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, Nepal which constitutes 85% 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 2021, we have revised our Guest Workers Policy to incorporate the key elements on human rights protection which include reimbursement of statutory recruitment fees, no withholding of passports, execution of employment contracts in the source countries, no withholding of wages and no penalty for premature repatriation.

Guest Workers’ Passport Lockers

We have constructed a room containing passports lockers within the plantations to enable our guest workers free access to their passports without any restrictions.

Individual passport lockers  for Guest Workers’ have been constructed in all our Estates in 2021 for the voluntary safekeeping of their passports and personal documents with 24 hours access. 

Guest Workers Repatriation and Leave

With 85% 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 2022, 382 guest workers have been repatriated upon completion of their employment tenure. Another 612 guest workers went back on leave to their respective home countries of which 508 have returned. 

Minimizing the Financial Burden for Guest Workers

We are committed to ensuring that exploitation of our guest workers has no place in our business operations. We conduct assessments, interviews and spot checks to identify gaps and potential risks within our operations and develop mitigation plans and provide remedial actions.

Our guest workers are from Indonesia, Bangladesh, India, Nepal which constitutes 85% of our workforce in Malaysia, as such our challenges are to identify and understand human rights impacts on our diversified workforce within our Group. From our assessments, we prioritise our implementation plans and focus on the risks to the vulnerable groups. We identified that recruitment practices relating to guest workers may be vulnerable to exploitation at the source country.

Recruitment Practices

We recruit guest workers directly through the appropriate government approved channels as below: 

• Indonesians- Indonesian Embassy –FWCMS-KDN 
• Indians-E-Migrate System –FWCMS-KDN
• Nepalese –Nepal High Commission –FWCMS-KDN 
• Bangladeshis – Awaiting new recruitment policy by Malaysian Government 

FWCMS – Foreign Workers Centralised Management Services by Government of Malaysia
KDN- Kementerian Dalam Negeri/ Ministry of Home Affairs of Malaysia
e-Migrate system by the Government of India 

We do not charge any recruitment fees and to reduce the financial burden on our guest workers. 

In view of the COVID-19 pandemic outbreak, the Malaysian Government has frozen all recruitment avenues for guest workers as a precaution against imported cases of COVID-19.  We are waiting for the new recruitment policy by the Malaysian Government. Upon its release, we plan to establish call centres in the respective source countries which will act as a bridge between the workers from villages to the main accredited recruiting agents in order to disseminate the recruitment process, job scope at the Plantations and conduct pre-departure briefings. It will also minimize the risks of sub-recruiting agents charging additional recruitment costs on the guest workers.

Guest Workers’ Verification by HRSS Department

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.

Fair Wages and Employee’s Benefits

The average monthly earnings of our workers in Malaysia amounts to RM2,204 which includes productivity incentives and overtime. The minimum wage set by the Malaysian Government in 2021 was RM1,200. 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 IDR3,743,662 which includes productivity incentives and overtime. The minimum wage set by the Indonesian Government in 2022 was IDR3,077,218.

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 2021. 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.

Ethical Recruitment Practices

In light of this, it has become evident that the fees migrant workers pay to unscrupulous middlemen to secure a job abroad can be way in excess of the statutory and legally permissible recruitment fees. 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 migrant workers from potentially becoming victims of debt bondage.

In this connection, we have conducted an internal assessment and interviews of our guest workers, and extensively deliberated on various guidelines and studies on migrant worker recruitment and risks related to forced labour by the ILO, The United Nations, The International Organization for Migration (IOM), The Responsible Business Alliance and other relevant organizations. We have also engaged and held discussions with numerous stakeholders and experts from all over the world. This investigation was completed in early January, 2022, and has indeed been a learning experience.

In the absence of a widely accepted multi-stakeholder framework to address the new findings and risks, through close collaboration with Verité and key customers, we have therefore decided to proactively incorporate ethical recruitment and employer pay principles in our updated Guest Worker Policy, effective 31st December 2022.

With this, we commit to minimize risks of exploitation and debt bondage thereby ensuring that our guest workers are recruited fairly and ethically, and that all reasonable and legitimate costs incurred by the worker during our recruitment processes are covered by UP.

We are also in the midst of finalising a remediation and compensation plan in acknowledgement of the findings from our recently finalised investigation, suggesting that past practices were not sufficient given what we know today. This will help provide remediation to our guest workers for the unscrupulous procedures many of them have been exposed to in their respective home countries during the recruitment process.

With this in mind, we have tried to identify a repayment plan that is reasonable, fair and practical, and with this we acknowledge that appropriate repayment of past recruitment practices plays an important role towards establishing sound policies going forward.

On top of this, we continue to work with Verité to diligently strengthen our recruitment procedures and protocols even further, which includes taking immediate action against any actors in our supply chain who are found to be in violation of our policies.

Finally, whilst waiting for the Malaysian Government to re-open the recruitment avenues for guest workers and release their updated recruitment procedures and MOUs with respective source countries, we have established an in-house toll-free call centre to act as a bridge between the workers from villages to the main accredited recruiting agents. This is to address the fact that a big part of the problem often lies here, with unknown middlemen in the rural villages trying to charge exorbitant fees to migrant workers in exchange for a job.

The call centre, which is manned by people who speak the local languages, will clarify the overall recruitment process, do’s and don’ts for the interested workers, as well as the job scope at the plantation. Although it is still early days, we are already hearing positive feedback from prospective guest workers who are made aware of their rights, entitlements and watch-outs upfront, through clear communication and expectation setting.

Something which also fosters the development of inhouse learning and potentially could improve the public knowledge base on international labour migration and thereby help promote effective and efficient recruitment policies.

At the end of the day, addressing forced labour and recruitment risks is also about recognising and tackling the systemic issues that enable abuses, and appropriate government legislation and effective enforcement is a vital part of this common objective of reducing the risk of labour exploitation.

In the spirit of shared responsibility, we have proactively approached and updated our key customers on all the above and held several meetings to discuss our views and commitments, and to highlight the importance of participating in minimizing risks of forced labour. The forced labour issue is a challenge that demands action by actors across the supply chain, and it is our firm belief that ethical recruitment and investments in risk mitigating tools is the only right way forward, which most importantly will benefit our guest workers, but also UP and our customers all over the world.

Decent Living Wage (DLW)

The RSPO Secretariat is in the midst of commissioning a study to establish a benchmark of Decent Living Wage (DLW) for the palm oil producing countries where the members operate. In 2019, UP had collaborated with several large palm oil growers and Monash University in conducting a fair and decent wage assessment.

We are adhering to the payment of prevailing wage as per RSPO Prevailing Wage Assessment Guidelines for all categories of workers in our Malaysian and Indonesian operations. Our commitment is that all workers are paid a DLW applies to all direct and indirect suppliers where the suppliers shall calculate a site-specific living wage as per RSPO Prevailing Wage Assessment Guideline in accordance with Global Living Wage Coalition (GLWC). We evaluate the commitment from our suppliers annually via the supplier’s self-assessment questionnaire.

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 2022  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 RM1,108,924 during 2021. 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 113 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

Passport Lockers

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 85% 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.