Sime Darby Plantation refers to Oxfam’s 14 October 2011 press release titled “Oxfam calls on palm oil company to redress violations of communities’ rights in Indonesia”.
On 22 September 2011, Oxfam had released a report titled “Land and Power - the growing scandal surrounding the new wave of investments in land” in which certain serious but erroneous allegations are levelled against Sime Darby Plantation. On the same day, vide email and letter to the Sime Darby Group’s President & Group Chief Executive, Oxfam requested for a dialogue between the two organisations to discuss the contents of the report. A conference call was held on 26 September 2011 between officials of Oxfam, Sime Darby Group and Sime Darby Plantation.
Sime Darby Plantation, a wholly owned subsidiary of the Sime Darby Group, is the world’s largest producer of certified sustainable palm oil. As a responsible player in the agriculture industry, Sime Darby Plantation believes in constructive dialogue with all its stakeholders. Both Sime Darby Plantation and Oxfam have since been in regular communication on the allegations contained in the report. Sime Darby Plantation and Oxfam had agreed to work together constructively to expedite resolution for actual issues on the ground. Sime Darby Plantation had also appraised Oxfam that management is always aware of the issues on the ground and that relevant stakeholders had already been engaged. It was further communicated that resolution is anticipated.
However, in its 14 October press release, Oxfam states, amongst others, that Sime Darby Plantation has yet to take action to redress the situation, and that it ignores the rights and needs of local peoples. This press release is mischievous and Oxfam’s intentions in publishing a release, which it knows to be largely inaccurate, must be questioned. Oxfam’s conduct has been unprofessional and unbecoming of an organisation that claims to uphold the principles of human rights and fights for justice for the poor. Sime Darby Plantation has since asked Oxfam to make a public apology and retract its statement. Oxfam has offered an explanation vide letter dated 19 October 2011, although a public apology has not been forthcoming.
The facts of the situation
Sime Darby Plantation respects the rule of law in all the countries within which it operates. The company has strict internal policies in place and a code of business conduct that has zero tolerance for non-compliance with national and company standards.
Sime Darby Plantation is committed to operational sustainability as is evidenced by its adherence and commitment to the requirements of the Roundtable on Sustainable Palm Oil (RSPO). Sime Darby Plantation has committed to have all its strategic operating units audited for certification by the end of 2011.
1. The Plasma scheme
The distribution of Plasma land is agreed by musyawarah or joint consultation with local governments and Kooperasi Unit Desa (KUD – local cooperatives representing the landowners and plasma participants). The list of participants is developed by the local government and KUDs. In the PT. MAS area, the company is obliged under an agreement with the local government to develop a stipulated percentage of land under the Inti (company) and Plasma (community) scheme for small landowners in the area. The subsequent agreement with the landowners in the PT. MAS area was to provide proportional hectarage for Inti and Plasma based on the amount of land each landowner offers the company. In PT. MAS, this works out to 26.7% of land for Plasma, more than the agreed allotment with the local government. It must be noted that the obligation is proportional and in terms of percentage, not in absolute numbers.
There are about 3,000 Kepala Keluarga (KK - Heads of Families) in the PT. MAS area, of which 1,452 KK have agreed to participate in the PT. MAS Plasma scheme. The others have either opted to join other nearby Plasma schemes or remain on their own.
Most importantly it must be noted that the lives of 1,452 families have been positively impacted by the PT. MAS Plasma scheme.
Sime Darby Plantation has been actively engaged with the communities in the PT. MAS area since 2006 and is working towards full resolution of residual issues. Sime Darby Plantation had also engaged the services of independent external consultants Lingkar Komunitas Sawit, to assist in community engagement and to provide independent assessments of the situation in the area.
The facts for PT. MAS are condensed below:
2. Free, Prior & Informed Consent (FPIC) of landowners
Sime Darby Plantation does not develop land without the necessary FPICs and where appropriate, compensation is paid out to landowners whose land is being developed.
In PT. MAS, all areas developed have the FPIC of the landowners and compensation was paid out to the owners for crop trees that were in the area. This is fully documented.
3. Workers’ pay and compensation
In the area in question, the workers’ salaries are based on the mandatory Minimum Provincial Wage on Agriculture Sector as set by the local government. The claim that Sime Darby Plantation underpays workers is untrue. Sime Darby Plantation also pays out an additional month’s salary to workers before the Lebaran or Eid celebration, which is provided for under Indonesian law.
As in any business, workers who work longer than their normal working hours are paid overtime. This too is based on a structure agreed by the government and the unions through a collective agreement.
4. Worker facilities and benefits
Sime Darby Plantation prides itself in being a caring employer, and one that looks out for the welfare of its employees globally.
At PT. MAS, among facilities that have been or are currently being constructed include workers' housing, children’s crèches, clinics and religious houses. The company also provides transport for schoolchildren getting to and from school to ensure their safety.
The development of PT. MAS also necessitated the construction of infrastructure. Road access has been put in place in the area and has benefitted not just our workers, but also locals in providing a safer and more tenable route for their commute, compared to how it was previously.
Work on developing infrastructure obviously takes time, and the company continues to add and improve amenities provided in PT. MAS and in all its estates.
Sime Darby Plantation will continue to work and engage directly with the communities involved in PT. MAS and any area in which the company operates, as it has in the past. In PT. MAS, Sime Darby Plantation is confident of resolving issues amicably. While it may take time, Sime Darby Plantation remains committed to achieving resolution on all issues.
Sime Darby Plantation believes in constructive dialogue with its stakeholders and will continue to engage with relevant communities, officials and organisations that represent the needs of the people honestly and professionally.