Further Informations

The world demand for palm oil is greedy. It is forecast to increase from its present 22.5 million tons a year to 40 million tons in 2020. India, China, the Netherlands and

Germany are the main importers of crude palm oil (CPO), the primary product derived from the palm's fruit and used for a wide range of food and non-food products. The global trade chain counts on funds provided by foreign financial institutions from Europe, the US and Eastern Asia. Sumatra, Kalimantan and West Papua are the main areas in Indonesia where big conglomerates such as the Salim Group, the Wilmar Group and the Sinar Mas Group operate. These are the same conglomerates which control logging, wood-processing and pulp and paper industries.

PALM OIL
Indonesia is the largest palm oil producer in the world and plans to expand its palm oil plantations from the present 7 million hectares to 20 million hectares in the years to come.

WHERE DOES PALM OIL GO?

SELECTIVE LIST OF PRODUCTS IN WHICH PALM OIL AND DERIVATES ARE COMMONLY USED

Food and beverages Frying oil in processed foods (e.g. for chips, doughnuts and fries) Table margarine Shortening for baked goods (cakes, biscuits, pastries etc.) Ice cream Salad dressing Peanut butter Vanaspati (vegetable ghee) Coffee whitener Cosmetics and pharmaceuticals Lipstick Skin lotion Sunblock Shaving cream Bath oil Perfume (as solvent) Cleaning products Soaps Detergents Surfactants Industrial chemical intermediates Fatty acids Fatty amides Fatty alcohol Glycerine Methyl esters Metallic soap Epoxy plasticizers Others
Paint Candles

Agro-fuels
Biodiesel

WHO CONTROLS THE MARKET ?

Palm plantation groups

Buyers

Brands

Sinar Mas Group (Golden Agri Resources - Asia Pulp and Paper, Indonesia/Singapore) The Sinar Mas Group, a subsidiary of the Widjaja family-owned Singapore listed Golden Agri Resources (GAR), is one of Indonesias biggest plantations companies and has been responsible for massive deforestation across Indonesia. In March 2009, GAR claimed to cultivate 396,000 ha of oil palm plantations in Indonesia, making it one of the largest listed vertically integrated oil palm plantations and producers of crude and refined palm products in the world. GAR is also the parent company of Asia Pulp and Paper (APP), Indonesias biggest pulp and paper producer. The companys suppliers control an estimated 1.4 million hectares of forest in Indonesia. In January 2007, Sinar Mas announced plans to invest US$ 5.5 billion with a Chinese state-owned firm to develop oil palm-based biodiesel production, centred on Papua and Kalimantan.

Cargill
(United States)

Gardner Smith
(Australia)

(Singapore)

Kuok

SINAR MAS GROUP

(Indonesia)

Mitsubishi Corporation
(Japan)

Kumpulan Guthrie
(Malaysia)

Unilever
(Netherland/United Kingdom)

Wilmar
(Singapore)

Salim Group is Indonesia's biggest conglomerate with assets including Indofood Sukses Makmur, the world's largest instant noodle producer. The group was founded by Sudono Salim. The Salim Group owns major oil palm plantations and logging concessions. Salim Group has also been involved in Property Development and Leisure Industry for around 30 years. The businesses include hotel and resort development, golf courses, real estates, commercial buildings, shopping centers and industrial estates.

Cargill

(United States)

Gardner Smith
(Australia)

Lotte Trading
(Singapore)

SALIM

Nabisco
(United States)

(Indonesia)

Procter & Gamble

(United States)

Unilever
(Netherland/United Kingdom)

Safil Aclan
(France)

Wilmar International Limited is a Singapore-based investment holding company engaged in providing management services to its subsidiary companies. Wilmar International and its subsidiaries operate palm oil plantations and refinery mills. They are also involved in processing and merchandising a range of edible oils and laurics-related products.

Savola
(Saudi Arabia)

Nestl
(Switzerland)

WILMAR
(United States/China)

VVF
(India)

Procter & Gamble

(United sates)

Unilever
(Netherland/United Kingdom)

NAPAN & RISJADSON PT PP London Sumatra Indonesia Tbk. (LonSum)

The group exports much of its Crude Palm Oil (CPO) production via North Sumatra.. Napan group is focused on energy mining and plantation sector in Indonesia. The groups pilot program includes an established plantation of more than 200HA, which is currently generating fuel for equipment and haulage truck.

Cadbury Shweppes
(United Kingdom)

NAPAN & RISJADSON (Indonesia)

Ito Shoji Co.
(Japan)

Wilmar
(Singapore)

Cargill
(United States)

Gardner Smith
(Australia)

BANKS INVOLVED
Behind the corporates destroying the rainforest are the banks financing them.

The major banks investing in Indonesian Palm oil

THE RSPO (Round table for Sustainable Palm Oil)

WHAT IS RSPO? The RSPO is an association created by organizations carrying out activities in and around the entire supply chain for palm oil to promote the growth and use of sustainable palm oil through cooperation within the supply chain and open dialogue with its stakeholders. The RSPO aims to bring together members of the community working on palm oil to discuss and to cooperate towards this common goal. ( http://www.rspo.org/General_Information_on_the_RSPO.aspx) That is the official definition, but what is RSPO in facts? What is it hiding? Who is involved and in which context? Established in 2001, the RSPO was designed to set clear ethical and ecological standards for producing palm oil, so no one would have their land stolen from them or have their forests demolished. Over the years, the list of members has grown so it now includes familiar global brand names such as Unilever, Nestle, Tesco, and Cadburys as well as other less well-known companies Cargill, ADM, Duta Palma, Sinar Mas, Asian Agri and other palm oil producers and traders. WHY AN ORGANISATION WHICH REGULATES PALM OIL PRODUCTION IS NEEDED? Basically, the industrial production of palm oil is closely tied to large-scale monocultures which require the use of large quantities of inputs such as fertilizers, herbicides and pesticides, with the consequent impacts on the health of workers and local residents and the pollution of the environment. Palm oil production is engaged in widespread illegal deforestation and peat land clearance in Indonesia, practices which release vast amounts of carbon dioxide into the atmosphere and help Indonesia win the title of the worlds third largest greenhouse gas emitter, after China and the US. THE RSPO CRITERIA The key minimum-criteria for partial certification (set out in section 4.2.4 of the RSPO Certification Systems document) are: In facts the RSPO stipulates that cutting down primary rainforest for converting the land to palm tree monoculture in NOT sustainable. It does however also stipulate that converting a secondary (degraded) forest for palm tree monoculture is considered as SUSTAINABLE. In short, any primary forest of Indonesia can first be logged by the wood industry to then become eligible as a sustainable monoculture of palm trees producing sustainable palm oil. No significant land conflicts. No replacement of primary forest or any area containing High Conservation Value. No labor disputes that are not being resolved through an agreed process. No evidence of non-compliance with law in any of the non-certified holdings.

It is probably safe to say that the RSPO is a beautiful example of greenwashing. The stamp of the WWF makes it even greener. REALITY OF FACTS It is obvious that the majority of the members and affiliate members of the RSPO do not question the expansion of oil palm monocultures. On the contrary, they are actively seeking to boost both production and consumption. While it is true that many aspects of the production process can be improved, it is equally true that the model as a whole, even with these improvements, continues to be unsustainable. RSPO member companies operating in Indonesia are able to use the organization to burnish their green credentials while simultaneously destroying rainforests with impunity. Its members include some very well-known names that are typically associated with negative social and environmental impacts (Cargill, Unilever, Cognis, the International Finance Corporation, British Petroleum, Syngenta and Bayer). Members do not respect their commitments Membership of the RSPO alone is not sufficient proof of a companys environmental credentials. Currently the RSPO criteria only include vague guidelines on avoiding establishment palm oil plantations on peat lands. There are also no criteria on greenhouse gas emissions during the production of palm oil. Moreover, while a supply of sustainable palm oil (CSPO) exists and is available, only 10 of the 59 member companies of the RSPO actually purchase it and use it. The exemple of Sinar Mas, active RSPO member In 2008, Sinar Mas branded itself as Indonesias largest oil palm plantation company. In December 2009 Unilever, the worlds largest palm oil user, announced the suspension of its contracts with Sinar Mas in light of the evidence of greenwashing. However, major brands including Nestle, Kraft, and Procter and Gamble continue to buy Sinar Mas palm oil. So if within the palm oil industry theres awareness of the potential damage they could cause to both people and the environment, why are we still finding evidence of wholesale forest destruction? We still can found bulldozers belonging to Sinar Mas clearing huge tracts near Jayapura in Papua, and yet Sinar Mas is an RSPO member. Theres obviously something wrong somewhere. No restrictions or penalty from RSPO As it currently exists, its standards and principles are too weak to really do any good. The main cause of this issue is that theres no danger of actually being penalized in any way by the RSPO. What kind of credibility does the RSPO have if it turns a blind eye when its members are clearing huge areas of forest or draining and burning peat lands? Future Scenario for the RSPO If the RSPO really wants to be taken seriously on sustainability, then it must take immediate steps to prohibit its members from converting any more forest and peat land into plantations. Without such a move there can be no sustainable palm oil production in South East Asia; rather the RSPO will be creating an illusion of sustainability while pursuing the expansion of plantations to supply the demand created by the countries setting mandatory targets on bio-fuels.

PROPOSITIONS Reality on the field shows that something drastic needs to be done, like an immediate moratorium on all deforestation in Indonesia while theres still some forest worth saving. THE MORATORIUM WOULD Provide the political space for the establishment of mechanisms to permanently protect important forest and peat land areas. Encourage producers to priorities all expansion of palm oil plantations on non forest areas and eroded lands.

This call for a moratorium is supported by major palm oil users, like Unilever and other companies. Hopefully, these large influencial corporates can push the RSPO to support the moratorium and pressure the Indonesian government to take urgent action. The Indonesian president, Susilo Bambang Yudhoyono, is the only one who can put this moratorium in action. THE RSPO MUST: THE EUROPEAN GOVERNMENTS MUST: PALM OIL CONSUMERS MUST: PALM OIL PRODUCERS MUST: INVESTORS WHO FINANCIALLY SUPPORT THE PALM OIL SECTOR MUST: Stop all financing of palm oil companies until they implement a moratorium on further forest clearance. Implement an immediate moratorium on forest and peat land clearance. Use only waste land to expand further their plantations. Stop consuming palm oil as much as possible. Demand that the brands using palm oil support a moratorium on forest and peat land clearance Demand that the brands using palm oil immediately cancel contracts with any destructive company like Sinar Mas. Support the call for a moratorium on further deforestation and peat lands clearance. Allocate funds to protect forests and peat lands. Refrain from policies that stimulate the expansion of the palm oil industry, like the mandatory target for bio-fuels, and subsidies for palm oil in electricity production. Take concrete action to stop deforestation and peat land conversion for sustainable oil palm expansion. Ensure that its members prevent land disputes, and proactively resolve current conflicts. Must give itself the means to punish members who do not follow the guidelines.

Therefore, what is most important now is to intensify these struggles and campaigns to curb the advance of this destructive industry. We need swift action to bring deforestation to an end.