December 20, 2018

New sanction imposed as NDPE policy still on paper only

( - The Indonesian Environment and Forestry Ministry has concluded that major palm oil buyers and traders that have already adopted a No Deforestation, No Peat, and No Exploitation (NDPE) policy have yet to change their corporate culture in that their supply chains remain linked to peat violations.

A set of legal evidence highlights the fact that some palm oil companies already hit with sanctions by the ministry due to their peat violation practices are suppliers to the major palm oil buyers and traders which have adopted an NDPE policy.

This situation confirms that global palm oil supply chains are not yet serious about adhering to an NDPE policy, especially in terms of legal compliance, given that the practice of new peat drainage has been banned in Indonesia since early December 2016 by President Joko Widodo.

These key conclusions were delivered by the Ministry’s Law Enforcement Director General Rasio “Roy” Ridho Sani at a discussion forum at the ministry building on the effectiveness of the NDPE policy and its connection with legal compliance.

Roy said that he had presented these key points at COP24-Katowice, Poland. “It’s important to share these issues as real lessons learned from the ministry’s law enforcement efforts with regard to the legal compliance of NDPE palm oil supply chains,” he added.

He discussed these matters at a time when a new sanction has been recently imposed by the ministry against PT PWA earlier this month after the company was found to have committed peat violations.

This palm oil company was formerly owned by the Triputra group, and subsequently sold to Pundi Lahan Khatulistiwa.

The photos below depict how PT PWA is clearing and draining peat forests in its concession in West Kalimantan’s Kubu Raya regency, which also forms a habitat of the critically-endangered Bornean orangutan.

The supply chains of Nestlé, Unilever, Mondelez, Mars, Bunge, ADM, Cargill, PepsiCo, Wilmar and Sime Darby, among many others, have been proven to be linked to the peat violations carried out by the Pundi Lahan Khatulistiwa company.

“This is one of the new cases (PT PWA) that show how major palm oil buyers and traders are still linked to a supplier which is far away from fulfilling its legal compliance,” Roy asserted.

Beyond legal compliance?

The director general went on to give a reminder of the public statement conveyed by Environment and Forestry Minister Siti Nurbaya in which she cautioned that NDPE companies have to be consistent in keeping their promises on the ground.

At the end of January this year, the minister stressed that companies which have adopted an NDPE policy should be complying on the ground level, and not just making mere commitments on paper.

“The supply chains of major palm oil buyers and traders should already be beyond legal compliance, but in reality this has not happened,” Roy lamented.

In addition to cases related to new peat development in which sanctions have been imposed on a number of global palm oil suppliers, he also spoke about sanctions issued in legal cases involving peat fires.

“The law enforcement actions taken by the ministry regarding peat fire cases are also not an easy job. Nonetheless, we are gaining victory after victory in the courts,” Roy enthused.

“Those palm companies involved in legal cases concerning peat fires have also been found to be linked to the palm oil supply chains of major palm oil traders and buyers which have adopted an NDPE policy,” he said in closing.