Palm Oil Giant Wilmar promises to improve practices after complaints

PalmOil Giant Wilmar promises to improve practices after complaints

2 February 2008

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Indonesia — ‘The ultimate proof will be the practices onthe ground’ – After a joint complaint by Friends of the Earth and Indonesian NonGovernmental Organisations (NGO’s), palm oil giant Wilmar International hasadmitted violating its own policies on plantation development in Sambas,Indonesia. Wilmar has announced measures to improve its sustainabilityperformance. Friends of the Earth welcomes this step from Wilmar, but willcontinue to monitor Wilmar closely. ‘The ultimate proof will be the practices onthe ground and Wilmar’s interaction with local communities’, says Anne vanSchaik, from Friends of the Earth Netherlands (Milieudefensie).

In a reaction made public today, Wilmar admits its shortcomings in three casesin Sambas, where policies concerning land acquisition, compensation matters andenvironmental impact assessments were violated. Wilmar says it regrets that landclearing and planting activities took place based on irregularly issuedplantation operating permits. Milieudefensie is disappointed that Wilmar doesnot acknowledge its role in illegal logging.

In a report by Milieudefensie and Indonesian partners in July 2007, three Wilmarplantations in Sambas, West Kalimantan,(1) had been found to be involved in landright conflicts, working without approved environmental impact assessments,lacking due consultation with local communities and being involved indeforestation and forest fires.(2) With the findings of the report,Milieudefensie approached palm oil buyers and financiers of WilmarInternational, and started the first procedure at the newly establishedgrievance panel from the RSPO.

Concerning grievances of affected communities in Sambas, Wilmar says it willabide by a mediation process from the Compliance, Advisory and Ombudsman Office(CAO) of the International Finance Corporation, one of Wilmars financers, tofind a resolution acceptable to all parties. The IFC has send its ombudsman toSambas following a complaint letter from several local and international NGO’sto the IFC.(3)

To address the problems, Wilmar says it has set up a committee, regionalsustainability departments and audit- and monitoring procedures to make sure theprinciples and criteria on sustainable palm oil as defined by the RSPO will beadhered to down to operational level. Special measures would be taken to protectbiodiversity and high conservation value forests. According to Wilmar, noplantation development will take place without free, prior and informed consentof local communities.

Wilmar is one of the biggest players in the palm oil sector worldwide, with aland bank of 573.000 hectares and far ranging plans to become a major supplierof palm oil for the upcoming biodiesel market. Two-thirds (370 000 ha) of itsland bank held in Indonesia has yet to be cleared and planted. Friends of theEarth is concerned about these expansion plans. Anne van Schaik: ‘We aredetermined to prevent further deforestation, peat land degradation anddisplacement of indigenous peoples for the expansion of monoculture oil palmplantations’.

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