February 15, 2019

Business reasons cited for ongoing peat forest clearing

( - The Apical group (Asian Agri/RGM), according to a new update on its website, has “put a temporary hold on sourcing from Mulia Sawit Agro Lestari (MSAL)” as its palm oil company (PT PEAK) has been unable to commit to stopping the further clearing of peat forests for palm oil expansion.

The MSAL company is citing ‘business reasons’ for its inability to disengage with the destruction of peat forests for continuing palm oil development in its concession in Central Kalimantan’s Katingan regency.

In mid-October 2018, exposed how the MSAL company was still clearing the Bornean orangutan-inhabited peat forests, constituting a clear peat violation. 

A month later, in mid-November 2018, further revealed that the MSAL company was continuing to commit peat violations by clearing and draining peat forests in its concession inhabited by the  critically-endangered Bornean orangutan.

Subsequently, in late December 2018, once again focused on the fact that the MSAL company was still engaged in the destruction of peat forests in its concession which are home to the Bornean orangutan. 

In early January 2019, then went on to report how the clearing and draining of peat forests in the concession were still underway from the end of December 2018 into the first part of January 2019.

The Planet Explorer images below, provided by the spatial team, demonstrate that the MSAL company PT PEAK proceeded to raze the peat forests in its concession, which form a habitat for the Bornean orangutan, from early January into February 2019. 

The ongoing destruction of the Bornean orangutan-inhabited peat forests in the MSAL concession until today proves that Apical’s move to temporarily suspend the sourcing of palm oil from MSAL has yet to produce a positive impact.

Business reasons also? 

This case highlights the continuing flow of MSAL palm oil into global palm oil supply chains despite the ‘business reasons’ its company is using to justify the relentless eradication of peat forests which play host to the Bornean orangutan. 

Along with Apical’s purchasing of CPO from MSAL, ADM (Wilmar’s joint venture partner), Fuji Oil, Musim Mas, General Mills, Kellogg’s, Mars, PepsiCo and PZ Cussons retain supply chains that use MSAL palm oil, as cited in a Mighty Earth report published in January 2019. 

Moreover, Bunge is also said to still be supplying palm oil from MSAL to Nestlé, while Unilever also lists MSAL as one of its palm oil suppliers.

This adds to a growing number of prior cases in which global palm oil players have also used the excuse of ‘business reasons’ for the inability of their palm oil supply chains to remove palm oil from suppliers proven to be involved in the persistent destruction of the Bornean orangutan’s habitat.   

Furthermore, the NDPE policies adopted by these palm oil traders and consumer brands have proven unable to disincentivize palm oil suppliers from wiping out Bornean orangutan-inhabited peat forests.

Absence of law enforcement

The Indonesian Environment and Forestry Ministry has imposed strict sanctions on several palm oil companies proven to be carrying out new peat drainage, a practice legally banned since early December 2016

PT PEAK, however, despite continuing to drain peatlands, has not been hit with a sanction from the ministry. This raises a relevant question as to why there is an absence of law enforcement in this case.

This situation also adds to the list of lessons learned which show that ongoing peat recovery efforts in Indonesia are still being undermined by new peat drainage practices taking place in a number of palm oil concessions, made possible by an absence of law enforcement.