Greenpeace has launched a new report about the progress the palm oil multinational Golden Agri-Resources (GAR) is making in implementing its Forest Conservation Policy. GAR’s record in Indonesia and Liberia is mixed, Greenpeace says, but the company has made important progress towards ending deforestation within its supply chain.

In the report, Greenpeace points to GAR’s role in developing the High Carbon Stock (HCS) Approach, a method that combines carbon and biodiversity conservation and takes into account community rights and livelihoods to determine which land can and cannot be developed. The Forest Trust (TFT) – a UK-based, non-profit organisation that helps companies and communities deliver their products responsibly – worked together with GAR and Greenpeace on the approach, which is being further developed.

GAR has also excluded 30,000 hectares of potential HCS forest from planned conversion, Greenpeace notes, and agreed to restore areas that were cleared in breach of its no-deforestation commitment.

“However, GAR still has much work to do if it is to ensure that its palm oil is truly responsible,” Greenpeace said. “This must include urgent action to improve social performance – ensuring Free, Prior and Informed Consent (FPIC) and conflict resolution in dealings with local communities.”

Greenpeace says that GAR – which produces about five percent of the world’s supply of palm oil – needs to make additional progress in the quality of its High Conservation Value (HCV) assessments, in transparency, and in the application of responsible practices across its supply chain.

“The company must transform its relationship with local communities. Their rights and livelihoods have to be respected, as part of a process of incentives and partnerships intended to achieve the long-term conservation of HCS forests.”

GAR’s implementation of FPIC with communities in Indonesia has been very poor, Greenpeace says. “In Liberia, there has been a refusal to consistently suspend operations on land where local communities have raised valid objections; this is unacceptable.”

According to Greenpeace, GAR is still trading with groups involved in deforestation and the development of peatland.

Greenpeace urges GAR to join other companies in pressing for the transformation of the industry through the introduction of appropriate legislation.

GAR’s response

In its response to the Greenpeace report, GAR said it was aware of challenges in the implementation of its Forest Conservation Policy. “As part of our policy,” it said, “we have set aside around 30,000 hectares of potential HCV forests in Indonesia for conservation.”

GAR said it took Greenpeace’s feedback seriously and was striving to improve its operational procedures to ensure effective implementation of its policies.

The company said it was building up trust with local communities in its concessions, and was working closely with TFT, who were helping in mediation and dealing with social conflicts.

“We have also implemented a Social and Community Engagement Policy, and uphold our principles of engagement to ensure Free, Prior and Informed Consent.

“In our effort to be more transparent, we have launched the GAR Sustainability Dashboard, which tracks our progress. This is accessible to the public and updated regularly. We are committed to continually strengthening the implementation of our sustainability goals.”

In the first quarter of 2015, GAR will publish the final report of its forest conservation pilot project at the Kartika Prima Cipta concession in West Kalimantan. The project aims to conserve forests that hold large stores of carbon, and to encourage partnerships between communities and the company to protect them.

No-deforestation pledges multiply

GAR was the first palm oil company to commit to stop clearing forests for oil palm.

Much has changed since the days when the company was the pariah of the palm oil industry, and was drawing fire from NGOs for its destruction of forests in Indonesia.

Over the past year, there have been a raft of no-deforestation commitments from palm oil producers, traders, and buyers. More than 20 global food companies have now made no-deforestation pledges and the commitments made by GAR and the world’s biggest palm oil trader, Wilmar International, are stronger than the standards established by the much-maligned Roundtable on Sustainable Palm Oil (RSPO).

The palm oil giant Cargill International has also made a no-deforestation pledge and has joined TFT.

GAR has worked closely with Greenpeace and TFT to develop the High Carbon Stock (HCS) toolkit, which is currently being refined.

In May this year, GAR extended its forest conservation policy – which it launched in February 2011 – across all of the palm oil it produces, sources, and trades.

Recent data from the Indonesian policy development institute Greenomics shows that the company’s pledges are translating into concrete action in the field.

In New York in September, GAR, Wilmar, Cargill, and Asian Agri signed the Indonesia Palm Oil Pledge, an agreement that includes a commitment to greener palm oil development policies, more social benefits for workers, and further cooperation in establishing a mechanism to implement pledges. The signatories have also called on the Indonesian government to do more to protect forests.

Greenpeace says that, in line with this pledge, GAR and the other signatories need to demand full legal protection for peatlands and HCS/HCV forests.

The latest commitment from a palm oil producer came from Singapore-based Musim Mas this month. The company has pledged to eliminate deforestation, peatland conversion, and social conflict from its palm oil supply chain.

The company, which operates plantations in Sumatra and Indonesian Borneo, said its commitment would take effect immediately across all its global operations and extended to all third-party suppliers. It has committed to full traceability to mill level by the end of 2015 and plantation level by December 2016.

Palm oil innovation

GAR has applied to become a member of the Palm Oil Innovation Group (POIG), which was set up in June 2013.

The group describes its focus as “environmental responsibility, partnerships with communities, and corporate and product integrity”. It says the RSPO principles and standards are inadequate.

The POIG’s founding members include the Daabon Group, headquartered in Colombia, New Britain Palm Oil, which operates in Papua New Guinea and the Solomon Islands, Agropalma in Brazil, Greenpeace, RAN, the WWF, and the Forest Peoples Programme.

Greenpeace says that, in order to meet POIG requirements, GAR needs to address outstanding complaints concerning its RSPO New Planting Procedure submissions.

Plantation Act

A report published by Greenomics in October this year found that GAR was effectively protecting HCS areas in seven of its concessions in West Kalimantan, Indonesia, but said that the concession operated by its subsidiary PT Buana Adhitama (BAT) in Central Kalimantan was showing less signs of success, with several block of HCS forest apparently losing cover. “These blocks range from small to relatively large in area, and they are being opened up at an increasing rate.”

Evidence of forest clearance in the BAT oil palm concession. The area had been identified as HCS forest and as belonging to the local community. ©Jufri/Greenpeace, 13/11/2013.

The Greenomics report says GAR has succeeded in protecting most of the HCS forests on its palm oil concessions, “but there is no legal guarantee that such protection can be sustained in the long term”.

The lands that GAR has set aside for conservation are classified as “plantable” by the Indonesian government. Under revision to the Plantation Act in September 2014, any area under a Right of Cultivation permit must be fully cleared and converted for its intended purpose within six years of the licence being granted. Companies are required to cultivate at least 30 percent of the area within three years of getting the licence.

If the land isn’t cultivated, it can then be seized by the state and turned over to an entity that will convert the area. Any company in breach of the Act’s requirements is subject to administrative sanctions, including fines, the suspension of its commercial operations, and/or the revocation of its business licences.

Areas of land set aside for conservation could be given to companies that don’t have zero-deforestation commitments. According to the Greenomics report, such areas cannot be incorporated into the nationwide moratorium because the moratorium only applies to new forestry concessions, not existing ones.

However, if the opening up of HCS forests can be categorised as an activity that causes environmental damage, then the HCS forests set aside by palm oil companies could be conserved as part of the overall effort to prevent environmental damage.

Greenomics says the new Plantation Act has the potential to completely undermine efforts to maintain HCS forests over the long term. “The new Indonesian government has the opportunity, albeit not a straightforward one, to legally support the conservation of HCS forests in oil palm plantation concessions.”

Greenpeace report

Greenomics report