Palm oil in troubled waters with new Sumatra death accusation

10-Mar-2014 - Last updated on 10-Mar-2014 at 15:51 GMT

Related tags Palm oil

Greenpeace has suggested that security forces in a palm oil concession linked to the supply of Wilmar International might have been complicit in the death of a member of the Sumatran indigenous community that has been fighting for the recognition of their land rights for more than two decades.

The member of the Suku Anak Dalam indigenous community allegedly died following an attack involving the security forces on a palm oil concession owned by PT Asiatic Persada, part of the Ganda Group, which supplies Singapore-based palm oil trader Wilmar.

Greenpeace allegations

Five members of the community were attacked by what they described as a group of security personnel and members of the military forces.

“We fear that this tragic death may be the culmination of numerous environmentally and socially damaging actions linked to Ganda,” said Annisa Rahmawati, forest campaigner at Greenpeace Southeast Asia.

Granda is yet to issue a statement in response to Greenpeace’s allegations.

This comes at a difficult time for Wilmar, the Singapore-based palm trader. On top of the allegations levelled at one of its major suppliers, it is also facing a sluggish response by plantations to its moves towards sustainability.

In December Wilmar committed to a so-called “No Deforestation, No Peat, No Exploitation” policy to ensure that it will not buy or sell palm oil products linked to irresponsible practices.

Planters not buying into Wilmar policy

Wilmar is the largest crude palm oil buyer in Sarawak, purchasing almost 50% of the state’s total production of around 3m tonnes annually for its palm oil refinery in Bintulu. It has said it will stop buying oil produced by trees that are planted in forests or swamp lands from 2016.

In February, the company was forced to send out its general manager for sustainability, Simon Siburat, to meet planters in Sarawak to explain its new sustainability policy. This was done in the fear that its suppliers will not comply with regulations in time—and very likely move their sales to other refineries without such stringent regulations.

With more than 80% of Sarawak being composed of peat swamp, planters will struggle to adhere to the new Wilmar policy.

Aside from Wilmar, there are five other companies with refineries in Sarawak: Sime Darby, Sarawak Oil Palm, BLD Plantation, Hoong Cooking Oils and Assar Refinery Services.

A recent report by Malaysian title The Edge has suggested that the market will fill the gap for planters who do not complete the transition away from Wilmar’s proscriptions. This might even provide a business case for the planters to set up their own dedicated refinery, the business newspaper speculated.