Employment and Income of Workers on Indonesian Oil Palm Plantations: Food Crisis at the Micro Level
Abstract
The importance of oil palm sector for Indonesia is inevitable as the country currently serves as the world’s largest producer of crude palm oil. This paper focuses on the situation of workers on Indonesian oil palm plantations. It attempts to investigate whether the remarkable development of the sector is followed by employment opportunities and income generation for workers. This question is posed within the theoretical framework on the link between trade liberalisation and labour rights, particularly in a labour-intensive and low-skilled sector. Based on extensive field research in Riau, this paper confirms that despite the rapid development of the oil palm plantation sector in Indonesia, the situations of workers in the sector remain deplorable, particularly their employment status and income. This also attests that trade liberalisation in the sector adversely affects labour rights. The poor working conditions also have ramifications for food security at the micro level.
Keywords: Palm oil; Indonesia, Trade liberalisation; Labour rights; Employment; Income, Food security; Food crisis
Submitted: 30 August 2013; Revised: 25 October 2013; Accepted for publication: 3 December 2013; Published:20 December 2013
urn:nbn:de:hebis:34-2014021145105
Full Text:
PDFReferences
Arbache, J.S., Dickerson, A., and Green, F. (2004). Trade Liberalisation and Wages in Developing Countries, The Economic Journal. 114: F73-F96
Badrun, M. (2010). Tonggak Perubahan: Melalui PIR Kelapa Sawit Membangun Negeri. Jakarta: Direktorat Jenderal Perkebunan Kementerian Pertanian Republik Indonesia
Berik, G., and Rodgers, Y.v.d.M. (2008). The Debate on Labour Standards and International Trade: Lessons from Cambodia and Bangladesh, University of Utah Department of Economics Working Paper No: 2007-03
Beyer, H., Rojas, P., and Vergara, R. (1999). Trade Liberalization and Wage Inequality, Journal of Development Economics. 59:103-23
Blanton, S.L. and Blanton, R.G. (2009). A Sectoral Analysis of Human Rights and FDI: Does Industry Type Matter?, International Studies Quarterly. (3)2: 469-93
Brown, D.K., Deardorff, A.V., and Stern, R.M. (2003). The Effects of Multinational Production on Wages and Working Conditions in Developing Countries. National Bureau of Economic Research Working Papers No. 9669
Casson, A. (1999). The Hesitant Boom: Indonesia’s Oil Palm Sub-Sector in an Era of Economic Crisis and Political Change. Center for International Forestry Research
Chamim, M., Irawanto, D.S., Pareanom, Y.A., Hae, Z., Budiman, I. (2012). Raja Limbung: Seabad Perjalanan Sawit di Indonesia. Jakarta: Sawit Watch dan Tempo Institute
Colchester, M., Jiwan, N., Andiko, Sirait, M., Firdaus, A.Y., Surambo, A., Pane, H. (2006). Promised Land: Palm Oil and Land Acquisition in Indonesia- Implications for Local Communities and Indigenous People, Forest People Programme and Perkumpulan Sawit Watch
Cragg, M.I. and Epelbaum, M. (1996). Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?, Journal of Development Economics. 51: 99-116
Desjonqueres, T., Machin, S., and Van Reenen, J. (1999). Another Nail in the Coffin? Or Can the Trade Based Explanation of Changing Skill Structures Be Resurrected?, Scandinavian Journal of Economics. 101(14): 533-54
Directorate General of Estates (2011). Tree Crop Estate Statistics of Indonesia 2010-2012. Jakarta: Directorate General of Estates, Ministry of Agriculture Republic of Indonesia
Feenstra, R.C. and Hanson, G.H. (1997. Foreign direct investment and relative wages: Evidence from Mexico’s maquiladoras, Journal of International Economics. 42: 371-93
Goenadi, D.H., Drajat, B., Erningpraja, L., and Hutabarat, B. (2005). Prospek dan Pengembangan Agribisnis Kelapa Sawit di Indonesia. Ministry of Agriculture, Research and Development Department
Hanson, G.H. and Harrison, A. (1999). Trade Liberalization and Wage Inequality in Mexico, Industrial and Labor Relations Review. 52 (2): 271-88
Indonesian Palm Oil Board (2010). Fakta Kelapa Sawit Indonesia. Jakarta: Indonesian Palm Oil Board
Ing, L.Y. (2009). Lower Tariff, Rising Skill Premium in Developing Countries: Is It A Coincidence, The World Economy, 1115-11133
International Labour Office (2007). Project on Dynamics of International Labour Standards. International Labour Organization
Kucera, D. (2002). Core Labour Standards and Foreign Direct Investment, International Labour Review. 141(1-2):31-69
Maskus, K. E. (1997). Should Core Labour Standards be imposed through International Trade Policy. The World Bank Policy Research Working Paper No. 1817
Mather, C. (2008). Value Chain and Tropical Products in a Changing Global Trade Regime. International Centre for Trade and Sustainable Development, Issue Paper No. 13
McCarthy, J.F. (2010). Process of inclusion and adverse incorporation: oil palm and agrarian change in Sumatra, Indonesia, Journal of Peasant Studies. 37(4):821-850
McCarthy, J.F. and Cramb, R.A. (2009). Policy narratives, landholder engagement, and the oil palm expansion on the Malaysian and Indonesian frontiers, The Geographical Journal. 175 (2):112-123
Morone, P. (2003). Globalisation and Inequality: the Effects of Trade Liberalisation on Developing Countries. Science and Technology Policy Research, Electronic Working Paper Series No. 42
Mosley, L. and Uno, S. (2007). Racing to the Bottom or Climbing to the Top? Economic Globalization and Collective Labor Rights, Comparative Political Studies. 40(8):923-948
Munshi, F. (2008). Does openness reduce wage inequality in developing countries? A Panel data Analysis, http://gupea.ub.gu.se/bitstream/2077/2665/3/gunwpe0241corr.pdf
Rasiah, R. and Shahrin, A. (2006). Development of Palm Oil and Related Products in Malaysia and Indonesia. University of Malaya
Richter, B. (2009). Environmental Challenges and the Controversy about Palm Oil Pro- duction – Case Studies from Malaysia, Indonesia and Myanmar. Friedrich-Ebert-Stiftung Singapore
Rist, L., Feintrenie, L., Levang, P. (2010). The livelihood impacts of oil palm: smallholders in Indonesia, Biodiversity and Conservation. 19:1009-1024
Robbins, D. (1994). Worsening Relative Wage Dispersion in Chile during Trade Liberalization, and its Causes: Is Supply at Fault?. Development Discussion Paper No. 484, Harvard Institute for International Development
Robbins, D. (1996). HOS Hits Facts: Facts Win; Evidence on Trade and Wages in the Developing World: Development Discussion Paper No. 557, Harvard Institute for International Development
Rogovsky, N. and Sims, E. (2002). Corporate Success through People: Making International Labor Standards Work for You, Geneva: International Labour Organization
Siagian, S., Hotler, Anto, Benhidris, Supono, Jiwan, N., and Hasibuan, F. (2011). Miljoenen van Palm Olie Plantages: A Working Paper on Labour Rights Situation and A Recommendation to Build Just Labour System Guideline for Palm Oil Plantation Workers in Indonesia. Kelompok Pelita Sejahtera, Lentera Rakyat and Sawit Watch
Surambo, A. (2010). Independent Planters, http://www.sawitwatch.or.id/index.php?option=com_content&view=article&id=73%3Apekebun&catid=49%3Akategori-buku〈=en (Retrieved on June 10, 2025)
Susila, W. R. (2004a). Contribution of Oil Palm Industry to Economic Growth and Poverty Alleviation in Indonesia, Jurnal Litbang Pertanian. 23 (3):107-114
Van Gelder, J. W. (2004). Greasy Palms: European buyers of Indonesian palm oil. Friends of the Earth
Refbacks
- There are currently no refbacks.
Sponsoring Organisations
Comments on this article
-
sua mulher vai adorar isso
View all commentsby Helena Pontes (2026-02-14)