Introduction

The COVID-19 pandemic provides unmistakable evidence of the current tempest sweeping the face of the earth that has resulted in humanity’s foundations being rocked. There is a need for a cleansing process designed to weld together humanity into one organic, indivisible, world-embracing community. In this context, researchers need to look for innovative ways of translating research into action and converting action into research.

In this section, the author would like to share the experience of embedding action into research by applying a relatively underutilised research approach– Action Research in accounting research. Most accounting scholars are familiar with archival and survey type positivistic research that does not aim to change the status quo. Fortunately, the emergence of the critical perspectives in accounting research paradigm continues to highlight accounting’s failings and pushes for change to ensure accounting meets the needs of a rapidly globalising world community. The critical perspective accounting research which maintains that accounting researchers can neither escape the responsibilities, whether of omission or of commission, of the past, nor shirk those of the future is subscribed here. It is believed that there is a need to give account of humanity’s past actions. Only when one understands the implications of what occurred, will it be possible to meet the challenges that loom ahead.

This experience-sharing is of relevance to Sunway University’s current focus on planetary health and sustainability issues. Sustainability is a major concern for Oil Palm plantation companies considering the demand for sustainable palm oil. Decent work and economic development concerns feature heavily in this research on negotiating palm oil harvesters’ wage, which is the topic of this investigation.

The Research Project: Palm Oil harvesters’ Wage Negotiations

The colonial strategy that continues to this day
Historical accounts show that accounting was instrumental to minimise all costs, particularly, labour costs, to maximise profits in plantations. The need for cheap labour became a central feature paving way for a strategy to acquire cheap labour to keep operational costs to an absolute minimum, thus ensuring the highest possible profits in the rubber crops going to the shareholders outside of Malaya while the workers who worked on the plantations were working on minimum wage levels.

Collective Bargaining process- The Collective Agreements
Continuing the colonial strategy, plantation workers’ wages were kept at minimum levels through the process of collective bargaining that dated over a century. However, it was only in 1954 when the first national union representing plantation workers emerged with the formation of the National Union of Plantation Workers (NUPW) led negotiations with the Malayan Agricultural Producers’ Association (MAPA), the only employers’ association in the sector. The third party in the process is the government.

The collective agreements were viewed as a mechanism to keep wages at minimal levels, conferring benefits only to employers because it gave them the flexibility to keep the basic wage rate rising slowly while offering workers attractive ‘flexible’ elements that shrunk more than proportionately with a market downturn.

Collective Bargaining: Tussle of Unequal Forces

Union membership declined largely as the result of the conversion of plantation land for other uses (such as housing and industrial purposes) and the influx of foreign labour into the plantation sector. Notably, a major percentage of labour in MAPA plantations is foreign which undermined the Union’s bargaining power. Further, the government influenced the bargaining equation through the 1967 Industrial Relations Act, creating an Industrial Court with the Minister of Labour given the power to refer an industrial dispute to the Court for final and binding arbitration. This undermined the collective bargaining as the arbitration process is not only time consuming but its award is final and cannot be challenged, appealed against, reviewed, quashed or called into question in any court of law. It is also legally binding on both parties and covers all affected workers, regardless of whether they are union members or not. The collective agreement remains effective for a minimum period of three years, and continues to be in force until a new agreement is concluded.

The Eighth Collective Agreement

The Eighth CA was signed in 2003 between the Malayan Agricultural Producers Association (MAPA) and the National Union of Plantation Workers (NUPW). Its term ended in 2005. Thus far, the wage enhancement demands from the union have not been satisfactorily met by the employers. In most cases, the negotiations failed and the case had been taken up in the Industrial Court.

Research Problem

It is not clear how the decisions for wage increases have been made. To what extent is the “lived” experience of the worker considered? To what extent is accounting information considered in determining wages? Do the parties negotiating consider the impact of the wage increase on the profitability of the plantation sector? In order to find the answers, it was necessary to understand the “lived experience” of those affected by the minimal wages and participate in the process to see how NUPW, MAPA and the government conduct the negotiation. Is there an opportunity for the process to derive value from accounting information provided in the published annual reports of Malaysian plantation companies? Fortunately, in the process of finding the answers, the 9th Collective Agreement (9th CA) process commenced in 2008.

Why Action Research?

Action research is a participatory process that enables researchers aspiring to develop practical knowing in the pursuit of worthwhile human purposes, grounded in a participatory worldview believed to be emerging at this historical moment. This project team, comprising four members, was determined to experience the bargaining process in the 9th CA negotiations. Two project members have a plantation background and were immersed in workers’ wage determination research prior to this. Action research brought together action and reflection, theory and practice, in participation with others (NUPW and MAPA) from the beginning. It was a positive step in undertaking the task of enabling plantation workers to gain knowledge of themselves and their current circumstances, to drive social change and social analysis. The team aimed to empower stakeholders and the community to control their own destinies more effectively and to enhance their capacity to do so. This transforms accounting as an active agent and a catalyst of change. The outcomes were very fulfilling for the team.

What did the project team do?

1. The team approached NUPW and had a long conversation with their team. It was gathered that although the Union had been involved in the bargaining process, they did not peruse any accounting information from the plantation companies’ financial statements (FS). The project team decided to work alongside NUPW to prepare the Union’s case for the tribunal. The team suggested that NUPW show the court that the request for wage increase will not impact profitability of plantation companies. Once the buy-in from NUPW was obtained, full cooperation to connect with the plantation workers and management was possible.
2. Several interviews were conducted at various plantations. Plantation management and workers shared their “lived” experience. The team worked closely with union members to understand the work processes to prepare a costing schedule. The team then visited the worker’ homes and saw the conditions of living of the oil palm harvesters.
3. After several tireless months, a simulation programme that can simulate the impact on profitability based on the different price levels of crude palm oil was developed. This exercise was challenging because the published FS were opaque. The FS segment disclosure to compute the harvesters’ wage component in the cost per tonne of crude palm oil produced was perused. The computations confirmed what the NUPW always suspected but had no evidence to prove.
4. NUPW requested the author to be their expert witness in the tribunal which oversees this wage negotiation. Then NUPW counsel then was the president of the Bar council. With permission from the university, the author agreed to be an expert witness and spent hours at the law firm with Union representatives to prepare the documentation.
5. The team visited an oil palm plantation with the judge and both counsels of MAPA and NUPW to also address the plight of the oil palm harvesters. It must be acknowledged that what the delegation saw was unlike what was experienced at other sites;
6. After educating the counsel of how the impact was computed, the team requested to present the evidence using a PowerPoint presentation. The relevant ministry senior official was invited to attend the presentation. All parties were surprised that the impact was negligible.
7. During cross examination, the MAPA counsel expressed to the court that the whole exercise of showing impact was an act in futility because the employers do not deny their capacity to pay. It was felt that this research achieved its purpose because the wage increase was not unreasonable. The tribunal continued for several days. However, the final verdict was in favour of the employers. It was not surprising under the circumstances which will not be discussed here.

Outcomes

It is believed that the engagement with the bargaining process had deepened the understanding of all parties involved. The fallacy that the Union’s request was unreasonable dispelled. The wages were minimal and exploitative. Several actions thereafter provided encouragement that this research had achieved its objective.
• Minimum Wages Order 2018
• Many responsible plantation companies further pledged to go beyond providing minimum wage to the workers by introducing productivity incentives that will enable its workers to earn at least 20% more than the minimum wage.
• Right after the trial, one union member met the author and showed the published annual report of a plantation company where he had marked all the pages that he could obtain information to assist his team to work out their case for the next CA for rubber tappers. This team was satisfied to have carried out action research satisfactorily as the team can educate the stakeholders to get into action to solve their problem.

Some Reflections

This research journey in the oil palm plantation has made the author aware of the consequences of the use of accounting tools, especially with the budget of over 100 years ago. Exploitation is more acutely made possible when a group of people are indentured at a fixed cost, through the use of budgets and other mechanisms, such as CA, so as to keep labour costs, to a bare minimum. The group protecting workers’ right need to be capacity-built.

The purpose of research should be beyond publication. There is a need to address the consequence of past applications that has given rise to a social underclass of plantation workers in Malaysia, who have been and still are, marginalised from mainstream Malaysia. Furthermore, the importation of Indonesian workers to work in the plantations has further compounded the labour class by introducing another class – the “precarious” labour.

Professor Dr Susela Devi K Suppiah 
Sunway University Business School
Email: [email protected]