a predictable result of the way Wilmar does business.”

“Something is wrong when nine companies turning over a combined revenue of US$325 billion in 2015 are unable to do something about the atrocious treatment of palm oil workers earning a pittance.”

Nestle was quick to respond when FoodIngredientsFirst asked for its position by claiming that “practices such as those identified in Amnesty International’s report have no place in our supply chain” and it has launched an investigation into the allegations.

“Nestlé engaged extensively with Amnesty during the drafting of the report, including supplying detailed information on our relationship with palm oil supplier Wilmar and on our actions to address human rights and labor rights issues in the sector. We will investigate allegations related to our purchasing of palm oil, along with our suppliers.

“Wilmar supplies around 10 percent of the total palm oil that we use in our products. We are working closely with the company to improve traceability. Now, 83 percent of the volume that we purchase is traceable back to the mill of origin and 11 percent is traceable to plantation. This traceability does not yet extend to the plantations at the center of the allegations in Amnesty International’s report.”

Nestle adds that for six years it has worked with partners, including The Forest Trust, to improve transparency, traceability and supplier behavior in the palm oil industry and has processes in place to assess where the risk of labor or human rights violations exist in it supply chain, claiming that it’s taking action to address these.

“Where our suppliers fail to meet the provisions in our Supplier Code, including on labor rights, we will suspend them. Given the complexity of the palm oil industry and the estimated four million people that it employs in South East Asia, progress in addressing labor and human rights issues relies on cross-industry efforts. We will continue to play an active role, alongside others. We have requested information from Amnesty International on where specific labor abuses may be taking place, and we will rigorously investigate any possible connection to the palm oil we purchase.

A Unilever statement sent to FoodIngredientsFirst also says: “We welcome this report by Amnesty International, which has highlighted important human and labor rights issues in the palm oil industry. Although significant progress has been made to tackle the environmental issues associated with palm oil cultivation, much more needs to be done to tackle the deeply concerning social issues prevalent. We have started this journey and are committed to working with partners to accelerate positive change.”

Just ahead of Amnesty International going public with its report yesterday, Wilmar put out a lengthy statement of its own, claiming that it “recognizes and respects the rights of all workers, including contract, temporary and migrant workers.” and stressing the its “sustainability tenet” runs through its official policy against issues within the supply chain like deforestation and exploitation.

“We welcome this report, as it helps highlight labor issues within the wider palm oil industry and in Indonesia specifically. Wilmar has put a lot of effort and systems in place to deal with labor and social issues in our operations and supply chain. We acknowledge that there are ongoing labor issues in the palm oil industry, and these issues could affect any palm company operating in Indonesia. The focus on Wilmar, as the largest processor and merchandiser of palm and lauric oils worldwide, is often used to draw attention to problems in the wider palm oil industry,” it says.

“In Wilmar’s responses to Amnesty International, we have outlined internal investigations that have been taking place since August 2016, which related to the allegations that Amnesty International raised with regard to two of our operations - PT Daya Labuhan Indah and PT Perkebunan Milano - in North Sumatra.”

“In order to maintain Wilmar’s transparency and accountability, these issues and Wilmar’s internal actions have already been voluntarily reported publicly on our website through our grievance procedure.”

“Many of these highlighted issues need a bigger platform than sustainable certification to resolve; they require collaborations between governments, companies, and civil society organizations like Amnesty International. Much like the large steps taken in the implementation of no deforestation commitments, it takes more than just companies to help overcome these issues that affect the lives of plantation workers,” adds Perpetua George, assistant general manager for Wilmar Group Sustainability.

“We are aware that Amnesty International has already taken steps to engage the Indonesian government on these issues, and this is a big step. We have reached out to Amnesty International to work more collaboratively with the industry and we hope that this can be a reality.”

by Gaynor Selby