International body freezes expansion of palm oil giant

Copyright: Chris Stowers / Panos

Speed read

  • The RSPO was set up in 2004 to enforce legal standards in the palm oil industry
  • Forest Peoples Programme filed the complaint for land grabbing in October 2014
  • The RSPO ruling may set a welcome precedent to protect indigenous peoples’ rights

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[JAKARTA] The Roundtable on Sustainable Palm Oil (RSPO) has prohibited Singapore-based Golden Agri Resources (GAR) from developing new areas for oil palm plantations in Indonesia, where it is the largest producer of the tropical commodity, for alleged violations of several RSPO norms such as community land rights.

“This is the most explicit ruling regarding violations of the RSPO’s new plantings procedure and principles,” Marcus Colchester, director of the international NGO Forest Peoples Programme (FPP), tells SciDev.Net. “The requirement that GAR cannot acquire or clear any further land while the complaint is resolved sets an important new precedent.”

The non-profit RSPO was founded in 2004 to promote the growth and use of sustainable palm oil through global standards and engagement of stakeholders. According to the World Resources Institute’s (WRI) Global Forest Watch platform, about 12 per cent of global oil palm farming is currently RSPO certified.

Sarah Lake, WRI corporate engagement research analyst, agrees that the ruling is significant.

“Typically, RSPO enforcement is an issue around membership or suspension. I've never heard of them banning future development,” says Lake to SciDev.Net. “It is a significant blow economically [for GAR], as they are counting on this for their revenue streams.”

FPP filed the complaint with the RSPO in October 2014, citing 18 GAR subsidiaries claiming rights to 274,000 hectares of land from communities in Indonesian Borneo.

According to Indonesia’s National Land Bureau (BPN), there are about 4,000 unresolved land conflicts between communities and oil palm companies in the country.

Dave McLaughlin, vice president of agriculture at the World Wildlife Federation (WWF), cites the case of Riau in Sumatra province. “The Ministry of Forestry just said 50 per cent of the oil palm in Riau was planted illegally — that’s two million hectares out of four million hectares.”

When GAR joined the RSPO in 2011, it made headlines when it announced a forest conservation policy that included commitments to respect land rights.

SciDev.Net tried to get comments from the firm which sent its official public statement instead. GAR maintained it is complying with all national laws and regulations and has “voluntarily put on hold land preparation for all new plantings”.

But according to Lake, following national laws is not always enough.

“GAR says they are in government compliance but this does not necessarily mean that they are following best practices as government regulations or land classification change over time. Being in legal compliance is only one piece of the best practices that exist for ensuring sustainable production,” Lake notes.

The ruling may provide impetus for much needed changes in Indonesia’s oil palm sector, which lacks enforcement mechanisms and institutions to monitor palm oil supply chains and properly account for land rights, according to the WWF.

“If Indonesia had good governance and good enforcement, companies would not have to do this supply chain management,” says McLaughlin.

Colchester adds that government officials and elected politicians at both national and district levels are deeply complicit in handing out concessions to companies “even though these overlap community lands and without even informing these communities, let alone giving them a say”.

“Curbing malpractice will not only require legal reforms but also a strong anti-corruption drive,” Colchester says.

This article has been produced by SciDev.Net's South-East Asia & Pacific desk.