NDPE companies remain linked to destructive supply chains

(foresthints.news) - Five top palm oil business groups, all of which have adopted a No Deforestation, No Peat and No Exploitation (NDPE) policy, need to prove their power to prevent their supply chains from being tainted by the ongoing destruction of the habitat of the critically-endangered Bornean orangutan. 

These five business groups are ADM GlobalApical (Asian Agri), CargillIOI and Wilmar, whose supply chains continue to be linked to the supplier PT BHD. This palm oil mill, in turn, is still closely associated with a palm oil company (PT PSM) which is aggressively clearing the habitat of the Bornean orangutan in West Kalimantan’s Ketapang regency.

A legal verification undertaken by foresthints.news concluded that PT BHD indeed remains linked to PT PSM despite an announcement that it was divesting its shares in the palm oil company at the end of September 2017. 

In line with this, as reported by foresthints.news at the end of October last year, Apical’s grievance update posted information it had received from PT BHD to the effect that this company no longer had any linkage to PT PSM since its share divestment in September 2017.

Wilmar, in its grievance update from December last year, also posted the same information. 

However, these two posts contrasted with the findings of the legal verification carried out by foresthints.news. The latter referred to legal documents derived from authorized sources which revealed that close links between PT BHD and PT PSM are in fact still in place. 

If the five NDPE-adopting companies continue to act impotently by failing to take concrete actions, then their adoption of an NDPE policy is certainly questionable given that, to date, they have been completely unable to clean up their supply chains from clearing the Bornean orangutan’s habitat in the PT PSM concession as shown in the USGS Landsat 8 images below, taken from the LandViewer, as reported by foresthints.news (Jan 5).

Matching verification results

In addition to foresthints.news, Eric Wakker, Co-Founder of AidEnvironment Asia, also conducted a legal verification of the links between PT BHD and PT PSM in the wake of the announced divestment by the former in the latter - reaching essentially the same conclusions. 

“We believe that PT PSM is ultimately under the Bintang Harapan Desa / Sepanjang Group,” he asserted in a written statement to foresthints.news (Jan 7).

This situation prompted the following appeal from Wakker. “So all I can think of now is to ask buyers to put into writing that they will never buy from this company (PT BHD).”

He also encouraged the Indonesian Ministry of the Environment and Forestry to show its concern by ending the ongoing clearing of the orangutan’s habitat in the PT PSM concession. 

In mid-April 2016, President Joko Widodo announced a moratorium on palm oil plantation expansion, prohibiting the clearing of natural forests which retain good forest cover. 

Nonetheless, at the time of this news report’s posting, the President’s announcement has yet to be backed up by the release of any corresponding legal basis. 

To recap, PT PSM, which obtained a palm oil plantation development permit in May 2013, was initially owned by Genting Plantations (GenP). Wilmar announced publicly in its update grievance at the time that GenP had committed to not developing HCS forests scattered among the landscape of the PT PSM concession. 

Unfortunately however, this commitment made by GenP, one of Malaysia’s most powerful companies, proved to be a mere promise on paper, seeing that it subsequently sold PT PSM, effectively relinquishing any responsibility for its commitment.

There have been differing reactions to GenP's sale of PT PSM. Surprisingly, the Musim Mas Group indicated that it respected GenP's move, while the decision was considered a 'dirty old trick' by Washington-based CSO Mighty.