Just Transition in the Palm Oil Industry: A Preliminary Perspective

by | Sep 21, 2021 | Report and Publication

What could a socially and ecologically just palm oil industry look like? Worker load fresh fruit bunches into a truck, North Sumatra, Indonesia © RAN/OPPUK/Nanang Sujana.

Oliver Pye, Fitri Arianti, Rizal Assalam, Michaela Haug, Janina Puder[i]


The palm oil industry as a whole is currently unsustainable, both ecologically and socially. This is because the basic business model is based on the plunder of nature through large-scale monoculture plantations that destroy biodiversity and depend on the widespread use of herbicides, pesticides and chemical fertilizers. This ecological model of cheap nature is connected to a social model that depends on cheap labour (Pye 2018).

Palm oil billionaires make huge profits because they exploit their workers: low wages, precarious jobs and bad working conditions are a systematic part of the industry as it stands. Current initiatives that seek to address sustainability such as the RSPO do not challenge this business model and cannot, therefore, transform the industry in a future-oriented way. Business interests dominate the initiatives; labour has no voice. The continued expansion into forests and indigenous lands is not adequately addressed (Pye 2016).

Environmental justice groups and local communities often have little power to stop large corporations who act transnationally. And the environmental justice movement is disconnected from labour within the plantations themselves. At first glance, social and environmental groups and labour unions often have contradictory interests.

Environmental movements usually ignore labour issues, and all too often campaigns around climate justice have been opposed by workers and labour unions. Indigenous communities depending on their surrounding nature suffer from river pollution, land degradation and displacement that are related to plantation development. Workers often react defensively if “their” employer is criticized for environmental destruction or human rights abuses, and fear job losses that might occur if companies are shut down or their expansion is restricted.

This paper discusses whether a Just Transition perspective, i.e. the social-ecological transformation of the industry that addresses both labour and environmental justice demands, could overcome these contradictions in theory, and how a Just Transition perspective could be developed in practice through the collaboration between the labour, indigenous peoples and environmental justice movements. As many plantation permits are now coming to the end of their term, an opportunity is emerging to shape the social-ecological transformation of these monoculture landscapes – an opportunity that needs to be grasped.


What is Just Transition?

In response to the Climate Emergency, many trade unions across the world have developed Just Transition strategies. Barry (2013: 237) defines Just Transition as “a strategy of the managed transition to a green, low-carbon and renewable-energy economy including the creation of decent, green-collar jobs.” The basic idea behind Just Transition is that workers and trade unions in unsustainable and climate-relevant industries develop a pro-active stance to transform or exit (in the case of fossil fuels) the industry, whilst defending jobs, pay and working conditions.

Generally, Just Transition marks a comprehensive, flexible approach to helping negatively affected workers to deal with the costs and challenges of climate change and transformation processes towards a ‘greening’ of the economy (Kohler 2010). Advocates of a Just Transition demand a fair compensation of negatively impacted workers and communities for economic and health losses (View 2002). An important point for all Just Transition perspectives is that strategies striving towards a decarbonization of the economy tend to neglect the needs and aspirations of many workers currently employed in so-called ‘brown’ or non-sustainable industries (Puder 2019).

Broadly spoken, there are three main paths to a Just Transition (Stevis and Felli 2015). The first is a defensive position in which trade unions are included in tripartite negotiations within a hegemonic discourse of green growth and Sustainable Development (Smith 2017, OECD 2017, ILO 2015). Here, unions often try to slow down the transition and to cushion its social impact on their members. An example is the position taken by the German Trade Union Council in the negotiations on the coal industry, where it positioned itself against climate justice activists to prevent a rapid exit from the industry (DGB 2020).

A second position is more proactive in that unions demand government intervention to support the development of green industries and retraining of workers, e.g. in policy platforms such as the Green New Deal put forward in the US or the Green Industrial Revolution proposed by the Labour Party in the UK. Another example for this position is the ‘One Million Climate Jobs’ campaign put forward by British trade unions that demands government intervention in key sectors and shows how this could create more and better jobs in green industries (Campaign against Climate Change 2014).

A transformative Just Transition approach integrates the perspectives of workers. Photo: A woman worker without pay helps her harvester husband collect loose fruits in PT. London Sumatra Plantation (PT. Lonsum), Deli Serdang. North Sumatra © RAN/OPPUK/Nanang Sujana. ­

The third position takes a more transformative ‘social ecological’ approach. Here, trade unions and workers actively use their associational and structural power to push through a social-ecological transformation of their industry. This is connected to an understanding of climate change and ecological destruction as the result of capitalist relations of production based on the principle of unlimited accumulation of capital and constant economic growth (Räthzel et al. 2018; Stevis et al. 2018) and to more far-reaching changes to the structure of the economy Unions such as the National Union of Mineworkers (NUMSA) in South Africa argue for the end of coal and the democratic control and management of a renewable energy sector (Räthzel et al. 2018). Another example is the Building Workers Federation (BLF) in Australia, which, in the 1970s, took strike action to prevent destructive building projects on city parks and recreational areas – something they called ‘Green Bans’ (Burgmann and Burgmann 1999).

So far, no Just Transition perspective has been developed by unions in the palm oil industry. In this paper, we adopt the more proactive and transformative approach of the second and third paths. We believe that alliances with environmental groups and other grassroots organizations can help unions develop transformative strategies and alternative production models, which could reconcile the demands of the environmental and the labour movement.


The Palm Oil Industry – the social-ecological problem

Supporters of the oil palm industry see an increasing global demand for palm oil, push for further expansion and highlight its contribution to poverty reduction and job creation (e.g. Indonesian Palm Oil Board 2007; World Growth 2011). However, a large body of studies demonstrates that recent palm oil expansion has many harmful social and ecological consequences and that palm oil production in its current form contributes to the global climate crisis.

Indonesia is among the world’s top three greenhouse gas emitters because of deforestation, peatland degradation and forest fires – and the palm oil industry is a major driver of all of these. Oil palm development causes deforestation (Koh and Wilcove 2008; Dohong et al. 2018; Austin et al. 2019), biodiversity loss (Wilcove and Koh 2010; Vijay et al. 2016) and global warming (Reijnders and Huijbregts 2008; Goldstein 2015). Palm oil expansion into forested areas is closely linked to the devastating forest and peat fires that have ravaged Indonesia repeatedly over the past decades (Varkkey 2015). Further ecological impacts are caused by herbicides, pesticides and chemical fertilizers which pollute soils, rivers and groundwater.

Studies foregrounding social concerns demonstrate that oil palm is not automatically pro-poor (e.g. Li 2015; Elmhirst et al. 2017). While it has brought prosperity for some, it has (re)produced poverty for others—depending on the specific modes of incorporation into the oil palm industry. ‘Enthusiasm’ for oil palm (Rist, Feintrenie and Levang 2010; Rival and Levang 2014) is greatest among local entrepreneurs who can establish their own small or mid-size oil palm plantations.

Palm oil landscapes are dominated by ecologically problematic large scale monoculture plantations. Photo: Mill and plantations in Sabah, Malaysia © Oliver Pye

However, most oil palms (approximately 60%) are grown by private and state-owned companies in large-scale monocrop plantations, which offer jobs for a small number of permanent employees while the large majority consists of casual workers (Li 2015, 2017) who often work under highly insecure and precarious working conditions (Pye et al. 2012).

Indigenous peoples, who live in the areas where palm oil plantations are established, are mostly poorly informed and rarely given a chance to participate in oil palm development in a meaningful way. Instead, they often suffer from the effects of nontransparent land clearing, water pollution, and the loss of their land, which undermines their economic self-sufficiency. This leads to numerous cases of resistance and protracted conflicts (Colchester et al. 2006, Potter 2009; McCarthy 2010; Haug 2014).

Schemes coordinated by the palm oil industry itself to address these concerns, such as the RSPO, remain weak, as the recent forest fires and haze across Southeast Asia have demonstrated. This shows the need for a more fundamental social-ecological transformation of the industry, that places a higher value on the wellbeing of people and the environment and that is designed for the long-term future.


Conflicts (perceived and real) between Labour and the Environmental Justice Movement in the Palm Oil Sector

Environmentalists, trade unionists and indigenous rights activists fight against the negative ecological and social consequences of palm oil expansion in Indonesia, but they address different problems and work towards different goals. While environmentalists focus primarily on environmental justice issues and work to prevent further expansion of oil palm plantations, trade unionists demand better working conditions and adequate pay for plantation workers.

The palm oil industry has become a prominent global issue for environmentalists concerned with deforestation, biodiversity loss and climate change. In contrast, worker rights violations, seem to be the last issue to emerge in the palm oil industry. In the last five years, increasing documentation has found child labor, forced labor, poor working and living conditions, cheap wages and union busting to be prevalent conditions in the sector (Amnesty International 2016). Palm oil workers demand fair wages, freedom of association and better working and living conditions from the palm oil companies that employ them.

Indigenous rights activists, on the other hand, demand above all the recognition of indigenous land rights, while different views prevail with regard to oil palms. While some indigenous communities reject oil palms, others are quite interested in integrating them into their economic portfolio. Indigenous resistance to oil palm should thus not be simply understood as the wish to maintain a traditional lifestyle, but also about “struggles of inclusion and the terms of this inclusion.” (Eilenberg 2015: 149)

The palm oil industry is plagued by land conflicts. Photo: Indigenous farmers block a road to a palm oil plantation and ritually spill pig’s blood in West Kalimantan, Indonesia © Irendra Radjawali

Indigenous and local communities often break into conflict with the company on the frontline as they attempt to reclaim their land or stop company operations. An example of this can be seen at Kinipan in Central Kalimantan where a conflict between an indigenous Dayak community with a palm oil company led to the arrest of their chief, Effendi Buhing (Bernie 2020). The Kinipan case is also an example of the alliance between indigenous, land rights and environmental groups such as Walhi, AMAN and Konsorsium Pembaruan Agraria that have all come to support the case.

There are many examples where the environment versus jobs debate has played out in the palm oil industry in Indonesia and Malaysia. In contrast to indigenous and local communities that depend on the forest and their land, many palm oil workers live in isolation in plantation saturated areas. Because of limited livelihood alternatives, they ultimately depend on the palm oil plantation for their survival. It is this dependency, the tie between the workers’ livelihood to the company, that is often perceived as and actually under threat when environmentalists and local communities aim to disrupt and stop company operations. This vulnerability also seems to be used by companies to deploy workers on the frontline to face opposing local groups creating horizontal conflict between workers and local indigenous communities.

In the Kinipan case, during a mediation held by the Indonesian Presidential Staff Office, the palm oil company PT. Sawit Mandiri Lestari brought 20 palm oil workers along to the meeting. The workers used to be Kinipan residents but no longer reside in the village. This created a conflict within the community between those that oppose the plantation development and those who are employed by it.

It is important to note that palm oil workers have diverse backgrounds and can be local peasants or landless farmers, domestic and international migrants or from local working class families. In Indonesia, domestic migrant workers from South Sulawesi, NTT, and Nias as well as Javanese transmigrants usually outnumber the local workforce. In Malaysia, over 80% of plantation workers are from abroad, predominantly from Indonesia.

These different experiences and relationships to land and local communities inform workers’ perspectives in different and complicated ways. The workers are not only alienated from the land, but also from the indigenous local communities. The fact that workers live in isolation in housing facilities in the plantation limits the social interaction with the communities—which is essential in building a sense of solidarity— living on the outskirts of the plantation. Workers are also fragmented amongst themselves and often identify firstly via groups based on their own ethnicity.

This could explain why the workers would have no interest but be on the side with the company when there is a land dispute with the communities—or criticism of environmental destruction. Losing their job – the very reason for their migration – would mean the workers have to return to their hometown far away, where they have no means of survival.

Companies try to incorporate workers and unions into the narratives they use to discredit land rights and environmental activists by portraying NGOs as staging ‘black’ campaigns against Indonesian industry with the help of foreign powers. In response to a series of Greenpeace’s direct actions against dirty palm oil in 2018, for example, the South Sumatra Employers’ Association of Indonesia (APINDO) released a joint statement together with three trade unions condemning the action as ‘black campaign’ that threatened the lives of 17.5 million palm oil workers (Amri 2018).[ii]

This coordinated messaging and high-profile coverage may give the impression of a larger divide than actually exists on the ground. There are also cases of intersectional solidarity between workers, local communities and environmentalists (Karokaro 2020). Although workers and indigenous communities may have contradictory immediate interests—job preservation vs. land-ownership – both share the same structural condition of being alienated from the land on which they actually live. Workers—and migrants—are those who have long been deprived of their land and have nothing but their own labor to sell. On the other hand, indigenous communities could potentially become landless workers if their land is seized—via force or deception—by the company. In many cases, people from local communities work for the company too.

In the case of Jambi (Yayasan Keadilan Rakyat), farmers who were recently dispossessed of their land and forced to find income by working as daily labourers on other peoples’ farms and industrial plantations are much more sympathetic to local communities’ fight for their land. In Pondok Damar village in Central Kalimantan, the local community – in alliance with the workers – could win back their land from the company in 2017. This victory was possible because the majority of the workers are members of Pondok Damar village community who shared the same history and relation to the land. A similar successful reclaiming action by workers and peasants took place in Isulan, in Sultan Kudarat province of the Philippines.

The social transformation that occurs in palm oil plantation areas creates intersecting and fluid identities between indigenous communities, farmers and workers. Local indigenous communities and farmers, for example, are often employed as workers on the plantation and promised oil palm smallholdings in exchange for giving up their land rights to the company. Temporarily employed palm oil workers often find work on smallholder farms nearby the plantation to get additional income. Many palm oil workers who migrated from their home country were also, until recently, farmers. These identities do not fit neatly within one category. In some cases, a worker can be indigenous and a farmer all at the same time, and vice versa. Centering the shared impact of plantation development on rural communities will be critical to overcome the perceived and real conflict forged by decades of palm oil industry domination and to build a collective and just vision for the future.

Part-2: Mosaic Landscapes as a Transformative Vision for the Palm Oil Industry – Land Rights and Ecology

[i] The authors are scholars and activists collaborating in the network Transnational Palm Oil Labour Solidarity (TPOLS). The ideas in the paper developed in dialogue with workers, trade unionists, feminists and environmental justice activists working on the palm oil industry. In particular, interviews with the following members of TPOLS were conducted: Daisy Arago (CTUHR, Center for Trade Union and Human Rights, the Philippines), Aurelio Estrada (UMA, Federation of Agricultural Workers, the Philippines), Yuyun Harmono (WALHI, Friends of the Earth Indonesia), Mathias (Serikat Pekerja Nasional/ National Labour Union, Indonesia), Supono (Serikat Buruh Perkebunan Indonesia/ Indonesian Plantation Workers Union), Triana Kurnia Wardani (SERUNI, Serikat Perempuan Indonesia / Indonesian Women’s Organization), Wayan Sutomo (AGRA Central Kalimantan), Hotler Zidane (Koalisi Buruh Sawit/Palmoil Workers Coalition, Indonesia). The paper is not an official position of TPOLS but a contribution to an ongoing debate on Just Transition in the Palm Oil industry.

[ii] One of the unions (KASBI) later withdrew their name from the statement. Similar pro-industry positioning by unions has also taken place in the pulp and paper industry. Industrial pulp plantation workers in Riau, for example, came to the defense of PT. Riau Andalas Pulp and Paper when a new environmental regulation stipulated a reduction in company concession areas that are operating on fire prone and carbon rich peatland. Statements from unions claimed their jobs are at stake and that scaling down the concession will result in mass layoffs. A coalition of labor unions also came out to defend the industrial pulp plantation Toba Pulp Lestari in North Sumatra in reaction to local indigenous community demands to shut down the company over land grabbing and environmental pollution issues (Arumingtyas 2017; Indriani and Susanti 2017; Pemerintah Provinsi Riau 2017; Anon 2015; Diputri 2015)

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