Bipartite dialogues improve productivity of the palm oil industry and make business more resilient

Internasional, Kegiatan Daerah

Upholding the rights to freedom of association and collective bargaining is found to be a foundation for improving productivity and increasing number of workers joining trade unions that lead to the advanced protection of workers’ rights in palm oil sector.

Indonesia’s palm oil industry has grown to become an important part of Indonesia’s economy. As the largest producer in the world, it has provided direct and indirect employment for more than 17 million workers.

To advance the industry’s compliance with the international labour standards, particularly on the freedom of association and collective bargaining, the ILO has been partnering with relevant stakeholders since 2019. With support from the US Department of State Bureau of Democracy, Human Rights and Labour Affairs (USDRL), the ILO has been collaborating with the Ministry of Manpower, the Indonesian Palm Oil Association (GAPKI) and the Indonesian Trade Union Network for Palm Oil (JAPBUSI) which consists of ten trade union federations affiliated with four trade unions confederations in Indonesia.

To directly engage with the palm oil enterprises and local workers, Michiko Miyamoto, Country Director of the ILO in Indonesia and Claire Luke, Programme Officer of USDLR visited two palm oil companies in West Kalimantan from 14-15 February. The tripartite constituents also joined this site visit, including Sumarjono Saragih, GAPKI’s Head of Labour Department, Nursanna Marpaung, Executive Secretary of the Trade Union Network as well as representatives of labour inspectors from the Provincial Manpower Office of West Kalimantan and other trade union representatives of the Network.


Better workplace cooperation through dialogues

The site visit and dialogue between the representatives of the ILO, USDRL and the tripartite constituents at PT Gunas Group. (c) ILO/G. Lingga


The first site visit was conducted to PT Gunas Group located in Sanggau District—a-three-and-half hour drive from the capital city of West Kalimantan, Pontianak. An interactive dialogue was conducted with more than 60 workers members of the local trade union affiliated with Trade Union Federation of Food, Beverage, Tourism, Restaurant, Hotel and Tobacco (FSB KAMIPARHO) which was organised by the Head of the Trade Union at the enterprise level, Sarkunan.

He explained that, after participating in the training programmes provided by the ILO, he was able to organize 635 workers out of 1,178 workers in the company. Furthermore, he mentioned that, as a result, workers have better access on various information on fundamental rights at work, in particular freedom of association and collective bargaining, occupational safety and health (OSH) and gender equality.

“The ILO training have strengthened our understanding about important labour issues and have improved the way we communicate with the management. As a result, we have better labour-management cooperation and reduced intimidation,” explained Sakurnan.

Through improved communications and negotiations, the management has gradually improved the working conditions by providing personal protective equipment, work facilities, extra food for certain work positions as required as well as government insurance employment scheme known as BPJS for both health and employment. “With an effective dialogue, we are now in the process of negotiating wage and drafting the proposal of collective working agreement,” Sukarnan added.

A mutual trust increases the productivity

The site visit and dialogue between the representatives of the ILO, USDRL and the tripartite constituents at PT Patiweri under KPN Corp. (c) ILO/G. Lingga


The site visit continued with the second visit to PT Patiware in Bengkayang District with a similar time travel from the capital city. The interactive discussion was conducted with both representatives of the management and trade union. Memed Kosasih, Head of Human Capital of KPN Corp, a holding company of PT Patiware, greatly welcomed the monitoring visit from the ILO, USDRL and other social partners.

Memed thanked the support given by the ILO that has helped building a mutual trust and cooperation between the management and workers. “It is important for both parties to have a same perception that we need to build this business together. Through social dialogues between us, we now have the same vision, understanding and actions to ensure the sustainability of business,” he added.

Reza Satriadi, Chair of local trade union for Bengkayang District affiliated with the Trade Union Federation of Forestry, General Industry, Timber, Agriculture and Plantation (F-HUKATAN) said that good working relations have contributed in increasing the productivity of workers as there is no loss of working hours due to workers’ strike.

“Before we used to have frequent workers’ strikes for days and this affected the work performance and productivity. Through the ILO’s training programmes, we learnt how to build better and effective communications with the management. We learnt how to discuss our problems by understanding the perspectives of the management,” Reza added.

As a result, since last year, the company has conducted a bipartite meeting regularly every month and a weekly meeting session every Friday. Through these regular dialogues, both management and workers jointly discuss any workplace issues of concerns including the formulation of the collective working agreement that is planned to be finalized soon.

The representatives of the management and workers of PT Patiweri work together to improve the productivity. (C) ILO/G. Lingga


Claire Luke as the representative of USDRL appreciated the efforts taken by the two companies to uphold the fundamental rights of workers and to build good management-labour cooperation through social dialogues and to open the opportunity for organizing and negotiation.

“Through the partnership with the ILO, the US Government supports the fair labour practices in the sector. The initiative enhances the capacity of workers in taking ownership of advocating for their rights and negotiating better working conditions. I am pleased to witness the power of social dialogues that strengthened workers’ freedom of association to organize around their fundamental rights at work and negotiating collective bargaining agreement with employers for better working conditions in this sector,” she stated.

Michiko Miyamoto on behalf of the ILO applauded the good labour practices shown by local trade unions and employers in these two palm oil enterprises. The willingness from both employers and workers to jointly work together have yielded to good improvements and sustainability. “We need to document these good labour practices in Indonesia’s palm oil industry. We also need to disseminate them vastly. These good practices show that a mutual trust can be built between employers and workers and bipartite collaboration has helped combating the crisis and developing a more resilient business,” Michiko concluded.

The ILO’s support is given through its Advancing Workers’ Rights in Indonesia’s Palm Oil Sector Projec t. In Indonesia, the project aims to ensure that Indonesian unions in the palm oil supply chain effectively advocate their members on fundamental workers’ rights.

Michiko Miyamoto, Country Director of the ILO in Indonesia and Claire Luke, Programme Officer of the USDRL and the management of KPN Corp. (c) ILO/G. Lingga

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