Cargill exits palm oil in Papua New Guinea with US$175 million…leaving a trail ofworker abuse

[Omaha Steve]

http://asianfoodworker.net/?p=1014

| 2010.04.30 | Agriculture & Plantations, Cargill, Human Rights, IUF Affiliates, Palm Oil, Papua New Guinea and Trade Union Rights |

30 April is the final day that the global agricultural commodities company Cargill will own and operate palm oil plantations in Papua New Guinea (PNG). In late February, Cargill announced the sale of its three PNG palm oil operations for US$175 million to New Britain Palm Oil (PNG’s largest palm oil producer, controlled by the Malaysian state-owned enterprise Kulim). Cargill only operated palm oil plantations in PNG for a short time, arriving in November 2005 and departing four-and-a-half years later. Those four and a half years were highly profitable for the company, both within PNG and globally.

However, for workers at Cargill’s palm oil operations at Higaturu Oil Palm (HOP) in Popondetta (the largest of the company’s three sites in PNG) the years were ones of difficulty and the ongoing denial of trade union rights. As Cargill departs PNG with a mountain of cash, the company leaves in its wake a legacy of thousands of hours of unpaid overtime, the refusal to properly transfer workers’ membership dues to their union, the refusal to engage in genuine negotiations (including over wages) and the refusal to provide proper information to the local union.

In the beginning…

In November 2005, Cargill announced the acquisition of palm oil operations in Indonesia and PNG through the purchase of Pacific Rim Palm Oil Limited (PRPOL), a company owned by the CDC Group (an entity for British state investment in the developing world). According to CDC’s public reports, the Group received £80.2 million (equivalent to US$141 million at 2005 exchange rates) for PRPOL. The company was bought by Cargill in a joint venture with Temasek Holdings, the Singapore government sovereign wealth fund, in which Cargill maintained a majority share (public records of the exact breakdown are not available). The name of the joint venture company was CTP Holdings.

In purchasing PRPOL, Cargill gained control of approximately 55,000 hectares of palm oil plantations in Indonesia and PNG. At the time of the purchase Cargill owned one palm oil plantation in Indonesia. The purchase allowed Cargill to enter significantly into the rapidly growing and highly profitable palm oil business at the initial point of production.

When the new management arrived at HOP a series of changes were made to conditions which were not appreciated by workers. Among those changes was a refusal by the company to recognise long-service entitlements which workers had earned while working for PRPOL and the removal of paid maternity leave. In late 2006 a new leadership emerged in the Higaturu Oil Palm Processing Workers’ Union (HOPPWU) and began to revive the union which had lain dormant. From 2007 onwards HOPPWU successfully recruited workers to the union and attempted to engage with the management to improve workers’ conditions.

You can have a union…but do not expect to exercise your rights.

The response of the management at HOP was to frustrate, ignore, penalise, intimidate, mislead and try to neuter the union at every stage. Depsite operating at HOP for four and a half years, management refused to conclude a single agreement with the union.

FULL story at link.