Substandard conditions keep plantation workers in poverty

Apriadi Gunawan and Ridwan Max Sijabat, The Jakarta Post, Medan, North Sumatra

The government has not yet tended to poor labor conditions at state-owned oil palm plantations in North Sumatra, leaving the majority of workers underpaid and uninsured.

The situation is lamentable, as most people working at oil palm plantations live in poverty while the plantations -- almost as large as the Malay peninsula -- comprise one of the greatest sources of non-oil and gas revenues for the provincial and central governments.

Thousands of workers employed at state-owned plantation PT Nusantara II in Limau Mukur, Tanjung Morawa subdistrict, are paid a mere Rp 315,000 (US$37) monthly.

A majority of plantation workers are permanent employees and have worked for the company between 15 to 25 years, but they are underpaid, with a minority of workers receiving pay on a daily basis but far below the minimum wage of the province.

Company shuttles to and from the workplace are provided, but most workers have been allotted substandard company housing.

"The strangest thing is that no career advancement has been made available to low-ranking workers, as professional development schemes are implemented only for middle- and high- ranking employees. This system has only served to keep the lives of low-ranking workers and their families in dire poverty," Soetarto, a labor union activist at the plantation, told The Jakarta Post.

Soetarto said the management did not acknowledge him nor dozens of other workers who had been at the plantation since its establishment at its 25th anniversary in 2003.

The workers also said most had yet to be insured under the national social security scheme. Each time they requested the compulsory insurance, the management rebuffed them with many reasons as to why they could not meet the demand.

"Only a few workers know about the social security program, and while the company has provided medical services for sick workers and their families at nearby provincial health clinics, workers entering retirement are only given severance pay, but no pensions," he said.

Aufa Azis Chan, head of the North Sumatra branch office of state-owned workers insurance firm PT Jamsostek, confirmed that a majority of low-ranking workers at state-owned rubber and oil palm plantations were not yet members of its social security program.

"There are three big state-owned oil palm plantations in the province -- PTP Nusantara IV in Simalungun regency, PTP Nusantara II in Tanjung Morawa regency and PTP Nusantara III in Langkat regency -- employing more than 10,000 workers together, but most are not members of the obligatory basic insurance plan," he said.

He said Jamsostek had taken a persuasive approach to the managements of the plantations to insure their workers.

"If a persuasive approach fails, we will ask the appropriate authorities for assistance in enforcing Law No. 3/1992 on social security," he said.

He said weak enforcement of the law had contributed to the large number of workers who were not registered with Jamsostek.

However, he conceded that many plantations in the province had been facing financial problems following the rampant poaching of oil palm fruits and unchecked illegal occupation of plantation land during the transitional reform period in 1998. Still, he added, this was no excuse for the state companies to provide workers social security, as the companies had booked high annual profits in the years before the reform era.

Deputy Chairman of the North Sumatra provincial legislature Serta Ginting called on the central government to use its authority to demand that the plantations improve the poor labor conditions, because the provincial administration had no power to do so.

"The state-owned plantations, which fall under the forestry ministry and the office of the state minister for state enterprises, should rectify the poor labor condition before it gets worse," he said.

Ginting, who also chairs the Nusantara Plantation Labor Union Federation, said 31,000 of 80,000 workers at state-owned oil palm plantations in the province were underpaid and lived in inhumane company housing.

If the plantations were unable to pay their workers at least the provincial minimum wage, he suggested the central government to divest the plantations to foreign companies.