FBTPI: Mapping Palm Oil Supply Chain




FBTPI union members investigate the palm oil supply chain

Jakarta, November 24, 2019 – Federasi Buruh Transportasi Pelabuhan Indonesia (FBTPI - Federation of Transportation and Dock Workers Union) held a discussion to investigate and map the palm oil supply chain focusing on the interconnection of its affiliated unions. This activity is part of transnational collaboration to link civil society and workers along the global production network. The following is a summary of the results from the preliminary investigation.

The activity was conducted by conferring with the palm oil manufacturing factory workers and members of FBTPI affiliated unions to investigate what kind of commodities they produce and their place within the global production network.

FBTPI is a federation of unions with members in the transportation, port, and manufacturing sectors. The palm oil manufacturing factories with members of FBTPI are PT. Asianagro Agungjaya (AAJ), PT. Dinuo Indonesia, PT. Dua Kuda Indonesia, dan PT. Orson Indonesia. They are located in Marunda Export Processing Zone (KBN Marunda), in North Jakarta.

PT. Asianagro Agungjaya (AAJ) is a palm oil refinery factory owned by Royal Golden Eagle (RGE)/ APICAL Group. AAJ employs around 1,000 workers and is supplied with crude  palm oil from plantations owned by PT. Asian Agri. PT. AAJ is known for producing 1) consumer goods and 2) raw materials for further processing. The relation between RGE/ Apical Group and Asian Agri, and whether Asian Agri is subsidiary of RGE/ APICAL, is still unknown.

PT. Dua Kuda Indonesia (DKI) produces raw materials and is supplied by AAJ. In addition to dealings with AAJ, DKI is also known to receive supplies from PT. Lestari Jambi, PT. Darmex Agro, dan Salim Group. DKI is an export-oriented factory with its primary market being China (60% of the total export), followed by the EU and domestic market.

PT. Orson Indonesia factory manufactures soaps and vegetable oil. Orson is supplied with raw material from DKI and exports its commodities to the Middle East and for the domestic market.

In KBN Marunda, there is one additional factory, PT. SAPO, that is part of the palm oil supply chain. This factory produces soaps made with materials supplied by Orson. The workers in the SAPO factory are unorganized and are working in bad conditions including contractual employment and low wages.

Interconnection of FBTPI affiliated unions

The discussion attended by AAJ and DKI workers also examined working conditions and organizing strategies. In DKI, the workers are experiencing insecurity due to contractual employment and threats of factory closure. The workers and their union are still trying to negotiate for a collective agreement. Meanwhile in AAJ, the main issue regarding working conditions concerns occupational safety and health (OSH).

AAJ is reported to force workers to use hazardous chemicals in the production process, namely 1) nitrogen, 2) amonia, 3) citric acid, 4) butyric acid, and 5) lecithin acid. Some workers report suffering from related illnesses after retirement. The workers also cannot access the results of medical examinations facilitated by AAJ.

On March 31, 2019, hundreds of PT. Dinuo Workers faced mass dismissal following the factory’s closure. This dispute ended with the union’s victory in which the company agreed to pay the severance compensation to the workers.

FBTPI plans to hold further investigations in order to 1) understand and analyse the full extent of connected actors in the supply chain, 2) assess the OSH issues at the connected workplaces, and 3) formulate organizing strategies to reach unorganized workers in factories such as SAPO. FBTPI also intends to include its affiliated union members working in retail companies selling consumer goods made from palm oil.

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