CRITERIA DEVELOPMENT SOCIAL COMPONENT (4 5 October 2004) Component 9: Managing Social Impacts Criterion 9.1. An assessment of the social impacts of proposed operations is carried out and the results are taken into account in management planning and operational procedures. Consider major change there need to be separate criterion for plantation establishment, existing and new ones. The emphasis of the current criterion is very much on existing plantation. Need to consider the whole issue of both positive and negative impact, the whole issue of land rights, term and conditions in land acquisition, representation of community using the standard of Free, Prior and Informed Consent for decision that may affect local people (including indigenous people) Notes from the RSPO discussion: In general agree with the CWG view with the following emphasis Need to be clearly defined what laws to be used in the issue of land acquisition for example, whether it would be state or customary laws; Social impact assessment (SIA) beyond the plantation/environmental impact should be defined further. Terms and condition for land acquisition should be clearly defined for the people affected by the plantation establishment. In case of nucleus plantation scheme involving the smallholding planters a clear profit sharing mechanism should be clearly defined prior to the establishment of partnership with big corporates/companies. There is proposition that the social criteria in the new establishment component should be put under this social component since the issue is more relevant. This will need further review and discussion. Criterion 9.2. There is an effective method for communication and consultation with local communities and other affected or interested parties Consider minor change that has major implication need to reflect principles of transparency and openness and participation of local people through two ways interactive communication not only from companies to community but vice versa, consider the existence/formation of multi-stake holders forum. Ylacsana/RT2-CWG Social Component/5 October 2004-Jakarta 1
In general the floor is in agreement with the CWG s view. Proposed to use similar forum developed by Malaysian growers as means for communication Joint Consultative Committee that could be useful for carrying out the SIA. Communication should be conducted effectively with local people/community (in the principle of transparency and openness) considering the psychological factors of the community, especially in the establishment of new plantation but also in the operation of the existing ones. Criterion 9.3. There is a documented system for dealing with complaints and grievances which is implemented and effective. Consider major changes it should base on collective voice that reflects that the right to organize and documents not only complaints but also the issue of negotiation and bargaining in the whole stage of establishment. General agreement on CWG views. Guidance keys for further consideration and development of criteria: Adopt the musyawarah (consensus Indonesian term) mechanism JCC can be used to spell out the procedures to be followed involving employees, smallholders, interest groups and community outside the plantation. Need to define the term of local people (whether it applies to smallholders, people around the plantation, indigenous people, transmigrant, etc.) Looking at the possibility to use the existing local mechanism, such as village cooperative in Indonesia case to negotiate and bargain and file complaints over compensation and other terms affected the community. Component 10: Workers pay and condition Criterion 10.1. All workers have acceptable pay and conditions Consider major revision Define acceptable pay and conditions, more emphasis on the concept of a living wage instead of minimum standard of wage, refer to ILO convention on Plantation Workers. This issue need to be clarified further. Ylacsana/RT2-CWG Social Component/5 October 2004-Jakarta 2
Respect the right to organize and collective bargaining. Consider the whole issues of non-discriminative principle and equal remuneration, just employment for migrant workers, no forced labor all these may well be placed into the new criterion for this component should there is no appropriate wording could be defined. (10.3?) There is general agreement on CWG views specific proposition includes: The criterion need to be separated each for pay and condition because it will lay out a significant guidance that have different terms and may cover the wider range of issues. This is in line with CWG proposition to have another criterion added. Agree that the issue of wage needs to be clarified clearly both Malaysian and Indonesian planters differ in looking at the basic standard for payment. Living wage may well be more acceptable than regional/local minimum wage standard but need to be explored further how applicable this would be and whether there is legal framework that can be used as reference. Criterion 10.2. Child labour is not used unless children are involved as part of small family owned and run enterprises and under adult supervision or an integrated education programme. CWG Discussion: No change to the statement in principle but need to make sure that the minimum age clearly defined whether it follows the ILO convention (not less than 15-18 years) and also adhere to the convention of children rights. Agree with CWG view Need to have a clear guidance to protect children working in the palm oil business; proposed to add more to the criterion clarifies clear minimum age range and definite working hours. Elaboration of terms and condition for children working in the company refer to the existing laws and international convention. For component 10 the proposition is to make it into 3 criterions: 10.1. Workers pay; 10.2. Workers condition; 10.3. child labour Component 11. Health and safety Criterion 11.1. There is appropriate implementation of health and safety requirements Consider major changes/revision - needs amplifying of appropriate and requirements especially related to safety and health in agriculture. What constitutes appropriate implementation? What standards we use? What Ylacsana/RT2-CWG Social Component/5 October 2004-Jakarta 3
requirements? Need to be specified and spelled out clearly to avoid confusion and vague ambiguous interpretation. There is a big question on how the producers ensure that this issue of H&S can be monitored up and down the line concerning responsible advertisement and marketing of products/equipment promoted by suppliers be it technology or chemical compounds. General agreement on CWG views. Proposed to use occupational health and safety instead of just H&S Issues raised by supplier on their accountability related to H&S emphasized the main responsibility of the growers to make sure that all precautions attached to the products observed and applied to the workers properly. Refer to guide keys: Adoption of Agrochemical Code of Conduct (FAO Code of Conduct for the sale and distribution of agrochemical products 2002, revision) It is important to have a proper training and education pre, during and post events in the plantation to minimize the hazardous impact Component 12. Supporting local communities Criterion 12.1. Plantations and mills deal fairly with smallholders and other local businesses CWG discussions: Consider major revision clarify FAIRLY. Need to consider strongly how smallholders protected in free market, ensuring that they have access to information, access to mills and storage, fair price/purchasing schemes that observes grading flexibility and quality unevenness, tenure security, equal treatment for women involved in supply chain, respect the right to organize and representation in bargaining, support the transportation, etc. In general all participants agree with CWG views on criterion. Issues for further discussion: Transparency is very important; plantations and mills have to deal with smallholders and local business in transparent manner, open space for negotiation and agreement over terms and conditions. Agree that grading flexibility need to be developed to ensure that smallholders still benefit from partnership. The demand for good quality product should not deter companies to invest in capacity building. Responsible and good plantation companies do assist communities, workers and smallholders such practices need to be elaborated and shared to support the good criterion. How much the Ylacsana/RT2-CWG Social Component/5 October 2004-Jakarta 4
company can afford to support will very much on how high the standard they demand from the smallholders and local businesses. Criterion 12.2. Plantations and mills contribute to local development whenever possible Consider major change Need to clarify WHENEVER POSSIBLE, what does it means? Have to adhere to the principles of transparency, openness and participation. Local communities should have a right to negotiate and identify their own priorities and needs based as well on the different needs of men and women. Have to refer to the economic, social and cultural rights where both parties base decision for the most appropriate intervention to support local development. Notes from the RSPO discussion: Participants are in general agreement with CWG view. The only argument raised by Malaysian company derived from misunderstanding on local development concept whether it is supporting government or communities. Component 13. Training Criterion 13.1. All staff and workers are adequately trained and competent Minor revision required need to include smallholders. If companies expect smallholders to adhere to standard quality they need to invest in the efforts for improving smallholders capacity. Notes from the RSPO discussion: Participants are in agreement with the CWG views. Competent or qualified/capable? General conclusion from the RSPO discussion on social component: For the clarity of the criteria and avoid confusion as well as misunderstanding and interpretation of the component it is important to have clear definition of various terms and concept used in the criteria. This includes: - Appropriate - Requirement - Adequate - Fairly - Customary rights - Local people/communities - Smallholders Ylacsana/RT2-CWG Social Component/5 October 2004-Jakarta 5
- Nucleus farmers/plasma plantation (in Indonesia operation) - Whenever possible - Standard guideline to be used - Legal framework to be used as guidance local, national or international Criteria has to be simple yet comprehensive and clear for all to follow. The issue of mandatory and voluntary needs to be discussed further. Monitoring and evaluation need to be inherent part to ensure that the criteria followed and applied. Jakarta, 5 October 2004 Prepared by Yanti T.Lacsana (Oxfam GB) In collaboration with: Rudy Lumuru and Norman (Sawitwatch) Marcus Colchester (Forest for People/Sawitwatch) Mr. MK.Chandran (MPOA) Mr.Ramli (MPOA) Ylacsana/RT2-CWG Social Component/5 October 2004-Jakarta 6