Kuala Lumpur, 9 April 2015 – On 19th March, Finnwatch published a follow-up to its 2014 report analysing the working conditions and labour rights of palm oil workers on four estates belonging to the IOI Group in Malaysia.
The original report alleged that some of IOI Group’s plantations did not comply with RSPO’s certification standard for the production of certified sustainable palm oil, the Principles & Criteria (P&C). Following these allegations, RSPO launched a preliminary investigation at the Bkt Serampang and Bahau Estates, conducted by RSPO Technical Director, Mr. Salahudin Yaacob.
The Finnwatch follow-up report states that the findings of the RSPO’s investigation conflict with the findings of the original report as well as the findings of the separate ISCC investigation into the matter. The report also finds that the RSPO interpretation of key documents in the investigation differs from Finnwatch’s interpretation of the documents.
RSPO is committed to transparency and accountability and welcomes the scrutiny of third parties, including NGOs. RSPO recognizes that concerns of Finnwatch with respect to labour rights on IOI Group plantations are legitimate and is continuing its own investigation into the matter. The relevant certification bodies have been requested to conduct a thorough check of the minimum wage, worker’s accommodation conditions, the agreement of workers’ contracts through labour agencies, and the retention of worker’s passports on the estates in question.
One of IOI Group’s plantations Pamol Kluang Complex was verified in January by the international certification body BSI (the British Standards Institution). This verification has revealed non-compliance in regards to minimum wages of foreign workers involved in piece-rated work. The probationary periods for new employees were as per the “Guideline on the Implementation of The Minimum Wages Order 2012”. Regarding workers accommodation conditions and the retention of workers passports, BSI found that the existing facilities and process are acceptable by the employees.
IOI group, for its part, has taken measures to improve the working conditions on its estates including aligning the starting salary of the migrant workers irrespective of probation period to be same with those completed the probation, removing limitations on the right to organise strike within the legal framework and providing contracts to migrant workers in their own language which is in progress. At the time of the follow-up verification at the Pamol Kluang Complex, the improvement measures had been recently announced and the implementation was in progress. RSPO welcomes IOI Group’s decision and will continue to work with them and all interested parties to ensure full compliance with its Principles & Criteria on certified plantations.
The verification report on the Pamol Kluang Complex is available for download at the bottom of this page. A further investigation in the other IOI Group’s estates involved in the Finnwatch analysis will be carried out in the coming months by Certification Body SGS. Following the conclusion of the verification, RSPO will decide on the course of action to take and issue a further update on the matter.
Notes to Editor:
18% of world's palm oil production is now RSPO certified
The current estimated annual production capacity of RSPO-certified sustainable palm oil is 11.1 million metric tons, approximately 18% of global crude palm oil. Spread over 1.98 million hectares of certified production area, about 49.6% of the world's current RSPO-certified sustainable palm oil production capacity comes from Indonesia, followed by 40.6% from Malaysia, 5.6% from Papua New Guinea and the remaining 4.2% from Solomon Islands, Ivory Coast, Thailand, Guatemala, Ecuador, Brazil, Cambodia and Colombia.
In response to the urgent and pressing global call for sustainably-produced palm oil, the Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004 with the objective of promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders. The seat of the association is in Zurich, Switzerland, while the secretariat is currently based in Kuala Lumpur with satellite offices in Jakarta and London.
RSPO is a not-for-profit association that unites stakeholders from seven sectors of the palm oil industry – oil palm producers, palm oil processors or traders, consumer goods manufacturers, retailers, banks and investors, environmental or nature conservation NGOs and social or developmental NGOs – to develop and implement global standards for sustainable palm oil.
Such multi-stakeholder representation is mirrored in the governance structure of RSPO such that seats in the Executive Board and project-level Working Groups are fairly allocated to each sector. In this way, RSPO lives out the philosophy of the "roundtable" by giving equal rights to each stakeholder group to bring group-specific agendas to the roundtable, facilitating traditionally adversarial stakeholders and business competitors to work together towards a common objective and make decisions by consensus.
Contact for RSPO Secretariat:
European Director of Outreach and Engagement
T: +44 (0)208 282 6069
M: +44 7779 780 737
Acting Communications Director