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Research into palm oil plantations in Indonesia reveals that workers and their families are paid illegally low wages, are exposed to dangerous pesticides and face routine abuse so that the US food and beverage giant PepsiCo can make world-famous products such as Quaker Chewy Granola Bars, Cheetos and Lay’s potato chips. Now international trade unions and environmentalists have joined forces in their fight for workers’ rights.
The US-based International Brotherhood of Teamsters, a 1.4 million-member multi-sector union has, along with the International Union of Food Workers, mobilised in the battle against widespread labour and human rights violations on plantations run by Indofood, a major Indonesian partner of PepsiCo.
“Solidarity between workers in the United States and on plantations in Indonesia is very important because we need support to pressure PepsiCo to force Indofood to improve labour conditions,” says Herwin Nasution, executive director of the Indonesian union OPPUK (Organisasi Penguatan dan Pengembangan Usaha-Usaha Kerakyatan, which loosely translates to Organisation for the Strengthening and Development of Community Enterprises).
The Teamsters represent the approximately 20,000 PepsiCo workers at Pepsi beverage, Frito Lay and Quaker production facilities in the US, who were consulted on the decision to send letters to PepsiCo’s board and CEO Indra Nooyi.
“When our members hear stories about palm oil plantation workers in Indonesia - there being the presence of child labour, or illegally low wages and hazardous pesticides – [they understand],” Timothy Beaty, director of global strategies at the Teamsters, tells Equal Times.
“[Exploitation of workers] is wrong. All workers should have the right to form a union and have the opportunity for dignity,” Beaty says.
Recent reports from the Rainforest Action Network (RAN), the International Labour Rights Forum (ILRF), and local NGOs and unions are painting an increasingly dire picture of work conditions on plantations across the archipelago. According to RAN, labour rights are being routinely violated in several plantations connected to PepsiCo in Indonesia.
“PepsiCo is turning a blind eye as it sources its palm oil from companies who abuse workers on their palm oil plantations, cheating them out of fair pay and benefits, exposing them to toxic chemicals and forcing them to bring their children and spouses to work,” says Pearl Robinson, a national organiser for RAN. "PepsiCo can and must do better."
Since the turn of the century, palm oil has rapidly grown to become of the world’s most popular consumer crops. This is partly down to the boom in biofuels driven by European Union energy policies, but more recently, the increasing demand for processed foods in developing countries and the United States has also contributed to the widespread use of palm oil.
Palm oil is used as a cheap replacement for unhealthy and increasingly prohibited hydrogenated oils. But its cultivation has led to massive deforestation in Indonesia, the exploitation of workers and land-grabbing from local communities.
Today, Indonesia is the world’s largest producer and exporter of palm oil and the commodity is linked to a number of Indonesia’s billionaires, according to the environmental news website Mongabay.
Currently, around 10 million hectares of oil palms are under cultivation, producing 30 million barrels of crude palm oil a year. The palm oil industry is a key source of revenue for the government, and it is controlled by several large conglomerates including PT Astra Argo Lestari and PT Bakrie of Indonesia, and the Singapore-based companies Musim Mas and Wilmar International.
Of the many global companies implicated in so-called ‘conflict palm oil’, PepsiCo plays a particularly egregious role due to its partnership with Indonesia’s largest processed food and beverage company, Indofood.
OPPUK, RAN and ILRF conducted an investigation of Indofood’s Sumatra plantations in 2015, finding serious labour violations on every single one. This included the use of temporary, precarious workers, unethically low wages, child labour, a lack of adequate health and safety protection, and the intimidation of workers who attempted to engage with independent unions.
"PepsiCo must require Indofood to put the rights of its workers first by aligning its policies and practices with the Free and Fair Labour Principles” says Nasution, referring to the guidelines released by an international coalition of labour and human rights NGOs in 2015. "PepsiCo must cancel its deals with Indofood if there is no progress."
While PepsiCo did release an updated palm oil policy in 2016, RAN believes this is not enough. Moreover, there is a huge loophole in this policy, as it does not require joint-venture partners to meet the same requirements for procuring palm oil, thereby allowing Indofood to sell PepsiCo branded products using unethically sourced palm oil.
In fact, an update of the 2015 investigation found little change on the ground, and an expanded analysis found that all of PepsiCo’s main importers of palm oil into the US are at high risk of environmental and social harm, as the policy is not being implemented.
“PepsiCo has a moral obligation to confront the fact that the conflict palm oil currently in its supply chain, and possibly in hundreds of its products the world over, is in fact deadly for people and the planet,” said Gemma Tillack, agribusiness campaign director for RAN in a public statement.
NGOs and trade unions have been working together to put public pressure on PepsiCo, including conducting joint actions at shareholders’ meetings and even unfurling a banner underneath the company’s iconic New York City billboard last year. They are also jointly campaigning on social media, targeting PepsiCo’s marketing efforts to sensitise consumers about their dangerous palm oil sourcing policies.
While PepsiCo may be one of the biggest global brands connected to labour violations on Indonesian palm oil plantations, it is not alone. According to RAN, the supply chains of several large global brands are tainted with unethical palm oil, including Kraft, Heinz, Kellogg’s and Mars.
Part of the failure is due to unverifiable policies, but also the failure of institutions in the Indonesian government, not to mention organisations such as the Roundtable on Sustainable Palm Oil (RSPO). Representing the industry as well as NGOs, the RSPO has yet to take action on plantations caught violating labour rights, let alone monitor industry members properly.
“The RSPO continues to certify palm oil companies that are driving the gross violation of human and workers’ rights across the globe,” says Tillack.
The Palm Oil Innovation Group is one entity that is trying to go above and beyond the RSPO, with stronger labour and environmental guidelines and more rigorous transparency and enforcement. Though relatively small, it does include some global brands, such as Danone and Ferrero, as members.
The future of sustainable, ethical palm oil will depend on more brands making similar, fully-verifiable efforts. Until then, giants such as PepsiCo will continue to face pressure to put an end to labour and human rights violations in their supply chains.
[Nithin Coca is a freelance journalist who focuses on social and economic issues in developing countries, and has specific expertise in south-east Asia.]