Precarious Working Conditions on Plantation Owned by Belgian Company SIPEF

by | Jul 23, 2020 | Study, Working Condition

After years of working for the palm oil plantation PT. Agro Kati Lama (AKL), Andi (36 years) was suddenly dismissed by the company management in December last year.
When he was recruited, Andi worked as a daily casual worker (Buruh Harian Lepas/BHL), a work status that means he gets paid daily based on the number of days he would work, until November 2017. Later, Andi was promoted to become a contractual harvest worker (buruh kontrak) with a one year of contract—with another year of contract extension—until November 2019. In August 2019, Andi was transferred to become a supervisor of a road construction project.
Without notice from the company, Andi along with around 200 other harvest workers were suddenly demoted from being contract workers to daily casual workers or ‘buruh harian lepas’ (BHL). The employment relationship between the workers and PT AKL was also transferred to the CV Terang Jaya, a labor outsourcing agency. Initially the company said that his employment as a casual worker was temporary and only valid for one month from November to December 2019.
However, Andi was not reemployed or reappointed as a contract worker after his contract ended. “I have come to the management office twice to clarify my employment status. The company said that I was no longer employed, either as a harvester or as a BHL. The company argues there is no more work for me,” said Andi.
Andi is not alone. The majority of PT. AKL workers are in precarious working conditions. During December 2017 to October 2019, an investigation into the working conditions on PT. Agro Kati Lama, a subsidiary of SIPEF group, a transnational company from Belgium, found that PT. AKL have allegedly committed serious violations of human rights by employing workers in precarious conditions.[1]
The Benefitting Company
SIPEF is a Belgian transnational company based in Schoten and registered with Euronext Brussels. SIPEF operates agro-industry business in the production of palm oil products, namely fresh fruit bunches (FFB), crude palm oil (CPO), palm kernel (PK), crude palm kernel oil (CPK), rubber and tea. SIPEF’s subsidiaries are located in Indonesia, Papua New Guinea and Ivory Coast with a total workforce of more than 21,000 people.[2]
In Indonesia, SIPEF operates their palm oil plantations in North Sumatra (Kerasaan, Eastern Sumatra, Citra Sawit Mandiri, Toton Usaha Mandiri, Umbu Mas Wisesa and Tolan Tiga), in South Sumatra (Agro Kati Lama, Agro Rawas, Agro Muara Rupit and Dendymarker Indah Lestari), and in Bengkulu (Agro Muko and Mukomuko Agro Sejahtera). Overall, SIPEF manages 29 palm oil estates and 6 palm oil mills with a total area of ​​57,481 hectares.[3]
SIPEF sells its products mainly for the European market for food and biofuel products. Nestle in this case is believed to be one of the SIPEF buyers. Looking at the location of PT. AKL plantation in Musi Rawas, it is likely that the palm fruit bunches produced are supplied to the Dendymarker Indahlestari Palm Oil Mill (PKS), which is also owned by SIPEF.[4]Dendymarker Indahlestari mill itself is included in Nestle’s list of palm oil suppliers.[5]

SIPEF Group network in Indonesia. Source:

PT AKL began its operations in the Musi Rawas area, South Sumatra in 2011. Based on the location permit, PT AKL has 10,500 hectares of land.[6]The land was obtained from the buying and selling process with the local community. PT AKL began cultivating the land in 2013 and as of October 2019, the total planted area of PT AKL has reached more than 4,000 hectares with a total of 1,178 workers employed.[7]PT AKL consists of two plantation areas called the North Estate and South Estate.
 Working Conditions on AKL’s Palm Oil Plantations
Uncertain and insecure employment status
PT. AKL employs the majority of its workers in non-permanent status for almost all types of core work, especially for jobs such as maintenance, fruit truck drivers and driver’s helpers. In both estates, hundreds of men and women work under the status of daily casual workers (BHL).
Endang (35 years) for example, has been working as a BHL worker for six years. She is assigned with the task to maintain the palm oil tree by pruning wild grasses, applying fertilizer, and spraying toxic pesticides.
Her status as a non-permanent worker has meant low and uncertain income. Casual workers are paid based on the number of working days in a month. They mostly work less than 15 days a month.
“At most, I get a salary of IDR. 1,600,000 (USD 110). But that is a rare occasion. Normally, I earn around IDR 1,400,000 (USD 97),” said Endang about her monthly wages. The wages received by Endang and hundreds of other BHL workers amounted to less than half the statutory minimum wage applied in Musi Rawas Regency in 2020 (IDR 3,195,273 or USD 221).
BHL workers are not directly employed by PT AKL but are instead employed by six outsourcing agencies, namely CV Belua Mandiri, CV Terang Jaya, CV Dua Saudara, CV Tomi Lenza, CV Afnol Mandiri and CV Mika Lestari.[8]  Many workers have been working for more than five years under these pay conditions, as experienced by Endang and hundreds of other BHL workers.
Consequently, the employment relationship—including the responsibility in fulfilling workers’ rights—is also outsourced to the labor contractors.
The employment status under the contracting company is not clear as there is no written contract. The salary slip payment is only written on a piece of paper without any indication as to the identity of the employer, effectively concealing the PT AKL’s relationship to these workers.

Salary slip of BHL workers written on a piece of paper. Source: Field documentation

Based on information obtained in the investigation process, BHL workers were required to sign a statement not to demand BPJS health and employment insurance, religious holiday allowance (THR) and treatment cost in the event of a work accident, all of which are fundamental workers’ rights protected under Indonesian Labor Laws.

The company does not only employ casual workers, but also workers with short term contracts. Similar to BHL workers, the contract workers also tend to perform maintenance tasks. The only difference is that contract workers have a direct relationship with the company.
Recently, around 200 harvest workers, including Andi, who were initially contract workers were demoted to casual workers. The workers were outsourced to the labor agency to perform maintenance tasks. Some other ex-harvest workers are still employed as contract workers, but transferred to the maintenance section.
According to Andi, the demotion of employment status was mainly experienced by harvesters aged over 40 years. They are the first generation of harvesters who have been working since the beginning of planting in 2013. Harvest workers who were transferred to the maintenance section with non-permanent status were replaced by harvesters under the age of 40.
The workers remain as contract workers even though they have been extending their contract over the years. This practice has violated the labor standar, where the labor law requires the company to promote workers to become permanent when the workers have been continuously extending their contract for more than two years.
 Hazardous workplace
According to the workers, there are at least three different kinds of herbicides used in the plantation, namely Garlon 670 EC, SMART 486 SL, and Metsulindo. When palm oil trees require herbicides for its maintenance cycle, Endang and other BHL spray workers have to spray 280 palm oil trees with a total of seven caps of herbicides, which equals to 105 litres or 140 kg, in a day,

When the spray workers are doing their task, they are not protected with adequate personal protective equipment (PPE). The company does provide a plain cloth mask, but it does not protect workers from the chemicals exposures. Not only are the PPE inadequate, the other PPE, such gloves, goggles, aprons, and face masks, are not provided regularly.
“Usually, we get PPE once a year. The company will provide PPE, but only if we keep demanding it to our supervisor or field assistant,” said Endang. As the provision of tPPE is not regular, most workers have to spend their own money to buy PPE. “We pay by ourselves. I use toy goggles,” she added.
The workers often complain about how the heavy workload makes them feel uncomfortable to wear PPE. In the humid environment in the plantation, the goggleseasily fog thus affecting the workers’ vision and ability to work. The workers also experience difficulty in breathing when they use the plain cloth mask, while at the same time they are also required to meet the target with heavy workload.
When the palm oil tree maintenance cycle turns into fertilization phase, the BHL workers are targeted to apply 500 kg of fertilizers in a day. Astuti (45 years old), another BHL worker, complains about eye and skin irritation whenever she finishes applying fertilizers. “Our eyes and hands feel sore if the fertilizers are exposed to us,” Astuti said. “I had eye sore for two days because of irritation.”
Astuti did complain about her health to the field assistant. When she asked for irritation medicine, “the assistant told me that he will give me the medicine, but there is nothing until now,” she said.
Whenever workers get injured or have other health complaints, the company tends to divert their responsibility in providing health treatment and recovery of BHL workers to the outsourcing agency. In 2014, Endang had an accident. A toxic herbicide was accidentally spurted from the sprayer nozzle to her face and entered her mouth.
“I kept vomiting, my head felt dizzy and I felt weak,” she said while remembering her terrible experience. However, according to Endang, there was no compensation paid by the company, but a can of milk. Endang had to pay for her own treatment at the local clinic.
Based on the interview with workers, there are at least 10 documented work accidents in the AKL plantation between 2014 and 2019:
1.      In 2014, one women worker was exposed to herbicide
2.      In 2016, two women workers had work accidents
3.      In 2017, two spray workers were exposed to chemicals.
a.       Sumarni, a BHL spray worker hired by CV Terang Jaya, had a work accident in 2017. Her body burnt because of direct exposure to herbicides (Garlon and SMART). The company only paid a compensation of IDR 50.000 (USD 3.47) for health treatment costs.
b.      Mimin, a BHL spray worker hired by CV Dua Saudara, had a work accident in 2017 where she was poisoned by herbicides. The outsourcing agency was not responsible for workers’ treatment and recovery.
4.      In 2018, one contract workers had a work accident falling from a truck while loading fruits. The worker suffered a back injury and received medical treatment at the local clinic. The field assistant provides a medical treatment fee of IDR 500.000 (USD 34.30).
5.      In 2019, one BHL spray worker was exposed to the herbicide Garlon. The company through its Field Assistant only provided IDR 100.000 for the treatment fee, and tworker had to pay by himself for the remaining cost.
The company had conducted medical examinations for the workers who are directly employed by the company, including the contract maintenance workers—who are vulnerable to chemical exposures—but it excluded BHL workers. Nevertheless, according to the contract workers, even they did not receive the written results of the examination.
The company also provides health clinics that can be accessed by every worker. However, most of the workers feel that the health services are not trustworthy and seem to be ineffective. In addition, the clinic is located inside the housing area of the contractual and permanent workers, whereas BHL workers who live around the plantation area have difficulty accessing the clinic due to the long distance from their house.

BHL women workers at AKL plantation. Source: field documentation

The SIPEF and AKL take benefits from the unemployment
Palm oil plantations elsewhere has been reported for practicing—and benefitting from—flexible labour employment.[9]This kind of flexibility can be seen from the practice of recruitment under the temporary status or fixed period of time (as expressed by the status of BHL and contract workers) based on the company’s need of labor.
In order to maintain its supply of labor, the company cooperates with the labour outsourcing agency or labour contractor to outsource the relation of employment.
The Indonesian Labor Law (Act 13 of 2003) does regulate temporary employment—called contractual and outsource workers—based on several criteria. Under Article 59, the contractual employment is only allowed for particular tasks that can be performed and finished within a certain period of time.
In addition, the Manpower Ministerial Decree No. 100 in 2004 on the provision of contractual employment further regulates on this matter. Under Article 10 on the provision of casual employment, it is required that workers who have been engaged in 21 days of employment for three consecutive months must be promoted to permanent workers.
On the other hand, Article 65 and 66 also requires that labor outsourcing is only allowed for non-core production tasks.
Based on our correspondence with the company, SIPEF Group made an excuse that the practice of employing temporary workers (both casual and contractual workers) is allowed by the regulation.
From the company’s perspective, the core production task in the palm oil industry covers only harvest and mill workers. Meanwhile, the maintenance workers are considered to be supporting and seasonal in-nature based on the maintenance cycle. According to company’s reply to the Transnastional Palm Oil Labor Solidarity (TPOLS) Network’s complaint letter,
“The core work is legally defined as only the harvesting and processing operation, therefore for work like spraying or fertilizer applications, this can be performed by PKWT (contractual) workers.[10]
To the contrary, such practice by the company clearly violate the labor law. Firstly, casual workers are hired through the outsourcing agency. In other words, they are outsource workers that perform the core production tasks in the plantation.
Secondly, maintenance tasks, such chemical spraying and fertilizer application, are part of the core production. Despite there being a maintenance cycle based on the seasonal nature of the palm oil trees, such tasks are performed continuously year round. Without the trees being maintained and applied with fertilizers, the trees would not bear good fruits.
The company claims that they are in compliance with the labor law in terms of employing casual and contract workers. However, such a claim is inconsistent with their own practice of employing workers. In this regard, the harvesting tasks are also based on the cycle of fruit maturation. In other words, almost every task, including harvesting and maintenance, in the palm oil plantations has their intrinsic seasonal nature.
However, only harvest workers are accepted as core-production and hired under permanent status.
Thirdly, there has never been any law or court decision that defines what is a core and non-core work in the palm oil plantation. The claim made by the company that harvest and processing operations are the core works, therefore, has no legal standing. What is actually referred to by the company is only its own business practice.
Fourthly, workers who are employed under casual status have been working for years. This fact also clearly shows that maintenance jobs, performed by casual and contractual workers, are an integral part of palm oil production.
What is not immediately apparent is that the company is actually benefitting from the unemployment problem in Musi Rawas. Based on the company’s response to TPOLS letter, the company argued that the practice of hiring workers under temporary status is considered as the company’s effort to ensure the availability of job opportunities for the local community.
“PT AKL is an important job resource for local workers and the demand for jobs is higher than the current offer. Therefore, to ensure social stability of the area, the company tries to the best of its abilities to provide work to all the workers looking for jobs.”[11]
On the excuse of ‘providing job opportunity’, the company “ensures that no contract and/or casual workers work continuously for over 20 days per month.” What the company does not say is that such practice actually enables the company to effectively avoid its responsibility to promote workers to permanent status.
By considering the stipulation in Article 10 in the Manpower Ministerial Decree described above, the BHL workers such Endang and Astuti who have been working for years should have been promoted as permanent workers many years ago. However, the company’s tactic to avoid employing BHL workers for more than 20 days relieves it from the responsibility to promote casual workers.
This practice of flexible employment and outsourcing is the main problem related to the working conditions in AKL plantation—as in other palm oil plantations elsewhere. The company tends to outsource its responsibility in fulfilling workers’ right to the outsourcing agency.
This is also reflected in the non-payment of religious holiday allowance (called as Tunjangan Hari Raya/ THR in Indonesian terms) for the past two years. The investigation found that 51 BHL workers recruited by CV Belua Mandiri and CV Terang Jaya have not been paid their THR allowance since 2018.[12]
In 2019, this problem recurred, where CV Belua Mandiri and CV Dua Saudara only paid 30% of the total THR allowance that is owed to workers. The AKL company said that the payment of the THR allowance for BHL workers is the responsibility of the outsourcing agency.
The practice of labor outsourcing also affects the freedom of association. The company only recognizes the existence of ‘Serikat Buruh Mandiri’ (SPM/ Independent Trade Union)—which according to the BHL workers, was established by the company management and where the members are only management officers.
While the another union, Serikat Buruh Sawit Sejahtera (SBSS), which independently organizes BHL workers are not recognized by the company. According to the workers, the company argues that the employers of the BHL workers are the outsourcing agency, not the company AKL, despite it being the ultimate beneficiary of their labor.
What the company did not explicitly admit is there is a power imbalance between the company and the workers. In a context where unemployment is rampant and very little alternative sources of livelihood, the workers have no other choice than accepting the terms and conditions of employment set up by the company.
In terms of the daily working targets for example, the company argues that the workers have become accustomed with the targets. Thereby, an amount of 500 kg of fertilizers or 105 litres of herbicides are not considered toiling to workers’ bodies. Workers in this case have no choice other than meeting these targets.
The palm oil industry has been dubbed as providing prosperity and job opportunity for the local community. The fact is that the workers experience precarious and uncertain jobs with meagre wages. “At the beginning, it was said that the company will bring prosperity to our people. But that is not happening. We only work for 10 days. We are very sad,” said Astuti reflecting her life as a plantation worker.
The workers and SBSS union have been trying to engage in dialogue with the company but to no avail. The collective action to file a complaint based on the field investigation and workers’ testimony had been done. The company have also accepted and replied to TPOLS’ letter three times. However, in all replies, the company tends to deny every allegation.
Workers’ rights are an integral part of basic human rights. No rights should be reduced or compromised. Let us support the struggle of AKL workers to improve their working conditions by signing this petition (click here).

[1] The investigation as the basis of this article started from the report and press statement published in several media outlets. These original sources was then followed up when Serikat Buruh Sawit Sejahtera (SBSS) union as the TPOLS network member report their situation to the network. The method of the investigation employs qualitative approach by interviewing the workers and desk research. For the report and press statement, see Ain, “Buruh PT. AKL Tuntut Hak Sebagai Pekerja,” 6 February 2017,, World Rainforest Movement, “Indonesia: Violence against Women Workers in Oil Palm Plantations,” World Rainforest Movement, 30 September 2019,, Indra Nugraha, “Menyoal Nasib Buruh Perkebunan Sawit di Indonesia,” Mongabay 1 May 2019,, ELSAM, “Peringatan Hari Perempuan International 2019: Buruh Sawit Perempuan Menuntut Pemenuhan Hak dan Perlindungan Kerja yang Layak dan Setara,” Lembaga Studi dan Advokasi Masyarakat, 12 March 2019,, and Dewi Agustina, “Lima Tahun tak Terima THR, Buruh Sawit Minta Pemkab Mura Bertindak Tegas,” 7 August 2018,
[3] “SIPEF Annual Report 2018.”, accessed on 16 October 2019.
[4] This is based on the palm oil production cycle, where the newly harvested fruits must be processed to extract the oil within 24 hours to keep the quality of the extracted oil.
[5] “Nestle Supply Chain Disclosure Palm Oil,” publish on April 2020. Source:
[6] PT. Agro Kati Lama, Summary of Planning and Management, January 2012. Retrieved from
[7] Interview with workers
[8] Interview with workers
[9] Johan Saravanamutu, “The Political Economy of Migration and Flexible Labour Regimes: the case of the oil palm industry in Malaysia,” in Oliver Pye and Jayati Bhattacharya (Ed), The Palm Oil Controversy in Southeast Asia, ISEAS–Yusof Ishak Institute, 2012, pp. 120-139.
[10] SIPEF reply to TPOLS letter, 30 April 2020.
[11] SIPEF reply to TPOLS letter, 30 April 2020.
[12] Dewi Agustina, “Lima Tahun tak Terima THR, Buruh Sawit Minta Pemkab Mura Bertindak Tegas,” 7 Agustus 2018,


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