Labor abuses found at Indonesian palm plantations supplying global companies: Amnesty
- Wall Street rises, buoyed by economic data; Dow sets high
- Twitter (TWTR) 'Takeover Money' Moves On as 'Trump Money' Moves In
- Amazon (AMZN) Could Open Over 2,000 Brick-and Mortar Groceries if Tests Succeed - DJ; Kroger (KR) on Watch
- Buy Any Seasonal Market Weakness Ahead of Year End Rally - Oppenheimer (SPY)
- After-Hours Stock Movers 12/05: (TXMD) (COUP) (BOBE) Higher; (SB) (LXRX) (STWD) Lower (more...)
A farmer harvests palm fruits at a palm plantation in Indonesia's North Sumatra province January 12, 2013. REUTERS/Roni Bintang/File Photo
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
By Eveline Danubrata and Bernadette Christina Munthe
JAKARTA (Reuters) - Global consumer companies, including Unilever, Nestle, Kellogg and Procter & Gamble, have sourced palm oil from Indonesian plantations where labor abuses were uncovered, Amnesty International said on Wednesday.
Children as young as eight worked in "hazardous" conditions at palm plantations run by Singapore-based Wilmar International Ltd and its suppliers on the Indonesian islands of Kalimantan and Sumatra, Amnesty said in a report.
Amnesty, which said it interviewed 120 workers, alleges that many of them worked long hours for low pay and without adequate safety equipment. The palm oil from these plantations could be traced to nine multinational companies, it said.
"Despite promising customers that there will be no exploitation in their palm oil supply chains, big brands continue to profit from appalling abuses," said Meghna Abraham, senior investigator at Amnesty.
The NGO said it chose Wilmar as the focus of its investigation as the company is the world's largest processor and merchandiser of palm and lauric oils, controlling more than 43 percent of the global palm oil trade.
Other companies operating palm plantations in Indonesia include Golden Agri-Resources Ltd, Indofood Agri Resources Ltd and PT Astra Agro Lestari Tbk.
Even though Indonesia has strong labor laws under which most of the abuses can amount to criminal offences, these laws are poorly enforced by the government, Amnesty said.
Wilmar said it welcomed the NGO's report, which helps to highlight labor issues within the broader palm oil industry, but added that finding a solution requires the collaboration of governments, companies and civil society organizations. (For Wilmar's full statement, click http://bit.ly/2fx0q1t)
"We acknowledge that there are ongoing labor issues in the palm oil industry, and these issues could affect any palm company operating in Indonesia," it said.
"The focus on Wilmar ... is often used to draw attention to problems in the wider palm oil industry."
Wilmar supplies around 10 percent of the total palm oil used in Nestle's products, the Swiss food giant said in an email. Nestle said it is working with Wilmar to improve the traceability of the commodity.
"Practices such as those identified in Amnesty International's report have no place in our supply chain," Nestle said. The company said it would investigate allegations related to its purchase of palm oil along with its suppliers.
Procter & Gamble also said in an email it is working with Wilmar to "ensure they can remedy any potential human rights infringements in their supply chain".
GOVERNMENT TRYING TO REDUCE CHILD LABOR
Indonesia is the world's biggest producer of palm oil, used in everything from snacks and soaps to cosmetics and biofuels. The sector employs millions, and plantation operators say it is difficult to have complete oversight of labor conditions.
No company would "consciously" hire underage labor as that is against the law, but some plantation workers get their children to help out, Sumarjono Saragih, an official at the Indonesian Palm Oil Association, told Reuters by telephone.
"If children want to help their parents, companies cannot forbid that," Saragih said.
The government has been trying to reduce child labor by giving subsidies and other assistance to families, Maruli Hasoloan, a senior official at the manpower ministry, told Reuters in an email.
The ministry will also study working conditions at palm plantations and improve labor protection in Indonesia, he said.
Agus Justianto, an official at Indonesia's environment ministry, said that a company found guilty of labor violations could get its permit revoked, but it is "not in the environment ministry's domain."
U.S. snack and breakfast food company Kellogg Co said it is committed to ensuring that its palm oil is obtained from "known and certified sources that are environmentally appropriate, socially beneficial and economically viable".
If Kellogg finds or is made aware of any supply chain violations, it would discuss corrective actions with its suppliers, it said. "If the concerns are not adequately addressed, we take action to remove them from our chain."
Unilever said while significant progress has been made to tackle environmental issues associated with palm cultivation, more needs to be done to address "these deeply concerning social issues" and promised to work with its partners.
(Reporting by Eveline Danubrata and Bernadette Christina Munthe in JAKARTA; Additional reporting by Masayuki Kitano in SINGAPORE; Editing by Kenneth Maxwell and Tom Hogue)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- IEA's Birol sees oil market rebalancing well before end-2017
- UK not ruling out continued budget payments after Brexit: Hammond
- Iraqi troops push towards central Mosul from southeast
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!