Human Resources Development Policy and Practices: A Case of Palm Oil Industry in Indonesia

Human Resources Development Policy and Practices: A Case of Palm Oil Industry in Indonesia

Published: 2021.06.21
Accepted: 2021.06.15
16
College of Agriculture and Natural Resources, National Chung Hsing University, Taiwan
Indonesian Center for Agriculture Socio Economic and Policy Studies
Distinguished Professor
Department of Forestry, National Chung Hsing University, Taiwan

ABSTRACT

Indonesia is the largest palm oil producer globally, producing nearly 50 million metric tons of oil annually. Palm oil has a significant influence on the welfare of Indonesians among local farmers. Although the global controversy over palm oil is increasing, palm oil is the livelihood source for millions of Indonesian farmers. Nevertheless, in some domestic cases, the palm oil industry has a conflict between the local community and palm oil companies. Implementing some conflict resolution through mediation mechanisms at specific points requires implementing regulation strictly as a legal basis to develop human resources towards the country's palm oil industry. Hence, Indonesia's Government undertakes a downstream program and increases the national oil industry’s competitiveness to obtain higher added value. The renewal of the Indonesian Sustainable Palm Oil standard will require all national smallholder farmers to be certified and comply with legal requirements for all palm oil plantation companies. This article analyzes the government’s strategy and policy that focuses on protecting human rights in the palm oil industry's scope and human resources development in line with the sustainability mission.

Keywords: palm oil, human resources, government strategy, policies

INTRODUCTION

The Indonesian palm oil industry is the world’s largest producer of crude palm oil. This commodity is one of several plantation crops' excellent sources of non-oil and gas foreign exchange-earners for Indonesia. During the last four years (2017-2020), the average production of Palm Kernel Oil (PKO) and Crude Palm Oil (CPO) was 4.33 million Metric Tons (MT) and 43.87 million MT, with a growth of 6.18% and 7.36%, respectively. About 74% of production was exported to China, European Union, India, Africa, Pakistan, Middle East, United States, Bangladesh, and other countries (Table 1).

In terms of human resources, the palm oil industry creates 17 million jobs for the community and smallholder farmers. About four million people in Indonesia are dependent on this industry to sustain their livelihoods and this industry provides mechanisms for reducing poverty and increasing social development through the rural economy and job opportunities. Ikejiaku, 2009 explains the impact of human development on the trust relationship between the people and the leader (business or state). Nevertheless, in some cases, the industry has a challenge in the conflict between the local community and palm oil companies. The conflict is generated from problems which are, among other things, due to boundary disputes, illegal operations by companies, compensation and broken promises by companies, disruption to livelihood sources, removal of local communities, lack of consultation, and restrictions on access (Putra and Dunphy, 2018 and Rokhim et al., 2020). Even though some conflict resolutions were implemented through mediation mechanisms in certain spot areas, it is required to implement regulation strictly as a legal basis to develop human resources towards the palm oil industry in Indonesia.     

Applicable legal regulations must still guide the producers and investors in implementing oil palm plantations and palm oil processing factories. The specific regulation regarding plantation development in Indonesia is regulated explicitly through Law Number 18/2004 concerning Plantations (GoI, 2004). One of the primary considerations for the issuance of the Law Number 18/2004 is the earth, water, and natural resources contained therein have huge potential in the development of the national economy, including the development of plantations to realize prosperity and welfare of the people somewhat.

The development of oil palm plantations in the future faces severe challenges, namely the demands of stakeholders to build a sustainable palm oil industry system and issues related to global warming, issues of conservation and protection of biodiversity as well as land-use change, corporate social responsibility, and humanitarian issues. The United Nations considers the Indonesian palm oil industry still problematic because it still ignores the protection of human rights and the environment in practice. Indonesian palm oil is receiving pressure from the international market, especially from the European Union, due to environmental and human right issue (EU Resolution, 2017). These demands and challenges eventually demanded regulators and all oil palm plantation companies to achieve efficiency through intensification by increasing productivity following applicable laws. They must also pay attention to social sustainability, humanity, the environment, and the rural economy in the country's interests. Hence, this article presents the palm oil human resources development in Indonesia, which analyzes its rationale and legal basis, and government policy aspects.  

RATIONALE AND LEGAL BASIS

Considering that in order to implement the provisions of Article 16A of the Presidential Regulation Number 66/2018 concerning the Second Amendment to Presidential Regulation Number 61/2015 concerning Collecting and Using Palm Oil Plantation Funds (GoI, 2018), it is necessary to stipulate the Minister of Agriculture Regulation on Human Resource Development, Research and Development, Rejuvenation, and Oil Palm Plantation Facilities and Infrastructure. Table 2 shows a list of regulations that plays a role in developing human resources and palm oil production facilities to stabilize the palm oil industry's condition in Indonesia.

The current development of human resources for palm oil plantations is carried out to (1) increase knowledge, skills, attitudes, professionalism, independence, and competitiveness; and (2) enhance technical, managerial, and entrepreneurial skills. Human resource development is carried out through education, training, counseling, assistance, and facilitation. It also provides regulations on palm oil research and development, government efforts to protect plantation employment, and the national standard method for rejuvenating oil palm.

Training program

Training programs follow the regulation in technical, managerial, entrepreneurship, and other training following human resources development in the plantation sector. The training program's main target is planters, planters’ families, extension workers, assistants, state civil apparatus, and local communities around the plantation. Training must be carried out at the level of (1) Central level by the Minister; (2) Provincial level by the governor; (3) Regency/city level by regent/mayor, according to authority. Competent training institutions can organize training programs. The director-general carried out the Minister's training after coordinating with the Agricultural Human Resources and Extension Agency.

The provisions of the regulation are in line with fostering independent agricultural extension agents and private agricultural extension agents, minimum standards, utilization of agricultural extension facilities and infrastructure, agricultural extension methods, and management of extension centers. These have been regulated in the Minister of Agriculture Regulation Number 61/2008 concerning Guidance for Independent Agricultural Extension Workers and Private Agricultural Extension Workers (MoA, 2008), Minister of Agriculture Regulation Number 49/2009 concerning Agricultural Extension Policy and Strategy (MoA, 2009a), Minister of Agriculture Regulation Number 51/2009 concerning Guidelines for Minimum Standards and Utilization of Agricultural Extension Facilities and Infrastructures (MoA, 2009b), Minister of Agriculture Regulation Number 52/2009 concerning Agricultural Extension Methods (MoA, 2009c), and Regulation of the Minister of Agriculture Number 26/2012 concerning Guidelines for Management of Centers Counseling (MoA, 2012).

Regulations on palm oil research and development

Research and development of oil palm plantations are carried out to create innovation in breeding, cultivation, harvesting, post-harvesting, processing, and marketing products and strengthening research institutions. The oil palm plantation research and development institute are carried out by the Ministry of Agriculture or research and development institutions appointed by the main director-general in coordination with the Agricultural Research and Development Agency.

Work competences follow the regulations of the Minister of Manpower and Transmigration Number 21/2007 concerning the Procedures for Determining the Indonesian National Work Competency Standards or SKKNI (MoMT, 2007). It is stated that the SKKNI is a formulation of workability that includes aspects of knowledge, skills, and work attitudes relevant to the implementation of duties and job requirements following the provisions stipulated by statutory regulations. In addition to the SKKNI, in Government Regulation Number 31/2006 concerning the National Job Training System, particular and international standards are stipulated. Exceptional standards are competency standards set by a particular institution and only apply within the institution and other relevant institutions but still directly with the institution concerned.

The national standard method for rejuvenation of oil palm plants

Under the Decision of The Director-General of Plantation Number: 29/KPTS/KB.120/3/2017, the implementation of oil palm rejuvenation consists of rejuvenation techniques, executor of rejuvenation, accompaniment, escort, supervision, monitoring, evaluation, and physical assessment of the farms.

There are four conditions for rejuvenation techniques. It includes: (1) Rejuvenation of oil palms is carried out with simultaneous collapse techniques; (2) If land conditions cannot be carried out with simultaneous uprooting techniques, rejuvenation techniques can be carried out that are adapted to local conditions; (3) Rejuvenation of oil palm consists of land preparation, seed procurement, as well as planting and maintenance; and (4) On land indicated by Ganoderma sp. disease, it is carried out using tolerant plant seeds, large hole making treatment, application of biological control agents, and other treatments following technological advancements.

The role and rights of international parties

The Indonesian government participates in the ASEAN Economic Community. It provides opportunities for foreign parties to develop agricultural human resources to sustain sustainable agriculture programs. Table 4 shows a list of international cooperation regulations that allow foreign extension institutions or firms to work in Indonesian territory within the human resources development mission's scope.

PRACTICES OF HUMAN RESOURCES DEVELOPMENT

This part comprises the human resources development, including basic program, extension program, and extension curriculum materials. Those are discussed concerning international parties' role and rights and policy direction towards a national action plan for sustainable palm oil in Indonesia.

Major program

The Indonesian Ministry of Agriculture, through the Agricultural Human Resources and Development Agency, is working to improve the capacity and quality of domestic agriculture human resources. They also repositioned and focused on extension activities, training and education by prioritizing extension activities. In implementing extension programs and activities, the government will carry out two action programs: The Integrated Farmer Empowerment Movement (GPPT Program) and the Farmer Regeneration Program.

Human resources have an important role in the development of agriculture and plantation in Indonesia. The strength factor of human resources or employment is essential in driving Indonesia’s national development. The Ministry of Agriculture takes part in the status of the palm oil industry. So, the regeneration of farmers is significant for the future of Indonesian palm oil. The main objective is in line with transforming agricultural vocational higher education. The government also transforms the Agricultural Extension School into the Agricultural Development Polytechnic. It is followed by (1) Initiating program for the growing young agricultural entrepreneurs in collaboration with state and foreign universities; (2) Involving students, alumni, youth farmers to intensify mentoring/escorting the Ministry of Agriculture program; (3) Developing growth of joint business groups (KUB) focused on agriculture for young farmers; (4) Conducting training and apprenticeship for young farmers in agriculture; and (5) Optimizing extension agents to encourage and grow young farmers.

Agricultural counseling program policies and strategies are translated into programs arranged in an integrated, synergistic, and sustainable manner. The program includes (MoA, 2018): (1) Strengthening of government agricultural extension institutions in provincial, district/city and sub-district areas; (2) Empowering private agricultural extension institutions; (3) Empowering farmer institutions, namely farmer groups and farmer group association; (3) Empowering civil, independent, and private agricultural extension workers; (4) Improving synergy in the implementation of agricultural institutionalization among institutions of agricultural extension, and related technical agencies as well as research institutions; (5) Enhancing the implementation of agricultural counseling through the partnership of the central and local governments as well as private sector; (6) Increasing the competence and professionalism of agricultural extension and farmers; (7) Developing the younger generation of agriculture to regenerate sustainable farmers and entrepreneurship in the field of Agriculture; and (8) Increasing support for infrastructure and facilities for agricultural extension based on current technology.

Agricultural extension program

The agricultural counseling program is the direction, guidelines, and means of controlling the objectives of the agricultural counseling implementation. The agricultural extension program is arranged in five stages, as presented in Table 3.

Counselling, assistance, and facilitation program

According to Regulation of the Minister of Agriculture Number 03/2018 regarding Guidelines for Organizing Agricultural Counseling, the government provides counseling, assistance, and facilitation, which are carried out through increasing knowledge, skills, and attitudes in the sustainable management of oil palm to the business actors and the community. By providing guidance, consultation, education, and advocacy from plantation planning to yield processing palm oil, this program is planned with a proposal from each head of regency/city offices to provincial offices. The head of the provincial office carries out verification and submits it to the director-general. Verification results are used as material to publish technical recommendations by the director-general and forwarded to the Indonesia Palm Oil Plantation Fund Management Agency.

Agricultural extension curriculum material

The material is prepared based on the primary and secondary business actors' needs and interests by considering the usefulness, preservation of agricultural resources, and the agricultural area's development. Agricultural counseling material contains elements of (1) Developing human resources; (2) Improving science, technology, information, economics, management, law, and environmental sustainability; and (3) Strengthening farmer institutions.

Agricultural counseling material is directed to develop the primary and secondary business actors' capacity in managing profitable and environmentally friendly farming businesses to increase income and welfare. Agricultural counseling materials that contain technology can include technological innovation that comes from traditional knowledge. Capacity development of main actors enhances the professionalism and competitiveness in the globalization of regional and international trade. It can be implemented through education and training and competency certification by statutory provisions.

The agricultural counseling material is compiled individually by the central, provincial, and district/city agricultural counseling material drafters. The team consists of at least structural officials who carry out functions in agricultural extension.

Agricultural counseling and extension curriculum is packaged in the form of media by the technical standards of agricultural counseling media. The agricultural counseling media is used communicatively and effectively per the characteristics of the agricultural extension targets. Further provisions regarding agricultural counseling material are regulated by the Decree of the Head of the PPSDMP Agency on behalf of the Indonesian Minister of Agriculture.

POLICY DIRECTION

Regarding the Presidential Instruction Number 8 of 2018 concerning Postponement and Evaluation of Oil Palm Licensing and Increasing Productivity of Oil Palm Plantations, Presidential Instruction Number 6 of 2019 concerning the National Action Plan for Sustainable Palm Oil 2019-2024 and Presidential Decree 44 of 2020 concerning the Indonesian Sustainable Palm Oil, the main focus is the empowerment of oil palm farmers through improving the good governance system for human resource development.

The policy direction of human resource development includes: (1) Optimizing the role of counseling in the assistance of the food self-sufficiency program at the agriculture, fisheries, and forestry extension center as well as agricultural extension working areas; (2) Increasing competitiveness and performance of education and training centers as well as professional certification of agriculture; (3) Revitalizing agricultural education; (4) Strengthening agricultural secondary education; and (5) Strengthening transparent and accountable administrative and management systems (BPPSDMP, 2019).

CONCLUSION

The Ministry of Agriculture is preparing good practices for agricultural and human resources, focusing on oil palm plantations. The Ministry of Agriculture and the Central Government's focus is to make Indonesia the largest palm oil-producing country in the world following international sustainable agriculture standards. Moreover, international parties' issues and pressure on Indonesian palm oil products have reduced millions of local farmers' productivity. One such issue focuses on human rights or human resources management. Responding to this, the President of Indonesia gave directions to improve human resources' quality with various strategies. In recent years, national development has been oriented towards increasing competency-based human resources that support palm oil farmers' regeneration. The Ministry of Agriculture will increase international acceptance of Indonesian palm oil products and increase palm oil exports while maintaining human resources' quality mental sustainability. There are four things that the Indonesian government is building, namely, building a system of standardization, education, training, and certification. Together with the Ministry of Agriculture and its subordinate institutions, the government compiles an Occupational Map to accelerate the completion of the Indonesian National Work Competency Standards. The Indonesian National Qualification Framework as a reference for educational, training, and certification institutions supports the quality of education or training graduates who produce competent and competitive human resources following the demands of businesses or industries. 

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