The case for CSR/ Sustainability Reporting Done Responsibly


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Home / case studies / Case study: How IndoAgri protects employees’ human rights

Case study: How IndoAgri protects employees’ human rights

IndoAgri and its subsidiaries operate plantation and processing facilities to produce palm oil, rubber, sugar, cocoa and tea, also operating research & development, seed breeding, manufacturing and marketing of award-winning edible oils brands. IndoAgri’s vision is to become a leading integrated agribusiness and a world-class agricultural research and seed breeding company. Accordingly, IndoAgri is committed to respecting and protecting the rights of its workers  Tweet This!, complying with Indonesian law and with the UN Universal Declaration on Human Rights and the International Labour Organisation (ILO) codes of practice.

This case study is based on the 2019 Sustainability Report by IndoAgri published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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Committed to ensuring that the rights of all people working in its operations are respected and represented, IndoAgri adheres to all national and local laws, including laws on employees’ freedom of association and collective bargaining, decent pay and working hours, non-discrimination and equal opportunities, and the elimination of forced and child labour. In order to protect employees’ human rights IndoAgri took action to:

  • protect the rights of seasonal contract workers
  • prevent child labour
  • promote diversity
  • respect freedom of association

What are the material issues the company has identified?

In its 2019 Sustainability Report IndoAgri identified a range of material issues, such as environmental impacts and compliance, occupational health and safety, smallholder engagement and livelihoods, product traceability and sustainable sourcing, deforestation and land management. Among these, protecting employees’ human rights stands out as a key material issue for IndoAgri.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups IndoAgri engages with: 

To identify and prioritise material topics IndoAgri engaged with its stakeholders through the following channels:

Stakeholder Group                Method of engagement
Shareholders, investor and bankers ·      Meetings

·      Surveys

Customers and consumers ·      For new customers:

·      Surveys

·      Approach and product trials

·      For existing customers:

·      Regular visit/ meeting,

·      Bakers forum

·      Customer gathering

·      Customer support line

CPO Suppliers ·      Surveys

·      Audits

·      One-to-one meetings

Local Suppliers ·      Technical assistance to local businesses on construction of civil projects
Government and Regulators ·      Public forums and regular meetings
Non-Governmental Groups ·      RSPO process meetings

·      Other NGO meetings e.g. IDH

·      Local multi-stakeholders initiatives

Employees ·      Training sessions

·      Dialogue with unions

·      Grievance/whistle-blowing processes

Smallholders (FFB Supplier) ·      Development of platforms and projects on socialisation

·      Plasma assistants

Local Community ·      Regular feedback and awareness meetings

·      Forums for grievance & resolution

·      Other ad hoc engagements

What actions were taken by IndoAgri to protect employees’ human rights?

In its 2019 Sustainability Report IndoAgri reports that it took the following actions for protecting employees’ human rights:

  • Protecting the rights of seasonal contract workers
  • IndoAgri’s hiring of contract workers complies with government regulation, its Code of Conduct, its Policy, and the Principles and Criteria of ISPO (Indonesian Sustainable Palm Oil). Each seasonal worker’s contract respects government regulations, and IndoAgri makes sure that they understand their rights and responsibilities. As non-registered persons are banned from working on IndoAgri’s sites, all seasonal workers are registered by IndoAgri’s Human Resource Department and logged on to the fingerprint recognition system. The attendance of contract workers and their completed volume of work is maintained on a daily register and an online system. IndoAgri complies with and applies the formula prescribed in the Government Regulation No. 78 of 2015 which regulates the calculation of wages for contract workers. Depending on skills and job availability, IndoAgri’s seasonal workers can be promoted as permanent workers. Job vacancies are announced during the daily morning briefings and on the announcement boards of IndoAgri’s estates, mills, and the relevant village head’s (kepala desa) office. Having considered their skills and duration of service, IndoAgri hired 992 contract workers (including seasonal contract workers) as permanent workers in 2019.
  • Preventing child labour
  • IndoAgri takes proactive measures to prevent child labour from arising. As education is critical in drawing children from fields, IndoAgri provides free education and day care facilities to the children of its employees in estates. This approach also ensures a safe place for workers’ children whilst their parents work, hence eliminating the likelihood of workers bringing their children to work. IndoAgri is very strict in preventing all forms of child labour in its operations. Its Human Resource department verifies the identification card of all applicants to make sure that it does not employ anyone below the age of 18. Employment contracts for all workers include a clause on disallowing children to help with agricultural production work. Signs and posters reminding workers not to bring children are placed in all IndoAgri’s plantation sites. Disciplinary actions are taken against those who do not comply.
  • Promoting diversity
  • IndoAgri is committed to upholding the principle of equal opportunities and supporting the inclusion of women across its operations, including addressing barriers faced. IndoAgri has zero tolerance for sexual harassment and carries out regular socialisation initiatives to make sure all its workers adhere to its gender policies. Gender Committees are in place in IndoAgri’s work units to foster clear understanding of gender equality and to promote the participation of women in the workforce. These committees also manage the harassment complaint services. IndoAgri’s Gender Committees play an important role in maintaining and enhancing the role of women in estates, mills and households. In accordance to the Indonesian labour law, all permanent workers are entitled to maternity and menstrual leave. Jobs of new mothers are reserved while they are on maternity leave. In 2019, 308 women took maternity leave, and 86% or 264 women returned to the same job position. The rest remained on leave or chose to leave the company. All benefits and allowances paid out to IndoAgri’s female employees also comply with Indonesian labour laws and respect local cultural norms.
  • Respecting freedom of association
  • IndoAgri fully complies with the Indonesian Law No. 21 of 2000 on freedom of association and participation in labour unions and believes there are no sites where the right to freedom of association is at significant risk. All IndoAgri workers are free to register themselves directly with their preferred labour union and bargain collectively. As at end 2019, 61% of IndoAgri’s operational employees were registered with a union. The remainder are covered by a company regulation known as Peraturan Perusahaan. IndoAgri engages regularly with the labour unions of its workers through bipartite meetings to discuss issues such as agreement on wages and daily harvesting quotas to ensure appropriate and achievable workload for its harvesters.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 406-1 Incidents of discrimination and corrective actions taken

2) Disclosure 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

3) Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor

4) Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

 

Disclosure 406-1 Incidents of discrimination and corrective actions taken corresponds to:

Disclosure 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk corresponds to:

Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor corresponds to:

Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor corresponds to:

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



FBRH GRI Standards Certified, IEMA & CIM recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified, IEMA & CIM recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:

  • Identify your most important impacts on the Environment, Economy and Society
  • Begin taking solid, focused, all-round sustainability action ASAP

 

References:

1) This case study is based on published information by IndoAgri, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

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