Palm Oil for the West, Exploitation for Young Workers in Malaysia

Squinting under the bill of his baseball cap, Leonary Marcus scans the treetops for ripe clusters of palm fruit to hack down with the aluminum scythe hanging from his shoulder. When a flame-red bunch catches his eye, he hooks the tool at the crux of the branch and yanks downward with all the muscle a 17-year-old can muster. The canopy shakes, a squawking bird flees and the fruit crashes to the ground in scattered heaps for him to gather into a rusty wheelbarrow. Leonary wipes the sweat from his face and moves on to the next row of trees, as he has done almost every day for the past five years.

The boy was invisible from the skies I flew in over the day before, wandering alone somewhere under cover of the plantations that blanket Malaysian Borneo. The monoculture is carved by muddy rivers where crocodiles lurk and laterite roads that lead to processing plants with belching steel smoke stacks. Patches of clear-cut earth indicate where some farms are being expanded to keep the boilers full and the profits flowing into the coffers of the multinational agro-businesses that own them.

On the ground, in the void between the giant trees, Leonary stands out. He plods along, despite the heat and unexpected arrival of an outsider with questions about where he's from, why he's not in school. After moving from Indonesia as a boy with his migrant worker parents, he attended a learning center run by a local non-profit organization. But because he did not have any legal documents, he was barred from secondary school, leaving him with no choice but to work the same farm as his parents for about $7.50 a day. "There is no other option for me," he says.

***

To the Malaysian government, Leonary Marcus officially does not exist.

He is one of an estimated 50,000 stateless Indonesian children living in Sabah province, the country's palm oil producing heartland. Thousands more have come from the Phillipines, born to workers that have arrived in waves since the 1970's to fulfill a demand for cheap labor in what is now the world's second-largest palm oil industry. Without papers that prove nationality, their children are likewise denied healthcare and education, while the rest of the region continues to enjoy the fruits of their labor.

Over the past two months, life has grown even harder for migrant workers in Sabah. When followers of the mysterious Sultan of Sulu traveled to the region in early February to re-establish a land claim, a weeks-long standoff turned bloody, leaving more than 70 people dead and scores displaced. Malaysian forces are accused of rights abuses against the migrant community in the backcountry as they try to flush out remaining gunmen, while scores of Filipinos have fled the violence by boat.

In 2011, the export of palm oil and palm-based products earned Malaysia $27 billion—a five-fold increase over the past decade—thanks to brisk trade with China, the European Union, India and the United States, which is now importing record levels for its low price and long shelf life. Today, more than half of all products sold in U.S. supermarkets, from cosmetics to candy bars, contain palm oil. And with new government-mandated labeling requirements in the United States and Europe aimed at phasing out unhealthy trans-fats found in other types of oil, demand is increasing.

That's more good news for Sabah, which accounts for one-third of Malaysia's palm oil output. Twenty-five years ago, Lahad Datu, the provincial capital, was a forgotten backwater of clapboard buildings. Drunkards roamed cracked sidewalks by day and nightfall was a signal to stay indoors. Locals recall how their hapless police force was nowhere to be seen when a gang of pirates shot their way into the town's only bank, walking out with sacks of cash over a trail of dead bodies.

Such visions are hard to square with the robust development sweeping the area: Over the past 15 years the city's population has doubled; downtown real estate prices have quadrupled; gleaming business-class hotels and fast-food franchises line newly paved roads that are monitored by squad cars. In the middle of a busy traffic roundabout in the center of town, a gilded palm tree stands as a symbol for the government-led campaign to upgrade a region that has lagged far behind Malaysia's industry-rich Western peninsula.

"Life here used to be much different; it was a rough kind of place," says Tammay Bin Inton, 58, a community leader for whom the days of violent street crime and power outages are a not-so-distant memory. He sat with a group of friends at a popular Indian teashop, talking football over cups of milk tea and samosas. With some pride, he noted that both of his children had recently moved back from Kota Kinabalu, eastern Malaysia's largest city, to start projects of their own and take advantage of the boom. "The quality of life here has improved tremendously," he says. "Business is good."

South of town, lines of tanker trucks deliver crude palm oil around the clock to a sprawling, state-owned refinery complex where fresh lots have been set aside for potential investors. Provincial officials hope that a deep-water port currently under construction nearby will position the region to be a top exporter of biodiesel, if and when overseas demand surges. With government plans to double the overall area under cultivation by 2020, the prospects of Lahad Datu's inhabitants are poised to get brighter.

But when the subject changes to the migrant laborers who keep the tankers revving around the clock, the mood at the cafe table sours. Mention of the vital role legions of Indonesians and Filipinos play by filling menial plantation jobs that most Malaysians would never consider causes the men to grumble vaguely about an increase in troubling behavior ("...the migrants are causing public disturbances"); the erosion of local culture and traditions; and the threat migrants posed to local employment prospects ("...what about the locals?").

"The foreigners must be controlled. They are stealing jobs... Those that don't have documents should be kicked out of Malaysia," says Arnan Angkut, 50, a contractor. As for those who have toiled for decades to the benefit of the local economy, whose children are rejected by state schools and hospitals? "That's up to the bosses (of the plantations). They can take care of their workers as they see fit. We don't want to pay for anything."

It was several days later that I came across an interesting item in the Business Times newspaper: Malaysia is losing at least 3 billion Ringgit ($986 million) in potential exports and tax revenue due to unpicked palm fruit resulting from its labor shortage. To avoid huge losses and hit target output goals, the Malaysian Palm Oil Board estimated that 40,000 additional workers needed to be hired, and fast. The article pointed out that many oil palm planters are mechanizing agricultural practices wherever possible and offering better wages in the estates across the region.

"Despite this," the article continued, "many locals continue to shun plantation jobs." Officials lamented the loss of potential tax revenues and vowed to get approval for extra foreign workers. No mention was made of incentives that might be offered to retain existing Indonesian and Filipino workers, some of whom are starting to leave the country for rival Indonesia as palm plantations expand into virgin tracts of forest.

The contradiction seems to be lost on everyone in Sabah. Nasrun Datuk Mansur, a state assemblyman and assistant to the state's chief minister, later boasted to me that palm oil is the catalyst for a raft of business activities raising Lahad Datu's profile, and the region's.

Acknowledging the perennial need for migrant workers, he added, somewhat incongruously, that they "should leave their children behind" because of the extra burden it places on the state. "We have responsibility to take care of our own children here."

Until Malaysia gained its independence in 1957, all children could attend school regardless of where they came from or what documents they had. But with migrant populations now accounting from nearly one-third of Sabah's 3.2 million people, rights activists say that over the years burgeoning nativism has made the government less willing to pay for universal education.

"This whole question that arose from locals that, if you provide the education for migrant children, then the local children lose out," says Aegile Fernandez, program director of Tenaganita, a Malaysia-based nonprofit group that assists migrant workers. In other words: to propose reforms that would extend rights to migrants' children would prove costly at the ballot box. And with elections on the horizon in the coming months, no politician dares stray from the script.

When I reminded Mansur that his government does not currently provide any services, he feinted by complimenting the non-governmental organizations that are stepping up with help from foreign governments and agro-businesses, whose mega-farms dominate the countryside. "The companies are also making money," says Mansur. "They should be responsible to support the foreign children."

Pressed further about the thousands who are not taken care of, he ended the discussion and walked out of the room.

***

They may lack government funding, but Sabah's stateless children have at least have Torben Venning. Tall and sturdy-built, with a fair complexion that refuses to adapt to the equatorial sun, the Danish native has waged a dogged campaign to sew education in plantation country since he arrived more than two decades ago as a traveler.

Venning and some friends opened a facility in 1990 to educate 70 farm children. Since then, his organization, Humana Child Aid Society, has established 128 "learning centers" (designated as such because they are not officially accredited) that offer instruction to more than 12,000 students with help from donors such as the European Union. "We came here as teachers and had no idea this was going to develop into the project it is today," he said.

It costs about $13 a month per student to provide lessons in core primary subjects, along with a uniform, two meals and salary for teachers, some of whom are brought from the students' home countries. Venning says that educating them will ultimately benefit the country by "ensuring that they have a future beyond the plantations and don't become part of the social problem."

Yet, ever the diplomat in a land not his own, he tiptoes around the question of whether the Malaysian government's must look after the children of its labor force. He prefers to focus on the heavyweight companies that are picking up some of the slack.

On a searing hot morning Venning drove me out to what he described as a model of corporate social responsibility. The pavement on the outskirts of Lahad Datu crumbled into a dirt track that winded up steep switchbacks before descending into an expanse of oil palm plantations where the dense canopy scarcely allowed any light through.

We finally arrived at the gate of plantation owned by Wilmar International, one of Asia's largest agribusiness companies and the world's largest listed palm oil firm, with more than $30 billion in revenues in fiscal year 2010.

Manager Frederick Chok greeted me with skepticism at one of four learning centers on the premises. Wearing a white company polo shirt, he pointed out athletic fields and a mosque just a short walk away, as well as a new series of concrete barracks where, we were told, veteran workers and their families were housed.

Inside the classroom, walls featured bilingual posters and a flat-screen television with a satellite connection. Twenty-plus students, ages 5-15, were upbeat and engaged. Their teacher, a young Indonesian woman in a lavender headscarf, said off-the-cuff that she'd been surprised by the amenities made available to her, to Venning's visible delight. He capped the visit off by leading the group in an off-key rendition of his Humana theme song, which borrows heavily from a Donna Summer track. Even Chok mustered a smile.

Afterward we had coffee on the veranda of the great house that overlooked the sprawling, 8,000-hectacre property, the size of a small national park. Chok stressed the importance of corporate social responsibility like a mantra and said his company spends nearly $1 million every year to take care of migrant children. In the "competition" to retain experienced workers, Chok added that doing the right thing also made good business sense. (Singapore-based Wilmar has its critics, however. The Rainforest Action Network, a San Francisco-based environmental group, alleges the company's security forces have used violence and heavy machinery against villagers in Indonesia's Sumatra province. Wilmar rejects the claims.)

In Venning's view, larger companies like Wilmar were generally doing more to look after workers' children since the advent of the Roundtable on Sustainable Palm Oil. The Zurich-based non-profit stakeholders group was formed in 2004 to address social and environmental problems associated with palm oil. The group, which unites investors, traders, and oil palm growers with retailers and social organizations to better monitor supply chains and promote sustainability, now certifies about 14 percent of the palm oil produced worldwide.

But systemic challenges persist. Greenhouse gas emissions are not included in the RSPO certification process. As peatlands, the earth's largest single source of stored carbon, are cleared for palm plantations in Malaysia and Indonesia, massive amounts of carbon are being released.

In the wilds of Malaysian Borneo, the high cost of logistics inhibits the construction of more learning centers, giving children no alternative to palm oil work. For all Venning's efforts, Humana and its partners take care of only one-fifth of the children estimated to be living on Sabah's plantations. Even those lucky enough to receive some degree of education have little to no mobility once they become adults.

***

Off a nameless back road about an hour's drive from Lahad Datu, Fatima Binti, 18, gazes out into the endless maze of trees. A shortage of money and the long distance from the small plantation the family works forced her to stop going to the nearest learning center a year ago. Absent documents, she can't go into town, fearful she might be picked up and harassed by police.

The maximum fine for not having official documents was 10,000 Ringgit ($3,200), a sum that would exceed the family's haul for the year. The alternate scenario, deportation and being split apart from her family, was unthinkable.

The rain is falling hard as she clicks her scuffed pink nails on the rail of the porch, waiting. She wants to be a doctor and longs to join her friends in class. She hopes her siblings will attend school "so they will be able to read and count."

Until then, Fatima is resigned to stay close to her parents, cutting and clearing palm branches from dawn until dusk, helping them earn whatever they can.