Improving outcomes for female workers in Indonesian palm oil plantations

“We’re happy and more motivated,” said Leni, a woman working at PT. Gruti, Lestari Pratama (GLP), an Indonesian palm oil plantation, who, along with thirty-six of her female colleagues, has been promoted from a casual to permanent worker. “As casual workers, our earning was not adequate, as we only received around Rp. 1,500,000 per month. After being promoted to permanent workers, we received Rp. 2,800,000 per month,” she added.

Leni and her female colleagues work in the palm oil plantations of PT. GLP, a palm oil company in North Sumatra, and say the promotion has had a significant effect on their lives.

It is estimated that Indonesia and Malaysia produce 85% of the estimated global $65 billion supply of the commodity. In Indonesia alone 16.2 million people depend on palm oil cultivation for their livelihoods.

In Indonesian palm oil plantations, men typically work as harvesters of palm fruit, while women are given the work of fertilizer application, pesticide spraying and loose fruit collection, thus playing an important role in plantation productivity. However, women plantation workers are often employed on a casual status and are rarely given permanent employment status. This can lead to significant disparities in working conditions between men and women.

Consequences

The consequences of this can be far reaching for women palm oil workers especially in terms of wages and benefits. As casual workers, women can earn wages lower than minimum and have limited or no access to social security and insurance.

The most adverse impact of this casual status on women is the lack of access to maternity leave. Many casual women workers can lose their jobs and income when they become pregnant. In other cases, casual women workers can continue to perform risky work such as pesticide spraying while pregnant or breastfeeding.

Addressing the issues

To respond to this, Earthworm Foundation, Nestlé and Golden Agri-Resources (GAR), have been working together to address the issues faced by women casual workers in the Indonesian palm oil supply chain. “Gender equality was one aspect we identified needed improvement in the industry.” said Siti Halimah, Labour Specialist at Earthworm Foundation.

One way to do this was through the creation of Earthworm’s Company Guidelines on Fair Employment of Casual Workers in Indonesian Palm Oil Plantations. “We wanted to create a practical step-by-step resource for palm oil companies, to use in their efforts to improve conditions for casual workers.

For palm oil plantations with sizeable casual workforces, it is recommended that companies first identify which workers are actually performing permanent work and then absorb these workers into the permanent workforce. For those who are doing temporary work, it is recommended to fulfill all their basic rights.” said Janhavi Naidu, Earthworm Foundation’s Programme Lead for Workers’ Welfare and Labour Rights.

To address the issue, with Nestle’s funding and support, GAR and Earthworm worked closely with PT. GLP to promote their women casual workers. Earthworm supported PT.GLP from a technical perspective, carrying out field assessments, co-developing action plans, training company management and sharing its guideline and practical tools.

Further postive effects

GAR has provided valuable hands-on support to PT. GLP, sharing examples of its own practices on casual workers promotions as well as supporting the site from a business perspective. As a result, PT. GLP was able to promote 101 male casual workers between 2018 to 2020, and 36 women casual workers in 2021.

At PT. GLP women make up 25% of their workforce, of which more than 50% are now permanent. Going forward PT. GLP will continue to promote all casual workers at site to permanent status.

These women’s promotions have further positive effects, as Leni’s colleague Desmawarni explains, “Now, we are able to send all of our kids to school,” she said. “So this promotion helps a lot. We are very grateful.” Another colleague, Leginem adds, “I can also save some money to prepare for our future when we no longer work with the company, to support my kids’ study.”

This is significant. Casual workers do not have any pension benefits and many families work in palm oil for years, unable to access other opportunities including education. Now with permanent status, the women get access to the company’s medical clinic, medical insurance, paid leave, maternity leave and a higher income.

Incentive for business

There is incentive for businesses as well to absorb their casual workers into their permanent workforce. As Mr. Suwardi, Plantation Manager at PT. GLP says: “For the company, after casual workers are promoted to permanent workers, their productivity increases, which consequently increases company productivity with a lower cost.”

Mr. Tengku Badrun, Production and Agronomy Manager at PT. GLP adds “the company is committed to providing equal opportunities in employment and career advancement to both men and women. In the future, we will pay more attention to fulfilling the rights of women workers to incentivise good performance. We also ask our partners to work together and support us to make this happen.”

All partners hope this progress can be replicated elsewhere in the industry. Earthworm Foundation will continue to work with its members GAR and Nestlé and their suppliers, to replicate and scale such positive examples of success in the Indonesian palm oil industry.

“What PT. GLP is doing, as a part of our supply chain, is a good example that other companies can follow to improve the welfare of workers, especially for women workers and of course for the sustainability of the company's business. All parties must support these efforts.” Said Fauzan Kurniawan, Head of Supplier Engagement, GAR.

The consequences of this can be far reaching for women palm oil workers especially in terms of wages and benefits. As casual workers, women can earn wages lower than minimum and have limited or no access to social security and insurance.

The most adverse impact of this casual status on women is the lack of access to maternity leave. Many casual women workers can lose their jobs and income when they become pregnant. In other cases, casual women workers can continue to perform risky work such as pesticide spraying while pregnant or breastfeeding.

Addressing the issues

To respond to this, Earthworm Foundation, Nestlé and Golden Agri-Resources (GAR), have been working together to address the issues faced by women casual workers in the Indonesian palm oil supply chain. “Gender equality was one aspect we identified needed improvement in the industry.” said Siti Halimah, Labour Specialist at Earthworm Foundation.

One way to do this was through the creation of Earthworm’s Company Guidelines on Fair Employment of Casual Workers in Indonesian Palm Oil Plantations. “We wanted to create a practical step-by-step resource for palm oil companies, to use in their efforts to improve conditions for casual workers.

For palm oil plantations with sizeable casual workforces, it is recommended that companies first identify which workers are actually performing permanent work and then absorb these workers into the permanent workforce. For those who are doing temporary work, it is recommended to fulfill all their basic rights.” said Janhavi Naidu, Earthworm Foundation’s Programme Lead for Workers’ Welfare and Labour Rights.

To address the issue, with Nestle’s funding and support, GAR and Earthworm worked closely with PT. GLP to promote their women casual workers. Earthworm supported PT.GLP from a technical perspective, carrying out field assessments, co-developing action plans, training company management and sharing its guideline and practical tools.

“We wanted to create a practical step-by-step resource for palm oil companies, to use in their efforts to improve conditions for casual workers. For palm oil plantations with sizeable casual workforces, it is recommended that companies first identify which workers are actually performing permanent work and then absorb these workers into the permanent workforce. For those who are doing temporary work, it is recommended to fulfil all their basic rights.” said Janhavi Naidu, Earthworm Foundation’s Programme Lead for Workers’ Welfare and Labour Rights.

To address the issue, with Nestle’s funding and support, GAR and Earthworm worked closely with PT. GLP to promote their women casual workers. Earthworm supported PT.GLP from a technical perspective, carrying out field assessments, co-developing action plans, training company management and sharing its guideline and practical tools.

Further positive effects

GAR has provided valuable hands-on support to PT. GLP, sharing examples of its own practices on casual workers promotions as well as supporting the site from a business perspective. As a result, PT. GLP was able to promote 101 male casual workers between 2018 to 2020, and 36 women casual workers in 2021.

At PT. GLP women make up 25% of their workforce, of which more than 50% are now permanent. Going forward PT. GLP will continue to promote all casual workers at site to permanent status.

These women’s promotions have further positive effects, as Leni’s colleague Desmawarni explains, “Now, we are able to send all of our kids to school,” she said. “So this promotion helps a lot. We are very grateful.” Another colleague, Leginem adds, “I can also save some money to prepare for our future when we no longer work with the company, to support my kids’ study.”

This is significant. Casual workers do not have any pension benefits and many families work in palm oil for years, unable to access other opportunities including education. Now with permanent status, the women get access to the company’s medical clinic, medical insurance, paid leave, maternity leave and a higher income.

Incentive for business

There is incentive for businesses as well to absorb their casual workers into their permanent workforce. As Mr. Suwardi, Plantation Manager at PT. GLP says: “For the company, after casual workers are promoted to permanent workers, their productivity increases, which consequently increases company productivity with a lower cost.”

Mr. Tengku Badrun, Production and Agronomy Manager at PT. GLP adds “the company is committed to providing equal opportunities in employment and career advancement to both men and women. In the future, we will pay more attention to fulfilling the rights of women workers to incentivise good performance. We also ask our partners to work together and support us to make this happen.”

All partners hope this progress can be replicated elsewhere in the industry. Earthworm Foundation will continue to work with its members GAR and Nestlé and their suppliers, to replicate and scale such positive examples of success in the Indonesian palm oil industry.

“What PT. GLP is doing, as a part of our supply chain, is a good example that other companies can follow to improve the welfare of workers, especially for women workers and of course for the sustainability of the company's business. All parties must support these efforts.” Said Fauzan Kurniawan, Head of Supplier Engagement, GAR.