Determinants and Strategies for Increasing Palm Oil Enterprises' Participation in the Labor Social Security Program for Casual Laborers

Abstract

Palm oil production accounts for an estimated 2.5% of Indonesia's GDP and employs up to eight million people in agriculture and processing. The palm oil industry is highly profitable as a result of rising consumption. With high production and proper management development of oil palm, the value of economic income from oil palm products will increase. The palm oil industry contributed significantly to rural development in eradicating poverty. The cultivation of oil palm improves household living standards on average. As the expansion occurs primarily in tropical rainforest regions, it is likely that the development of new oil palm plantations contributes to biodiversity loss, carbon emissions, environmental, and social issues. Due to economic pressures and the principle of survival, many workers then choose to devote themselves to work in the oil palm plantation sector. Despite the benefits of oil palm on household income and consumption, as well as local development and work opportunities, numerous social and environmental costs have been revealed. The employment of temporary contract workers, including daily casual workers, is governed by the Manpower Act and Ministerial Decree No. 100 of 2004 on Manpower and Transmigration. Working condition is strongly correlated to situations where many of the jobs created in palm oil plantations and mills are for casual day laborers, which is particularly vulnerable to being paid low wages, lacking job security, and with minimum legal protection. Seventy percent of people working in palm oil plantation without guaranteed work certainty and job security. They worked as casual laborers, contract workers, and outsourcing workers. With the status as casual laborers and unclear contractual agreement, often their fundamental rights are ignored by companies. Casual day laborers have reported that they are discouraged from joining any type of workers union, a condition that has led to the deterioration of their working conditions. One of the problems experienced by workers is the occurrence of work accidents, and the workers are not legally protected. An event that often happens in oil palm plantations is work accidents either caused by the workforce's negligence or due to inadequate personal protective equipment facilities. If an accident occurs to a casual laborer, then the company has no direct obligation to provide responsibility for the incident even though some companies still provide voluntary assistance as humanitarian, moral support. Companies’ use of casual labor can blur the distinction between laborers and service providers. These include lack of regulation, non-enforcement of existing laws, misuse of power, power imbalances in favor of the employers, and lack of judicial discourse. So, there is a need to find what is the determinant affecting the companies to register the workers to participate in social security program by BPJS Ketenagakerjaan. Finally, there is a need to formulate a strategy to increase the participation of palm oil enterprises in registering their casual labors for social security. The data used in this research are secondary data and primary data. The secondary data are annual data of oil palm company who registered and still active as of 2021. The data is collected and received from BPJS Ketenagakerjaan database. After requesting to the BPJS Ketenagakerjaan’s management data divison in total of 2738 data of oil pam enterprises received and then analyzed with the data analysis mechanism. Independent variables are membership period, number of workers, registered regional office, company ownership type, and enterprises’ business scale. Meanwhile, dependent variable is casual daily laborers status. These data is processed using SPSS 25 to determine what factors influencing palm oil enterprises to register its casual laborers to labor social security program. To collect primary data, interviews are conducted with respondents, who then complete questionnaires. Five experts involved in the planning and strategy decision-making processes at BPJS Ketenagakerjaan are the respondents in this study. These are the respondents chosen by the institution, the Investigating Supervisory Officer (Petugas Pengawas Pemeriksa), the Head of Branch Office, the Deputy Director of DKI Jakarta Region, the Deputy Director for Corporate and Institutional Membership, and the Deputy Director for Special Membership. The questionnaires are inputted to the Expert Choice 11. The relative comparison values of each alternative set of criteria can be modified based on a predetermined evaluation to generate weights and rankings. The use of pairwise comparisons to obtain a relatively accurate priority scale ratio is a major benefit of calculating AHP. Casual laborers in oil palm plantation are often omitted when social assistance and other forms of social protection are dispersed. This is because of how remote their work location is. There results of this study suggest that the duration of membership has a negative effect on the registration status of casual laborers in means that in the increasing of membership period of company registered as BPJS Ketenagakerjaan participant, the intention to register casual laborers to labor social security is decreasing. The increasing of number of workers employed in palm oil plantation is increases the likelihood of companies registering their casual labors. Palm oil enterprises which registered in Sumatra, Kalimantan, Sulawesi, and Maluku, as well as BANUSPA regional office, are more likely to register their casual labors with the labor social security program if compared to those companies registered in Java region. National Private firms tend than other types of company ownership to register their casual laborers in the labor social security program administered by BPJS Ketenagakerjaan. The micro scale palm oil enterprises are more likely to register its casual labors in labor social security program administered by BPJS Ketenagakerjaan. The strategy to increase the enterprises participation to register its casual laborers is derived from the AHP analysis. BPJS Ketenagakerjaan can employ a law enforcement towards company compliance as an alternative strategy to increase awareness and compliance both for employers and employees in palm oil enterprises to contribute to labor social security program.