Strengthening the Peasant and Plantation Workers' Movement in North Sumatra

2010-03-01

Issue No: 74 January - March 2010

By Manginar Situmorang

Indonesia currently has a total of 7.2 million hectares (ha) of planted area of palm oil. In line with the government plan to make Indonesia the world's largest palm oil producer (see Table 1 showing Indonesia's portion of world palm oil production), Indonesia is projected to convert 6-20 million hectares land into palm oil plantations.¹ Palm oil plantations in North Sumatra have become a new agro-industry since 1911. Recently the Indonesia government approved the conversion of 26.7 million hectares of land and forest into palm oil plantations.² Sawit Watch, an association of NGOs working on oil palm issues, recorded that the land clearing to be converted into oil palm plantation has caused 630 land disputes. The most recent land dispute is the 6,140 hectares land clearing in Tapanuli Tengah regency, North Sumatra.³

KPS (Kelompok Pelita Sejahtera), as an NGO working on palm oil issues, has been trying to link up workers' and peasants' movements in North Sumatra province. This article is based on the experience of KPS in organizing peasants and plantation workers in three regencies (Langkat, Sergei and Asahan) in North Sumatra Province.

Source:http://www.pecad.fas.usda.gov/highlights/2007/12/Indonesia_palmoil/

Industrial relations and workers' rights within the plantation

Historically in the 1950 to 1960s, plantation workers in North Sumatra joined a very strong union, Sarbupri, in large numbers. By joining the union, they used to have their basic rights fulfilled including 13 incentives (benefits) like basic food, clothing, housing, etc. The strength of the workers was broken down once the 'New Order'⁴ militaristic regime took power in the late 1960s. Most of the Sarbupri members were imprisoned and accused of being communists. This, then, de-linked workers from the historical past of having a strong plantation worker union. At present, there is only one union recognized by plantation employers, that is, SPSI (Serikan Pekerja Seluruh Indonesia – the All-Indonesia Labour Union), which acts more like a company partner.⁵ Casualization has been an employment trend in the plantation industry since the 1970s; workers that previously were mostly permanent with benefits, have now become mostly contract workers with little or not benefits. One of the casual workers' jobs is to clean up the areas around the trees. They call it 'making plates', that is, to clean up a plate-shaped area.

Workers on the plantation are composed of casual workers and permanent workers. Casual workers earn 500,000-760,000 IDR (US$50-83) per month, which is insufficient to cover their monthly basic needs. On the other hand, most of the permanent workers are the third generation of plantation 'coolies', workers who were forced to migrate from Java Island to work at the newly opened plantation during Dutch colonization. All permanent workers live inside the plantation as they are provided with some poor housing facilities.

For hundreds of years, the plantation has been maintained as a colony where permanent workers and their families live under 24-hour surveillance from plantation guards. Regarding rights to occupational safety and health, KPS's finding, in five plantation estates in North Sumatra (PT Lonsum Turangi Estate, Socfindo Mata Pao, PTPN II Langkat, PT BSP and PT Anglo Eastern Plantation in Asahan) shows that in 2008 there were 47 occupational accidents in a year. 32 workers (68.08%) were lightly injured, 11 workers (23.40%) were blinded by latex and resin and two workers (4.25%) passed away. Two tables below show the wages and violations of workers' rights to unionize in these five plantation estates.

Table 2: Wages⁶

Despite the centrality of North Sumatra oil palm industry in leading Indonesia oil palm production, the workers, especially casual workers, are severely low paid.

Name of Plantation	Working Status and average of take-home pay by wages	Percentage of basic needs covered
PT Buana Estate	Permanent Workers: Average wages are 2,352,000 IDR (US$258) per month. This includes a basic wage for daily attendance, of 800,000 IDR and also a harvesting premium - FFB (Fresh Fruit Bunch) bonus - of 20-25IDR/kg, which is paid during the harvesting period. There are other incentive wages such as for working on Sundays. Casual Workers (Buruh Harian Lepas, or BHL): The average wages are 600,000-700,000 IDR per month. The wages of casual workers are based on the minimum wage. The minimum monthly wage in North Sumatra is 886,000 IDR so their daily wage is about 886,000/25, i.e., around 35,000 IDR. Due to the number of actual working days which is unstable and often lower than 25, casual workers on average earn below the minimum monthly wage, per month. Permanent workers at PT Buana Estate are covered by social insurance ('Jamsostek'). The insurance covers healthcare, retirement, occupational accident and death. The employer claims that casual workers are also covered by insurance for occupational accident and death. Yet the employer does not give them the insurance card which allows them to draw the benefits of the insurance.	Sufficiently covered 50-60% coered
PT Soeloeng Laoet	Permanent Workers (SKU): SInah Kasih Wages are around 2,300,000 IDR per month. This includes a basic wage of 890,000 IDR and harvesting premium bonus of 20 IDR/kg, with 30 IDR/kg if the amount harvested is above 1,600 kg and 40 IDR/kg for harvesting on a holiday. Casual Workers: Wages are around 600,000 IDR per month—basic wages x 25 working days, but usually they are only employed for 18 days	Around 60%
Plantations in AekLoba Asahan PT Graha Dura RGM (Raja Garuda Mas) now Asian Agri Socfindo	In these plantations there are no permanent workers. For casual workers, the average wage is 32,000 IDR per day, but they have to spend money for gasoline, lunch and food, so usually the take-home pay is 12,000-15,000 per day. They work 3-4 days per week. For casual workers the wage is 20,000 IDR per day. But they have to pay the truck that takes them to worksite; that is 5,000 IDR per day, so their take- home pay is 15,000 IDR per day. 40,000-50,000 IDR per day for a family - usually three people, as the male worker usually brings his wife and child to work as casual workers and the wage is paid to the family.	Surely the wage is not enough to cover their needs of food so workers have to work in many places as casual workers

Table 3: Industrial disputes in 2007-9 ⁷

Palm OilPlantationArea	Situation	Strategy
PT Sri Agung Rahayu	37 workers were demoted from the plantation to a factory owned by plantation. They were demoted because of trying to organize workers. There is also a case where workers tried to organize but then the police arrested workers. Among employers in Indonesia, it is commonly the case that employers involve police or low-ranking military officers to handle industrial disputes and strikes.	Workers organized by KPS built relations with the community surrounding the plantation. Now there are two peasant groups and one workers’ group in Sri Agung Rahayu Plantation working with each other. This organizing strategy is very useful to back up the workers’ struggle inside the plantation.
PT Soeloeng Laoet	In 2001, permanent workers tried to form an independent union. The employer busted the union with violence and dismissed several workers. In Sergei, the area where this plantation is located, the foremen are sexually abusive against male workers’ wives. The manager also forces workers to join a particular political party.	As an organizing strategy, workers and KPS formed community schooling for the children living in the plantation and its surrounding area. By doing that, organizers can approach and organize the parents.
PT Indah Pontjan	20 casual woman workers who had worked for 20 years (as casual workers) were ‘dismissed’ (they were no longer employed).	KPS advocated their case legally. Now the case has reached the Supreme Court. They are still waiting for the court decision. Nevertheless this has been a very inspiring experience for other casual workers.

The impact of the plantation industry on peasants and community

Land disputes, changing cultivation patterns and disputes over water

Land disputes still remain the source of protracted conflicts between plantation and peasants in North Sumatra. In Langkat regency alone there are 47 protracted land disputes involving 3,000 families. PT Buana Estate has been in conflict with the peasant group KTMIM (Kelompok Tani Masyarakat Ingin Makmur – Peasant-Society Group for Welfare) since 1985. In 1985, PT Buana Estate grabbed 70.3 ha land and converted it into palm oil plantation. PT Buana Estate also called in state military to repress the peasants' movement.⁸ In June 2007, KTMIM reclaimed the land and started cultivating it. Yet, one year later, the plantation along with military police attacked the peasants and their families, arrested 47 peasants and left one peasant woman in coma.⁹ Up to 2009, there have been 238 cases of land occupation and reclamation by the peasants; of these, 226 cases are land disputes between state-owned Plantations and peasants, and the rest are between private plantation estates and peasants. The involvement of military, police and local militia is still prominent in plantation estates. The peasants who become landless by eviction then are absorbed into the plantation industry as casual workers.

Another well-known impact of monoculture tree planting in the plantation industry is the competition between plantation trees and agriculture crops, and proliferation of pests. In the Bahorok sub-district, for instance, the narrowing agricultural land for subsistence due to plantation expansion has caused pest proliferation, concentrated in small rice fields. Surely, this leads to another issue - food scarcity.

The plantation has also changed the value system of the community. There has been a potential of horizontal conflicts in the society. Small peasants maintaining their agricultural land for subsistence crops must compete with farmers converting their land into small plantations, in the distribution of the water from the irrigation system. Moreover, the industrialization in rural areas has eroded solidarity values among the people.

Informalization, and how the community is forced to contribute to the plantation production system

Furthermore, the plantation has become a centre pushing communities to be part of its production process. Families of plantation workers are forced to earn additional income by becoming casual workers, especially during the harvesting season. Meanwhile, landless peasants are forced to become casual workers who must work in more than one plantation to survive. Other informal work that benefits the plantation is, for example, the small-scale home-based industry producing brooms using the midrib of palm oil leaves as the raw material. This industry somehow benefits the plantation, as it 'helps' the company to dispose of and use up the waste.

Union sign next to paramilitary sign. Source: Sri Wulandari

There are two dimension of informalization triggered by the plantation industry. The first dimension is the marginalization of peasants as they become landless and are forced to sell their labour to plantations. The second dimension is the casualization of work. The majority of the workforce, or the formally employed (contractually employed) workforce is mainly men; other family members who are women and children also must work but their labour is not paid. The contract system is also an issue inside the plantation. Most of contract workers have worked for 15-20 years. Similar working periods also apply to many casual workers.

The question that therefore arises is: when the plantation has become a central element of the community in which all people are forced to contribute their labour, then how can the people improve their bargaining power against the excessive authority of plantation over their lives?

Organizing initiatives developed in bridging community and workers

So far, several initiatives have been developed by KPS. In terms of organizing workers, in early 2000 there was an attempt to set up an independent union at PT Soeloeng Laoet Sindang Kasih, Sergei. The attempt ended with the violent attack from the company and military police troops. A similar attempt was conducted in Asahan and the plantation mobilized militia to attack the peasants-workers meeting. KPS so far has developed two main organizing initiatives which involve peasants groups, workers groups and the community. Those initiatives are:

1. Setting up informal schooling activities for children living in plantation area in Serdang Bedagei regency. The involvement of parents becomes the entry point of organizing work.

2. Facilitating regular meetings between peasant groups and workers, as in the four plantation communities Langkat (Buana Estate Plantation and London Sumatra Plantation), Asahan (Grahadura and Socfindo), and Serdang Bedagei (Soeloeng Laoet Sindang Kasih Plantation and Sriagung Rahayu Plantation). So far, five peasant-workers groups have been formed. The groups have regular meeting activities including capacity building training, paralegal training and action.

To sum up, activities like these are conducted regularly with peasant-workers groups with the expectation that they will improve the political bargaining power of people. Here are some steps experimentally tried in the organizing work:

First, changing the spontaneous action into an action based on critical awareness. Spontaneous action as a form of resistance is very common for landless peasants who have been deprived of their by the plantation. The main task of organizing work is to change the spontaneous action into critical consciousness.

Second, critical education is undertaken among the peasants and workers, to raise their critical consciousness such that they can perceive the social, political, and economic repression and take action against the oppressive elements of the society. This requires identifying and elaborating the power relations within the society. So, the initial step of the critical education is to identify oppressive elements within plantation community. The next process will be 'inward looking' process that is to assess the 'power within', power generated from peasant-workers alliance. The assessment should see how the 'power within' can be a weapon against the oppressive elements.

Third, another issue regarding plantation industry is a CSR-driven international initiative, the Roundtable for Sustainable Palm Oil (RSPO). RSPO is a multi-stakeholder initiative set up in 2003 between private companies and civil society organizations, striving to advance the production procurement and use of sustainable palm oil through the development, implementation and verification of credible global standards and, the engagement of stakeholders along the supply chain.

The RSPO involves seven sectors: 1) oil palm growers, 2) palm oil processors and/or traders, 3) consumer goods manufacturers, 4) retailers, 5) banks and investors, 6) environmental/nature conservation NGOs, and 7) social/developmental NGOs. Although governments are not members of RSPO, they have helped at the early stages to establish the RSPO, and are engaged through the national producer organizations.¹⁰ RSPO contains several social criteria regarding industrial relationships in the plantation, such as open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties (Criteria 6.2). Pay and conditions for employees and for employees of contractors always must meet at least legal or industry minimum standards and be sufficient to meet the basic needs of personnel and to provide some discretionary income (Criteria 6.5), and the employer must respect the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer is to facilitate parallel means of independent and free association and bargaining for all such personnel (Criteria 6.6). Indonesia itself has completed its country interpretation of the RSPO Principles and Criteria and started the certification of voluntary sustainable production of palm oil in December 2007.

Companies with RSPO certification ¹¹

PT Musim Mas

The company was founded in 1972 by Anwar Karim and is now owned by Bachtiar Karim. Musim Mas currently owns 180,000 ha plantations in Riau, North Sumatra, Jambi and Kalimantan.

A huge labour dispute took place in 2005 as workers demanded rights to unionize. Over 700 workers were sacked. The dispute then was settled in Industrial Dispute Court with the final decision in favor of the plantation.¹²

In Central Kalimantan, two subsidiaries of Musim Mas, PT Sukajadi Sawit Mekar (SSM) and Maju Aneka Sawit (MAS), have been engaged in conflicts with local communities in Kotawaringin Timur district since 2004, in Sebabi, Tanah Puti and Kenyala villages. The conflict was triggered by one-sided land clearances to expand the plantations. The land was cultivated with rubber trees, jelutung gum trees, and rattan. The land clearing was conducted without the communities' consent.¹³

Musim Mas was also among the companies whose licenses were suspended by the Forestry Department in 1997 when devastating forest fires swept through Indonesia's forests. Many of the fires were deliberately set by oil palm companies to clear the forest area for planting. The fires created a choking smog across the region, leading to health impacts, as well as destroying countless livelihoods, wildlife habitats and resulting in massive CO2 emissions.¹⁴

Currently among 11 plantations certified by RSPO in the world, three of them are in Indonesia. Those plantations are PT Musim Mas in Sorek (Riau), PT Hindoli in South Sumatra and PT PP London Sumatra in North Sumatra. Yet, according to Sawit Watch, these three plantations are still engaged in conflicts with workers and community. (See Box for some details of these conflicts.)

PT Hindoli

This company is a subsidiary of the Cargill Group, which owns five palm oil plantation companies in Indonesia and New Guinea. PT Hildoli is still engaged in protracted land dispute with the local indigenous community as reported by DTE and Walhi (Indonesia Environment Group) Kalimantan.

PT PP London Sumatera Indonesia Tbk

This more than century-old company was founded in 1906 as a British-owned company pioneering rubber, coffee, cacao and tea plantations in the pre-war era, before shifting into palm oil. The company was a subsidiary of British palm oil traders Harrison and Crossfield. They sold out the company shares in the mid-1990s. Since then PT Lonsum has been listed on the Jakarta Stock Exchange.¹⁵

The company has been involved in several social conflicts with local communities in Sumatra, Kalimantan and Sulawesi. Most of them are land disputes and the company has used violence to repress the local communities.¹⁶ In 2009, Lonsum sent national police troops to repress Dayak (an indigenous Indonesian tribe of people) villagers occupying the company base camp in protest against land grabbing.¹⁷ The police opened the fire shooting the villagers. Some villagers were arrested and accused of committing terrorist action.¹⁸ In Sulawesi 2003, three farmers were killed by mobile brigade police and several others were seriously wounded in a long-running land dispute.¹⁹

Conclusion

Currently there are 71 palm oil plantations including three state-owned plantations in Indonesia registered as RSPO members. Despite the voluntary nature of RSPO certification and membership, the world CPO (Crude Palm Oil) market in principle prioritizes so-called sustainable products. Meanwhile in Indonesia, there is a growing concern since three certified companies only produced 1.7 million tones of CPO out of 20 million annual total products. While domestic consumption remains at five million tones per year, it means there is around 13.3 million tones of CPO produced by palm oil companies that are non-sustainable and therefore less competitive in the world market. Many plantations nowadays including state-owned plantations are accelerating the companies' improvement so they will be eligible for the certification.

PT London Sumatra Head Office in Medan Source: Sri Wulandari

Again, the question remains here is whether RSPO brings positive impacts for workers and communities? The critical education should also touches the supply chain issue from local to international level. Workers and peasants must have comprehensive understanding on production and distribution process in the plantation industry. This is important to counter balance CSR-driven initiative that can subtly put out the struggle. The certification of plantation is obviously to fulfill the interests of the international market. Indeed, on the ground level this can be useful to demand the plantation to fulfill the rights of workers and resolve the land dispute. Nevertheless, the backbone of people's bargaining power always relies on the strength of the social movement.

Endnotes

Wulandari, Sri The impact of increasing food price on palm oil workers in North Sumatra, Oxfam Novib Research, 2008.
http://cetak.kompas.com/read/xml/2010/03/09/03492985/sawit.rawan.pelanggaran.ham
A regency is a political sub-division of a province in Indonesia.
'New Order' is terms coined by Soeharto as he came into power in 1966, to differentiate his regime from the old regime later referred to as the old order regime.
Wulandari, Sri, The impact of increasing food price on palm oil workers in North Sumatra, Oxfam Novib Research, 2008.
Wulandari, Sri, The impact of increasing food price on palm oil workers in North Sumatra, Oxfam Novib Research, 2008
Wulandari, Sri The impact of increasing food price on palm oil workers in North Sumatra, Oxfam Novib Research, 2008.
http://www.binadesa.or.id/index.php?option=com_content&task=view&id=67&Itemid=217
http://asianfarmers.org/?p=s21
Mapping of Labour Issues and Advocacy Works in Palm Oil Production, Oxfam Novib 2008.
Data from Sawit Watch published in Down to Earth (DTE) 80-81/June 2009. Issues of DTE can be found at: http://dte.gn.apc.org/news.htm.
From www.KapanLagi.com, 8 June 2006
nordin-journal.blogspot.com/2008/12/konflik-pt-ssm-musim-mas-group-dan.html
See DTE (Down To Earth) 35, supplement page 8
DTE 42
nasrilbahar.blogspot.com/2007/10/akuisisi-pt-lonsum-diminta-jadi-momen.html
DTE 42
DTE 42
DTE 59

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