SE Asia: Palm oil focus

Rainforest rehabilitation: Astra Agro signs ‘No deforestation’ pledge

By RJ Whitehead

- Last updated on GMT

A Nasa satellite image showing the spread of the 2015 haze
A Nasa satellite image showing the spread of the 2015 haze

Related tags: Palm oil

Environmental groups have welcomed the decision by Indonesia’s second-biggest oil palm grower to pledge to move away from deforestation a year after it hit headlines amid accusations of environmental destruction in its supply chain. 

PT Astra Agro Lestari was singled out by environment groups for rampant deforestation and human rights violations in remote communities last year after drone footage allegedly revealing the practice of forest clearing at one of the company’s concessions went viral.

However, this week the company marked its commitment to preventing deforestation by signing the Indonesia Palm Oil Pledge, which was launched at the United Nations Climate Summit in 2014.

Signatories of the pledge commit to stop all deforestation within their supply chain, promote better livelihoods for smallholders, and make sure Indonesia’s palm oil is economically competitive in a global marketplace.

Companies in Ipop that have made the ‘No Deforestation’ pledge have also committed to work with smallholders to enhance their productivity​,” said Annisa Rahmawati, a Greenpeace Indonesia forest campaigner. 

If these pledges were to be implemented, they would enable smallholders to profit from the global market demand for responsible palm oil, and strengthen the competitiveness of Indonesian palm oil in the global market​.”

Other signatories include regional giants Asian Agri, Golden Agri Resources, Wilmar and Musim Mas, as well as American agribusiness major Cargill.

Annisa said companies that supported the pledge were working to prevent a repeat of an environmental crisis last year that resulted in a dense “haze​” covering much of Southeast Asia as a result of widespread forest burning in Indonesia.

Others, she added, were “hiding behind concern for smallholders and economic figures as an excuse to avoid ending the large scale deforestation and peat drainage which led to last year’s fire crisis​.”

Annisa said she hoped that Joko Supriyono, Astra’s director, who has in the past expressed his support for weakening forest protection laws, would use his influence as chairman of the Indonesian Palm Oil Grower’s Association to prevent a repeat of last year’s haze.

The World Bank estimates that the haze cost Indonesia’s economy US$16bn, or almost 2% of its GDP. The human cost was even greater, with countless people in the region suffering from the impact of breathing toxic smoke particles and gases. In Indonesia alone, Ministry of Health data showed at least 120,000 people sought medical help because of the fires.

More palm oil stories from Southeast Asia...

Certifier launches tougher palm oil standard for extreme compliance

RSPO has introduced a voluntary extension to its criteria for companies that exceed the certification body’s principles for sustainably grown palm oil.


The RSPO Next scheme features stricter requirements in areas such as deforestation, burning, peatland and human rights. 

Eligible growers must demonstrate that at least 60% of their plantations are already compliant with the industry-sponsored body’s core certification criteria while also committing to new RSPO Next policies.

By creating RSPO Next, we are responding to a request from some of our members to provide continuous improvements within the RSPO framework for those ready and able to go further on their sustainability commitments​,” said Darrel Weber, chief executive of RSPO, otherwise known as the Roundtable on Sustainable Palm Oil. 

He added the extension had the potential to become a new industry benchmark for growers that were working to make palm oil production fully sustainable.

Under the terms of RSPO Next, growers must introduce a broader no-deforestation policy. Moreover, they must not develop a palm oil plantations in areas where vegetation and soil contain high stocks of carbon, and they are compelled limit CO2 emissions caused by any form of forest conversion.

Under the regulations, there is to have been no planting on peatland, and oil palm growers must have plans in place to prevent, monitor and combat fire on plantations and around their estates.

RSPO Next also requires oil palm growers to monitor, manage and reduce greenhouse gas emissions across their entire operations, including their mills and other facilities, while also publicly reporting their status and progress. 

Growers must also commit to respecting the rights of smallholders and workers beyond the criteria contained in RSPO’s framework. 

Under the terms of RSPO Next, oil palm growers must engage with their workers to mutually agree human rights terms if there is no national definition of a decent living wage in the country where they operate. It also requires growers to develop outreach programmes to support smallholders with sustainability and business skills.

The certification extension also brings in enhanced transparency and traceability regulations and outlaws the use of Paraquat, a pesticide already banned in the EU.

Palm oil major completes mapping of its entire supply chain

Having mapped the Indonesian palm oil supply chain for the last two years, the world’s second biggest oil palm plantation company, Golden Agri-Resources, says it can now trace its annual supply of more than 7m tonnes of palm oil back to 489 individual mills.


By being able to track its independent supply chain, GAR believes it can more effectively improve the operations of suppliers that are not part of its own, controlled network. 

It says the information will also be offered to its customers so they can assess the environmental impact of the palm oil they purchase.

We see a clear industry trend where buyers want more information on the impact of the palm oil they purchase​,” said Paul Hickman, GAR’s head of palm oil trading. 

If we can trace the oil back to its source we can also engage more effectively with suppliers and share what we have learned in our own operations to help them improve their environmental and social practices​.”

The mapping project began in February 2014 with the support of the Forest Trust in a bid to extend its sustainability process to the company’s entire supply chain.

In addition to buying palm kernels and crude palm oil from independent mils for processing at its eight plants in Indonesia, GAR is a significant producer in its own right, and cultivates more than 480,000 hectares of plantation either directly or through its network of smallholders.

Through this model, the company says it has significant experience in improving the yields of these growers and managing the environmental impact of palm oil.

Related topics: Policy, Supply chain, South East Asia

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