EMPLOYEES

Human resource practices which respects universal human rights, including prohibiting the use of child or forced labour in our operations. We adhere to the fundamental elements of International Labour Organization (ILO) Convention and the United Nations Declaration on Human Rights, the Rights of Indigenous Peoples and other core values as ratified by the countries in which we operate.

UN Guiding Principles on Business and Human Rights

On 16 June 2011, the United Nations Human Rights Council endorsed the Guiding Principles on Business and Human Rights. In this context, UP has in place the following policies:

• Human Rights Policy
• Guest Workers Policy

As per our continuous improvement efforts, we are focusing on retraining (reach, teach and remind) all our employees, customers, contractors, suppliers and communities on the core values which we are fully committed to.

During the launch of The Malaysia Chapter of the UN Sustainable Development Solutions Network (UN-SDSN) in 2015, UP was mentioned as one of the sustainable development solution initiatives being undertaken in Malaysia. In the SDSN Malaysia Chapter, UP was identified as a “Business with a soul”. This acknowledgement was indeed pleasing and indicated our commitment to being a leader in economic, environmental and social sustainability.

Human Rights Policy

We at United Plantations Berhad are committed to the protection and advancement of human rights including prohibiting retaliation, intimidation and harassment against Human Rights Defenders (HRD), whistleblowers, complainants and community spokespersons.

Guest Workers Management System

We consider our foreign workers as guests and they are partners in our business along with our local workers. Our guest workers are from Indonesia, Bangladesh, India, and Nepal which constitutes 87% of our workforce in Malaysia, as such our challenges are to identify and understand human rights impacts on our diversified workforce within our Group.

In UP, we have revised our Guest Workers Policy to incorporate the key elements on human rights protection which includes, no Guest Worker shall pay any fees related to recruitments  to come and work for UP, no withholding of passports, and personal documents, execution of employment contracts in the source countries, no withholding of wages and no penalty for premature repatriation.

Prior to embarking on their recruitment journey, all potential Guest Worker Candidates are directed through our in-house Call Centre to create awareness and disseminate information on the legal recruitment process to prevent deception and minimise their vulnerability. The workers are briefed on the recruitment process /fees, job scope, work nature as well as the employment contract in their native languages of their source countries.

In addition, Accredited Recruitment Agents are carefully selected to ensure that all Guest Workers are recruited transparently and without deception.

For more information on our Guest Workers Policy, please click here

The policy was revised in collaboration with Dignity in Work for All (formerly known as Verite SEA)

Guest Workers’ Passport and Personal Documents

All Guest Workers keep their passports in their own possession i.e safe deposit box are provided by the management at their respective accommodation.

Neither passports nor any identity documents shall be withheld or retained for whatsoever reason other than required for official document processing such as work permit renewal handled by the HRSS Department.

Guest Workers Repatriation and Leave

With 87% of our workforce being guest workers, there is a frequent turnover of employees within our Group. We strongly promote freedom of movement which can be seen in the table below. During 2023, 355 guest workers have been repatriated upon completion of their employment tenure. Another 833 guest workers went back on leave to their respective home countries of which 701 have returned. 

 

The HRSS Team verifies each and every guest worker on arrival to ascertain the recruitment supply chain and expenses from respective source countries until the arrival in Malaysia.

Appropriate translators are engaged on a need basis during the interviews. This exercise is done to add credence for responsible sourcing within our supply chain.

Ethical recruitment of Guest Workers

The Malaysian Plantation sector remains reliant on Guest Workers, who provide about 80-85% of the industry’s labour requirement today. This is not at the expense of taking jobs away from local Malaysians as they prefer to work in urban cities and are just not interested in being employed as harvesters or to work with other field activities. In UP, as of 31 December 2023, we have 4,449 Guest Workers – mainly from Bangladesh, India and Indonesia – whom we consider as guests, and they are vital partners in our business along with our local workers. In some of these countries, there are risks of systemic human rights abuses, which is an important topic that has escalated since 2021 through numerous reports and media articles, particularly on the corrupt practices of undisclosed middlemen as part of the Guest Workers’ recruitment process. In light of this, it has become evident that more needs to be done to safeguard migrant workers during their recruitment to prevent such middlemen from abusing their inherent vulnerability through deception, thereby driving them into debt bondage. In combination with today’s improved understanding of forced labour risks and indicators, we agree to the growing consensus that more needs to be done to safeguard Guest Workers during their recruitment, from potentially becoming victims of deception, abuse of vulnerability and debt bondage.

To view the Ethical Recruitment Guidelines of UP, please click here.

Reimbursement of retrospective recruitment costs

In the absence of a widely accepted multi-stakeholder framework to address the abovementioned concerns and risks, we initiated an internal investigation and assessment of our own operations, which included interviews with more than 300 Guest Workers. This
investigation, which was carried out with “Dignity in Work for All”, was completed in January 2022 and established that our Guest Workers too had paid undisclosed recruitment fees to third parties in exchange for a job in UP. Consequently, we have strengthened our recruitment procedures, updated our Guest Workers Policy and introduced the Employer Pays Principle, effective 31 December 2021, stating that no Guest Worker should pay for a job in UP.

Whilst strengthening our policies going forward, we also acknowledge that reasonable remediation of past recruitment practices plays an additional role in alleviating the risk of forced labour in our operations. The investigation therefore also resulted in all active Guest Workers on 31 December 2021, recruited by UP from their respective home countries, receiving a full reimbursement payment for the undisclosed recruitment fees paid to third parties in the past. This payment was made on 5 December 2022, and amounted to RM 24.5 million in total. These initiatives have been discussed and worked on together with all our key customers, in the spirit of shared responsibility.

In addition, our 174 locally recruited Guest Workers have all been given RM3,000 as a goodwill payment towards the hardship faced in relation to their previous recruitment journey and employer. These are Guest Workers who fall under the Malaysian Government’s programme to legalize undocumented migrant workers, thereby giving them an opportunity to be employed by qualified employers subject to stringent conditions. UP has participated in this programme and paid all related recruitment fees and costs in line with our Ethical Recruitment Guidelines. This has given them a second chance in the form of a job, free quality housing of high standards, social amenities as well as free water, electricity and medical coverage.

Finally, we continue to invest time and resources in identifying eligible ex-Guest Workers through our Outreach Programme, for whom reimbursement funds have been set aside in a sinking fund of RM4.38 million. This is to cover the 635 Guest Workers who were active on 31 December 2021 but had left our Company (absconded, repatriated or on leave) before the payment was made on 5 December 2022. From this, a balance of 322 eligible ex-Guest Workers are yet to be reimbursed as of 31 December 2023.

Furthermore, there are also 166 locally-recruited ex-Guest Workers who have not yet been paid and are therefore included in the Outreach Programme. We are attempting to identify all eligible ex-Guest Workers through our Outreach Programme, which have been extended until 30 June 2024 and contains the following activities that are verified by our internal audit team and an independent third party.:

1. Newspaper advertisement in the respective source countries.
2. Engagement with source countries’ Embassies and High Commissions
3. Identification and engagement through UP’s Call Centre via contact details obtained by Estate management or friends who are still in UP.

4. Engagement of individuals in the source countries to search for our eligible ex-Guest Workers in the villages, followed by authentication by an appointed legal professional before payments are made.
5. Engagement with an Independent Human Rights Activist to use his vast network to contact the eligible ex-Guest Workers

For more information on the reimbursement of retrospective recruitment costs, please click here.

Recruitment of new Guest Workers

In 2023, UP recruited 803 new Guest Workers, of which 781 were recruited from the various source countries, and 22 were recruited locally through the Malaysian Government’s Recalibration Program. This has been guided by our strengthened Ethical Recruitment
Procedures, which are regularly assessed by NGOs and Human Rights Activists, and explained in detail below.

Firstly, whether recruitment is facilitated by our Guest Worker Recommend Guest Worker program, or at the grassroot level via an Accredited Recruiting Agent (ARA) or Government bodies, we strive to ensure that all new Guest Workers are recruited in compliance with the ILO indicators of Forced Labour, as well as our Employer Pays Principle stating that no Guest Worker should pay for a job in UP.

Addressing forced labour and minimising recruitment risks is also about recognising and tackling the systemic issues that enable abuses. We have therefore decided to cut out several actors in both the sending and receiving countries, such as sub-agents as well as recruiting agencies in Malaysia, and instead spread information to new candidates in their villages through our In-House Call Centre to mitigate the risk of deception. In this connection, our Call Centre continues to play a crucial role as the first point of
contact with new candidates.

The Call Centre staff who speak the candidates’ respective native languages clarify the overall recruitment process and terms of employment with UP to reduce the new candidates’ vulnerability and minimize the risk of deception. In addition, the Call Centre helps to bridge the gap between the candidates in their villages and our Accredited Recruiting Agents located in the source countries’ larger cities. This is to address the fact that a big part of the problem often lies here, with middlemen in the rural villages often charging exorbitant fees to the village folks in exchange for a job.

The Call Centre has been operational for approximately two years, and many positive outcomes have emerged, as evidenced by the feedback from new Guest Workers, who, through clear communication and expectation setting, are informed about their rights, entitlements, and precautions from the outset. During 2023, we have introduced several new steps to further strengthen our Ethical Recruitment Procedures and mitigate the vulnerability of the new candidates prior to their arrival at UP based on our improved
understanding of forced labour risks and gaps identified along the recruitment process:

A) Screening of the recommenders under the Guest Worker Recommend Guest Worker program to identify the most suitable candidates.
B) Verification upon arrival in Malaysia by the HRSS team to ascertain that all new Guest Workers have been briefed by the Call Centre and indeed gone through all steps of our Ethical Recruitment Procedures.
C) Each new Guest Worker is provided all relevant documents and information about his employment and recruitment journey in a dossier.
D) Onboarding sessions are carried out for all new Guest Workers by the HRSS team to facilitate their integration into the environment on our estates and to brief them again on their terms of employment, company policies, safety at work, grievance redressal mechanism and other aspects.
E) Internal verification by the Internal Audit team 3 months after arrival to detect any red flags and mitigate the likelihood of debt bondage.
F) In the event of any breach of our Ethical Recruitment Procedures, each case is thoroughly evaluated to determine accountability and remediation.

Additionally, training on due diligence and audit of recruitment agencies was carried out by a team of subject-matter experts from by “Dignity in Work for All”, including a joint assessment of an ARA in Indonesia to evaluate and monitor their performance and processes. Such assessment will be repeated in the coming year for ARAs in other source countries too.

Furthermore, we have initiated a close collaboration with Mr Jerald Joseph – an experienced independent Human Rights Consultant – in partnership with the social NGO North-South Initiative (NSI), to observe, evaluate and provide further guidance on our Ethical Recruitment Procedures in Malaysia as well as the source countries. Through this collaboration, much time and effort have been spent during 2023 on evaluating our recruitment avenue in Bangladesh, where we continue to work closely with Bangladesh Overseas Employment and Services (BOESL).

BOESL, who is not related to the 25 recruitment agencies selected earlier between Malaysia and Bangladesh, is the only state-owned recruitment agency in Bangladesh, has a ‘no profit no loss’ strategy and works in a transparent manner. To verify this, the above independent assessors joined us for an interview process in Dhaka during the year to ensure that our procedures have indeed been in place and followed.

Overall, the key steps in our Ethical Recruitment Procedures are illustrated below and whilst this has increased the cost of recruiting new Guest Workers substantially, we are hopeful that all parties along our supply chain will acknowledge this added cost of doing
business in the spirit of shared responsibility, thereby helping to minimize the risk of forced labour. In 2024, we will continue to work closely with “Dignity in Work for All”, Mr. Jerald Joseph as well as NSI to diligently strengthen our recruitment and grievance redressal procedures even further.

Fair Wages and Employee’s Benefits

The average monthly earnings of our workers in Malaysia amounts to RM2,523 which includes productivity incentives and overtime. This is higher than the minimum monthly wage of RM1,500 rate set  by the Malaysian Government from 1 May 2022. We practice gender equality policy on wages payment and remuneration for all our employees.

For our Indonesian operations, the average monthly earnings of the permanent workers amounts to IDR3,820,271 which includes productivity incentives and overtime. The minimum wage set by the Indonesian Government in 2023 was IDR3,352,983.

The average earnings per worker per month are reflected in the table below.

In our Malaysian operations, we do not have any temporary workers. However, in our Indonesian operations, during peak crop season (2-3months in a year), temporary workers are engaged which constitutes to around 10-12% of the total workforce (≈140 temporary workers out of total ≈1200 workforce) as of December 2023. The seasonal temporary workers are offered employment with similar wages as permanent employees, appropriate insurance coverage and medical facilities.

We, at UP, are committed to pay at least minimum wages for workers who achieved full attendance and the similar commitment applies to all direct and indirect sourcing.

	Male	Female
Malaysian operations	100%	100%
Indonesian operations	100%	100%

Remark: The earnings for both male and female workers are calculated in a similar manner based on the working days or Productivity Linked Wages System (PLWS). We adhere to the equal treatment practices in line with our Human Rights Policy.

Freedom to form a Union

Employees and workers have the rights to form and become members of labour unions. Through unions, workers have the right to carry out collective bargaining as permitted under Malaysia and Indonesia laws.

Minimum Notice Periods Regarding Operational Changes

United Plantations Berhad is a member of MAPA (Malayan Agricultural Producers Association) which has collective agreements with NUPW (National Union of Plantations Workers) and the All Malayan Estates Staff Union (AMESU) Employees and workers have the rights to form and become members of labour unions. Through unions, workers have the right to carry out collective bargaining as permitted under Malaysia and Indonesia laws.

The Company also engages with the Food Industry Employees Union for refinery workers. The collective agreements are renewed every three (3) years where either party may serve on the other three (3) months’ written notice to negotiate on new terms and conditions of employment and other related matters but no such notice shall be served earlier.

The timely and meaningful collective bargaining allows the affected parties to understand the impacts of the changes. It also gives an opportunity for both parties to work collectively to avoid or mitigate negative impacts as much as possible. Consultative practices that result in good industrial relations help to provide positive working environments, reduce turnovers and minimize operational disruptions.

Living Wage (LW) Assessment

The RSPO Secretariat is in the process of commissioning benchmarks for Malaysia and Indonesia for the palm oil sector and will develop methods to calculate and/ or define LW applicability for all palm oil producing countries in which RSPO members operate. In 2023, the RSPO Living Wage Working Group has changed the terminology of Decent Living Wage (DLW) to Living Wage(LW) with a stepwise approach. Each step of the Living Wage trajectory has assigned milestones and outcomes towards achieving a Living Wage payment to all workers in the sustainable palm oil sector.

In the past, UP has proactively worked with several large growers in the industry to engage Monash University for a fair and decent wage assessment and will strive to commit our suppliers to live up to the payment of LW  to their workers too. Until the national benchmark is established by the RSPO Secretariat, we are adhering to the applicable regulations in relation to the national minimum wages in the countries where we operate.

However, we are conducting the prevailing wage assessment as per the RSPO Prevailing Wage Calculation Guidance to understand and compare the benchmark of LW determined by the third-party assessment as mentioned above against the prevailing wage.

Internal Stakeholders

Recognising the value and importance of communication and consultation in clearing up misunderstanding/conflicts/grievances or raising any issues with United Plantations Berhad, the following procedure is adopted, in an effective, timely and appropriate manner that is open and transparent to any internal stakeholders.

Step I
Within four (4) working days of a grievance arising, the employee concerned shall raise the grievance with supervisory staff to whom the employee is responsible and shall be given the opportunity to be accompanied by not more than two members of the Union Committee/Guest Workers’ Welfare Committee/Employee himself.

Step II
If the matter is still not settled within a further five (5) working days, following representations made under Step I above, the appropriate Union Committee shall make formal representation to the estate in writing. On receipt of Union Committee’s letter, the estate will, without delay, offer arrangement for a meeting between the executive staff to whom the employee is responsible and/or an accredited official of the estate and Union Committee which will be attended by not more than two Union Committee’s representatives. Such a meeting shall be held within seven (7) working days of receipt of the Union Committee’s letter/Guest Workers’ Welfare Committee/Employee himself.

Step III
If the matter remains unsettled, the grievance shall then be discussed between the Manager and/or his accredited officials and Union Committee representatives, Guest worker’s, Welfare Committee/Employee himself within a further period of seven (7) working days.

Step IV
If the matter still remains unsettled, it shall then be dealt with under the provisions of the Industrial Relations Act, 1967 or the Employment Act, 1955.

Sexual Harassment

Any grievance related to sexual harassment or violence cases shall adhere to the redressal procedure as follows:

Any worker who has grievance related to sexual harassment or violence nature can obtain the complaint form from one of the sub-committee members in respective Estates/Departments and either complete it herself or request the assistance of the sub-committee member to fill it up.

The complaint form is to be submitted to the respective Head of Department and copied to the Gender Committee. Appropriate action should be initiated by the Head of Department. If the issue is not resolved in two (2) weeks from the date of complaint or if the victim is not satisfied with the way the issue is dealt with at the department level, the Gender Committee will bring this case up to the Group Manager Human Resources, Sustainability and Safety (HRSS). The Group Manager HRSS  has been given the mandate by the Chief Executive Director to address all unresolved issues pertaining to sexual harassment and violence. If and only if the issues are unable to be resolved by the Group Manager HRSS, the case will be brought forward to the Executive Committee for the top management’s discussion and decision.

Our commitment towards providing quality housing and social amenities and to maintain the highest possible welfare standards for the families of our workforce.

United Plantations is forward-looking and proactive in Corporate Social Responsibility, providing excellent amenities and emoluments well above the minimum statutory requirements prescribed by the various Acts and Regulations of the nation, governing the plantation industry.

Social Commitments

UP is committed towards providing and improving social amenities remains very much a hallmark within our Group. Continuous improvements were made during 2022 to provide our workforce with the best possible facilities which are significantly above the latest amendments to the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990.

For babies and young children UP continues to provide and maintain crèches for personalised child care thereby ensuring that employees are comfortable about their children while at work.

Today, our Group has 9 Primary Schools and 7 Kindergartens which are maintained by the Company, providing education for more than 500 children ranging from age of 5 to 12 years. Bus subsidies for school children above the age of 12 years old are also provided for.

Places of worship for our employees, Group Hospitals & Clinics and an Old Folks’ Home to care for the aged and the homeless as well as a fully operational Danish Bakery are also a part of UP’s care and commitment towards the wellbeing of its employees.

In addition, 22 scholarships were granted to children of our employees during 2023  thereby enabling these students to pursue their tertiary studies.

Annual Benevolent Payments

Annual benevolent payments as well other compassionate and educational payments as well as some external donations including for Covid-19 made by the Group to workers amounted to RM2,054,600 during 2023. The payments made through our various Benevolent and Educational Schemes are as follows:

1. UP Workers Benevolent Retirement Scheme ( established in 1985)
2. UP Education and Welfare (established in 1986)
3. UIE (M) Education and Welfare Fund (established in 1997)

The objective of the UP Workers Benevolent Retirement Scheme is to provide retirement benefits to workers who are loyal and have served the Group for 10 years and above and in addition to the workers entitlement under their respective collective agreements.

Social Commitments of the Group

 

Dedicated employees being recognized and rewarded for their long service upon their retirement

Social Amenities

The Community Halls on our estates continue to be put to good use providing our employees with vastly improved facilities for special functions such as weddings, engagements and other religious ceremonies.

Upgrading of our guest workers living quarters which our Company embarked on since 2010 has progressed well and is ongoing. These guest workers terrace houses have provided the finest living facilities in our industry with a living area of 150m2 per unit encompassing 3 bedrooms, 1 kitchen, 2 bathrooms and a large hall and patio.

Sporting Activities

We encourage our employees to participate in sporting and social activities by providing facilities such as football fields, community halls, badminton courts, tennis court and futsal court etc. During the year several intercompany badminton and football tournaments were arranged providing fun and team work outside office hours.

In addition, annual sports days are held at selected estates to enhance friendship and community spirit through sports.

UP Football Team, Jendarata FC emerged champions in the Lower Perak District League Championship held on 12 January 2019, after a number of tough matches to the delight of supporting fans and players.

Bernam Bakery

Bernam Bakery located on Jendarata Estate UP, 160km north of Kuala Lumpur, renowned for its Danish pastries and hand-made cookies, was the brainchild of our late Tan Sri Dato’ Seri B. Bek-Nielsen.

It was established in 1982, purely out of necessity, to teach the local employees how to make good wholesome bread, for the local community, who found the quality of bread they bought from various dealers to be inferior, thus a scheme was created to enable the employees of the plantation to purchase quality bread .

The bakery, which is equipped with the most modern Danish machinery, was constructed within five months. Tan Sri Dato’ Seri B. Bek-Nielsen enlisted the help of his good friend, the late Robert G. Pedersen, a master baker and retired lecturer from Holstebro Bakery School in Denmark, to train our local employees on the traditional art of baking original Danish bread and cookies on a no cost basis. It was amazing to see how the bakers became proficient within 6 months, thus providing our labour force with wholesome and nutritious secret recipes of bread and cookies of excellent quality, using shortenings produced by our refinery, Unitata.

The transfer of Danish Technology in the Baking Industry, took many years of dedicated work under the watchful eyes of the master baker.

The current bakery Manager, Mr. Jayarama Reddy and his team, do not only cater for the employees and the public but also is a proud supplier of high quality bread, pastries, cakes and biscuits to the many guests who visit United Plantations as well as certain outlets throughout Malaysia.

In January 2018, Mr. Vagn Nielsen, a Master Baker and a retired lecturer from Holstebro Bakery School in Denmark was invited to Bernam Bakery to train and work together with our local bakery team to help ensure that the quality in the final product is assured and found to be consistent.

Mr. Vagn Nielsen is a former student and friend of the late Mr. Robert Pedersen and it is therefore most pleasing that he has agreed to be associated with Bernam Bakery as a visiting Bakery Adviser together with his wife Mrs. Else Nielsen going forward.

Our corporate culture is deeply embedded in our traditional values and legacy the Company’s founders left behind nearly 118 years ago. The Old Folks Home was officially opened by Minister of Labour, YBhg Tan Sri V. Manikavasagam on the 17 March 1967 on Jendarata Estate and is the only one of its kind in this industry. Set in a peaceful environment, it caters for the retired and aged employees who are given free boarding, food and medical care. A full-time caregiver is also provided for the Home.

Old Folks Home

Creche

Kindergarten

Primary School

Clinic

Group Hospital

Temple

Church

Mosque

Staffs and Workers Quarter

Drinking-Water Filtration System

Clubhouse

Museum

Sundry Shop

Barber Shop

Ferry Transport

 

In UP our human capital is indispensable and our approach is “Reach, Teach” as well as “Reach and Remind’. Training schedules are prepared for our employees annually in the respective Estates and other Departments to ensure that the various trainings are being carried out on a regular basis throughout the year.

This is monitored and verified internally by the HRSS team and also through external auditors during MSPO/ISPO/RSPO annual audits. As for Staff and Executive levels, training sessions are generally conducted on a group basis.

These trainings cover Occupational Safety & Health, Human Rights, Best Agriculture & Management Practices and Industrial Laws and others. With 87% of our workforce being guest workers and with 20% annual turnover it is imperative that on the job trainings and re-trainings are constantly conducted. The scope further widens for certain types of categories, for instance, fire drills are being held periodically as per annual training programmes with the participation of neighbouring communities.

An employee who knows that he needs to wear his Personal Protective Equipment (PPE) during his operation at the site without being monitored/presence of his superiors is what internalizing the awareness altogether. Nevertheless, the training sessions need to be constantly carried out as human nature also tends to take things for granted.

The competence and skills of the Group’s employees are the main contributors to Operational Success. This, undoubtedly, also helps them to enhance their capabilities and build capacity. Life-long learning, through training programme, conferences and seminars which are relevant to the Group’s businesses are identified on an ongoing needs basis and the Company allocates a dedicated training budget to support the continuous development of our employees.

The training’s effectiveness transpires in the awareness of our employees during unannounced internal audits and performance monitoring.