2016-08-07

Pressure on Wilmar to keep its promises after IPOP disbandment



JAKARTA
(foresthints.news) - The disbandment of the Indonesia Palm Oil Pledge (IPOP) by its own signatories does not exempt the now ex-IPOP signatories from their commitment to clean up their supply chains from deforestation and peatland drainage. The ex-IPOP signatories made a promise to continue implementing their commitments on an individual and independent basis in the wake of IPOP’s dissolution in July this year.

At foresthints.news, we have undertaken to cover certain issues aimed at reminding the ex-IPOP signatories of the promises they have made in respect of forest and peatland protection.

The second point of coverage was to explain to Wilmar International that its position as a major buyer of CPO produced by Provident Agro, a palm oil business group that has plans in the near future to clear intact forests in its two palm oil concessions in Gorontalo province, is irreconcilable with the commitments it has made.

These commitments date back to the day on which IPOP was disbanded (Jul 1), when Wilmar confirmed that it would continue to apply its sustainability policy, which was originally announced in December 2013, even in the absence of the pledge, especially when it comes to cleaning up its supply chains from deforestation.

Having given this assurance, it goes without saying that Wilmar should be willing to sever its supply chain from Provident Agro, given that the two concessions of this supplier concerned consist almost entirely of high carbon stock (HCS) forests.

Provident Agro, which is listed on the Indonesia Stock Exchange (IDX), took out a loan from an Indonesian state-owned bank to establish palm oil plantations in the two concessions with an area of more than 27,000 hectares, using the two concessions as cross collateral for the loan, according to this year’s second quarterly report as posted at the Indonesia Stock Exchange.


Provident Agro’s two concessions in Gorontalo province are dominated by still intact forest cover, as clearly demonstrated by this Google Earth image.

A top official from the Indonesian Environment and Forestry Ministry told foresthints.news in an interview that the disbandment of IPOP by its very own signatories had to be seen in the context of the difficulties these signatories had in cleaning up their supply chains from deforestation, and their ultimate failure to do so.

It is therefore no surprise that NGOs have consistently given Wilmar a failing grade in terms of implementing its sustainability commitments, even more so while the IPOP pledge was supposedly still in effect, despite the Singapore-based company’s claims that it has made progress in allocating significant resources to carry out its sustainability policy.

All stakeholders concerned are thus awaiting some evidence soon from Wilmar that it is indeed sticking to its promise to clean up its supply chains from deforestation. More specifically, its decision about its plan with regard to the clearing of the high carbon stock forests which proliferate in the two concessions belonging to Provident Agro is eagerly anticipated.

Not a popularity contest

In a press release issued by the IPOP signatories on the day of the pledge’s dissolution, they said that they supported the groundbreaking policy initiated by the Indonesian government to impose a moratorium on palm oil plantation expansion.

However, Indonesia's Environment and Forestry Minister, Siti Nurbaya, made the following revelation to foresthints.news on Friday (Aug 5). “We know precisely who is actually supporting the palm oil expansion moratorium as opposed to who is just pretending to support it.”

She added that her ministry had no other agenda than to see through President Joko Widodo’s goal of protecting the country’s forests. “We are going ahead with the palm oil expansion moratorium as this initiative comes straight from the President. It means that what we are currently doing is purely from the President. We are not trying to win a popularity contest."

One day after the President's mid-April announcement of a moratorium on palm oil expansion was made, the minister received a letter from the President’s office containing an instruction to follow up on the substance of the President’s announcement by preparing a legal framework to ensure the successful implementation of the palm oil plantation expansion moratorium.