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   Indonesia’s   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),   Indonesia’s   biggest   pulp   and   paper   producer.   The   company’s   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)  

 

Nestlé  
(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 group’s 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   Cadbury’s   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  world’s  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  company’s  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  Indonesia’s  largest  oil  palm  plantation  company.   In   December   2009   Unilever,   the   world’s   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  there’s  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.  There’s  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  there’s  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  there’s  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.        

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