Palm traceability sector (update 3a): GAR/Sinar Mas back in NGO focus, TFT suspends Golden Agri takes (and hours later a new chief sustainability officer is appointed for the plantation giant - Agus Purnomo)

21 May 2015: TFT suspends Golden Agri takes (and hours later a new chief sustainability officer is appointed for the plantation giant - Agus Purnomo)
 
Key issues and questions arising from Golden Agri / PT Smart's present situation:

• Despite innovative industry attempts to promote traceability as a more inclusive solution (versus RSPO which struggles to include small producers and independent smallholders) while heightening key pledges such as "no deforestation, no peat and no exploitation," recent events raise the question of whether producers can live up to promises ("hastily made" according to many key industry players). 
• Is palm oil entering a renewed phase of boycott risks? At the SIIA Singapore Dialogue, several IPOP members sat on a panel where Wilmar made a public pledge that it would (if told by other IPOP members) stop buying from any "errant suppliers" who were unable to make the necessary upgrade moves (and if it found such, it would stop buying; tell its fellows and request they would do likewise). Other panelists suggested more focus on constructively working with suppliers for improvement rather than boycott. If agreed, the IPOP "supplier boycott" proposal should give some teeth to the group. But it seems that IPOP members are not clear of the boycott risk themselves; with Golden Agri, a lead member itself now facing RSPO censure and TFT suspension.
• Many industry players regard the shift to TFT B2B traceability as part of a processor-trader led move to find a more business-ready solution (that now seeks to shift the centre of gravity to refinery "supply sheds"; away from the RSPO mill and supply base P&C and RSPO's relatively costly physical supply chain SCCS outlook). The palm oil supply chain has since the mid 2000s been spending time and effort via NGO service providers, auditors and their newly established sustainability teams.
• Industry watchers have been concerned about how widely known implementation gaps among the top highly rated traceable plantation groups will be treated by the broader NGO sector. Clearly, business life is hardly straight forward and the current issues suggest that there is no place for over-confidence and complacency while using new solutions. It seems we are entering a "third wave" where social issues and implementation will be primary - but have the big plantation groups put in enough resourcing to upgrade their implementation efforts to their pledges?  

Some background on IPOP group here: Tuesday, October 7, 2014 Indonesia Palm Oil Pledge (IPOP) /khorreports-palmoil/2014/10/indonesia-palm-oil-pledge.html. At the SIIA dialogue we had a useful chat with a Catapult Campaigns staffers who confirmed their key role in the New York Declaration and IPOP. On the risk of large dominant players establishing boycotts on smaller suppliers (raising question on economic interest suppression), there was no answer. A key consideration is on campaign advocacy efficiency and impact.

News link:

Golden Agri takes another hit as sustainability guru suspends its membership by Philip Jacobson May 20, 2015; The charity that Indonesia's Golden Agri-Resources has enlisted to devise and implement its zero-deforestation and community-engagement commitments suspended its cooperation with the palm oil giant yesterday, following "several breaches" of the policies they had designed together, according to The Forest Trust (TFT), which helps companies run responsible supply chains. A few hours after TFT announced the suspension, Singapore-listed Golden Agri said in a statement that its chief sustainability officer, Peter Heng, had resigned "to pursue new career opportunities." His replacement is Agus Purnomo, who has headed one of Golden Agri's Indonesian subsidiaries, Sinar Mas Agro Resources and Technology (Smart). Smart's own subsidiary, Kartika Prima Cipta, became the subject of a formal complaint against its operations last year after Golden Agri filed to expand its plantations in 18 of its subsidiaries including Kartika Prima, despite evidence that Kartika Prima had taken community land without residents' informed consent, failed to properly conduct a high-conservation value (HCV) assessment and more. The grievance was lodged by the Forest Peoples Programme (FPP), a UK-based NGO, with the Roundtable on Sustainable Palm Oil (RSPO), the industry's largest voluntary certification scheme. Though TFT was vague in its announcement, the suspension is almost certainly a response to what is apparently seen as Golden Agri and Smart's lackluster handling of the RSPO complaint, which takes on additional importance because Kartika Prima is piloting Golden Agri's sustainability commitments. The RSPO upheld the complaint in March and earlier this month prohibited Golden Agri from "acquiring or developing any new areas" pending its resolution.... Read more: http://news.mongabay.com/2015/0520-jacobson-tft-suspends-golden-agri.html#ixzz3aj9U4zFv


16 May 2015: It's not plain sailing for plantations who've gone in with the "second wave" of heightened "three nos" on peat, deforestation and exploitation

It's not plain sailing for plantations who've gone in with the "second wave" of heightened "three nos" on peat, deforestation and exploitation. Sector risk is of a "third wave" of rather tough to resolve social issues, which may be heightened due to the HCS / high carbon stock regimes coming into play.

The Roundtable on Sustainable Palm Oil (RSPO) has prohibited Golden Agri-Resources (GAR), one of its most prominent members, from "acquiring or developing any new areas" pending the resolution of a formal complaint against the palm oil giant in Indonesia's West Kalimantan province.  The decision by the RSPO, the world's largest voluntary certification scheme for palm oil, is a stern directive from an organization that has been criticized for failing to take action against companies that flout its standards....  Read more: http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj<<a%20href=>">http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj

16 Jan 2014:

Khor Reports comment: Plantation partnership deals with some NGOs does not preclude good implementation and monitoring by other NGOs. GAR/Sinar Mas had faced boycotts and enlisted TFT-Greenpeace to help (Wilmar is now also signed up on TFT-Greenpeace HCS Approach and other principles). Now, plantation planners should prepare for larger set-aside areas for their new plantings.

The latest news on GAR from a study by Forest Peoples Program / FPP (see news links) highlights some problems of high carbon stock (HCS)/social implementations of the new policies of TFT-Greenpeace for GAR. GAR said, “We thank FPP for their additional findings which have assisted our own full field audit of PT KPC, conducted in partnership with The Forest Trust.” Separately, APRIL and RGE are under pressure from Greenpeace.
News: http://www.eco-business.com/news/golden-agri-april-under-fresh-scrutiny-unsustainable-practices/ 

ESG / socially responsible investing (update 1a): RGE/APRIL and Roger Federer-Credit Suisse, Singapore Urges SEA Lenders to Better Screen Palm Oil Investment, Conservation International and Hollywood stars

Environmental and social governance or socially responsible investing is becoming an increasingly important topic as NGO advocacy campaigning on this steps up. We attended a recent talk in Singapore. Not surprisingly as the financial center for Southeast Asia, it was a core topic.

Read here: Singapore Dialogue (update 1a): SIIA / Simon Tay dialogue in Singapore centered on palm oil sustainability, Indonesia extends moratorium, ASEAN banks under WWF spotlight /khorreports-palmoil/2015/05/attended-siia-simon-tay-dialogue-in.html

Key recent reports include:

• WWF: ASEAN regional banks and investors behind on Environmental, Social and Governance standards Posted on 13 May 2015; Singapore – A WWF report finds an alarming gap between regional ASEAN financial institutions and the environmental, social and governance (ESG) standards adopted by their international counterparts. 
• TUK-Profundo report on top 25 tycoon-owned Indonesia palm oil groups and their financiers.

 ..............

20 May 2015: Singapore Urges SEA Lenders to Better Screen Palm Oil Investment; Roger Federer-Credit Suisse answer on RGE/APRIL funding query and it's also important to note that USA NGOs have become more active in the soft commodity sector of Southeast Asia with notable Conservation International campaign with Hollywood stars as spokespersons.

Singapore Urges SEA Lenders to Better Screen Palm Oil Investment By Erwida Maulia on 09:07 pm May 17, 2015; Singapore. The Singaporean government has called on financial institutions operating in Southeast Asia to exercise caution in funneling funds to palm oil producers, saying scrutiny on the sector continues to intensify with recurring problems in transboundary haze. Banks have acted as an important source of capital for the region’s palm oil industry, Singapore’s Minister for the Environment and Water Resources Vivian Balakrishnan said last week. Citing a 2010 report by BankTrack, he said lenders provided an estimated 24 percent of the total financing needed for the sector globally, with more than $50 billion invested in the Malaysian and Indonesian palm oil sectors alone during the decade prior to the release of the study. “The number has grown significantly since then. And this includes local sources of capital from within Indonesia and Malaysia,” Balakrishnan said in a keynote speech during the second annual Singapore Dialogue on Sustainable World Resources held last Wednesday. With the recurring issue of transboundary haze, he added, calls have intensified for companies and individuals “all the way down” the supply chain to be held accountable for deforestation — the main culprit behind recurring forest fires in Indonesia and haze affecting neighbors Singapore and Malaysia. “Due to the environmental scrutiny and the campaigns by environmental NGOs, banks have now also become part of the watch list,” the minister said. “And my plea to you, therefore, is please pay attention to this and remember the questions will be asked not only of the companies involved, but also of the financiers and the banks behind the industry.” Balakrishnan added that lenders and other financial institutions are now expected to be more responsible in conducting background checks on palm oil companies. It is not enough to merely see whether their clients would be able to pay their loans and interest rates, he said. How the companies derive their resources, their methods of production, the environmental, social and even political risks they face all must be assessed before banks decide whether they should invest in the business. “These [steps] have to become part and parcel of standard due diligence,” Balakrishnan said.......
http://thejakartaglobe.beritasatu.com/news/singapore-urges-sea-lenders-implement-eco-friendly-policies/

Roger Federer encourages rainforest campaigners 19.05.2015; Tennis star asks Credit Suisse to review the bank’s business relationship with Indonesian pulp and paper group RGE/APRIL (BASEL, SWITZERLAND / PULAU PADANG, RIAU, INDONESIA) Tennis star Roger Federer is calling on Credit Suisse, the Swiss bank, to review their business relationship with RGE/APRIL, an Indonesian pulp and paper group that is responsible for the wide-spread clearcutting of rainforests in the Indonesian province of Riau (Sumatra). Federer was approached last month by Isnadi Esman and Woro Supartinah, two Indonesian activists who had travelled to Switzerland to protest against a 50 million Euro loan granted by Credit Suisse to RGE/APRIL.  “I have learnt about your letter to me, outlining the difficult rainforest situation in Riau”, Federer writes to the Indonesian campaigners. “I take your concerns seriously. In response to your letter and as ambassador for Credit Suisse, I would like to emphasize that I will advocate for and have complete trust that they analyse such issues thoroughly, evaluate all options and that their decisions are well thought out.” The tennis star continues: “Additionally, I encourage you to continue the ongoing dialogue with Credit Suisse in order to minimize any sustainability issues and increase the common understanding.” On 24 April 2015, Isnadi and Woro informed Credit Suisse’s top management on RGE/APRIL’s conduct in Riau at the bank’s annual general meeting in Zurich. The bank’s Chief Risk Officer, Joachim Oechslin, promised to personally vet every potential future transaction with the Indonesian group. RGE/APRIL has been accused of illegal logging, peatland clearing and numerous human rights violations in their operations in Riau. Credit Suisse, together with a number of Chinese banks, are the Indonesian group’s main financial backers.

 http://www.bmf.ch/en/news/roger-federer-encourages-rainforest-campaigners

Conservation International. US NGO with Hollywood stars. Published on 5 Oct 2014: Julia Roberts, Harrison Ford, Kevin Spacey, Edward Norton, Penélope Cruz, Robert Redford and Ian Somerhalder all join forces to give nature a voice. Watch the films and take action at http://natureisspeaking.org Youtube vids here: https://www.youtube.com/results?search_query=conservation+international

• Nature Is Speaking – Edward Norton is The Soil | Conservation International (CI) by ConservationDotOrg 317,373 views 1:26
• Nature Is Speaking – Penélope Cruz is Water | Conservation International (CI)   by ConservationDotOrg  208,102 views 1:29 
• Nature Is Speaking – Kevin Spacey is The Rainforest | Conservation International (CI)   by ConservationDotOrg  405,505 views 1:46 
• Nature Is Speaking – Harrison Ford is The Ocean | Conservation International (CI)   by ConservationDotOrg  550,312 views 2:04 
• Nature Is Speaking – Lupita Nyong'o is Flower | Conservation International (CI)   by ConservationDotOrg  439,588 views 1:36 
• Nature Is Speaking – Robert Redford is The Redwood | Conservation International (CI)   by ConservationDotOrg  145,790 views
• Nature Is Speaking – Ian Somerhalder is Coral Reef | Conservation International (CI)   by ConservationDotOrg  285,954 views 1:37 
• Nature Is Speaking – Julia Roberts is Mother Nature | Conservation International (CI)   by ConservationDotOrg  1,380,592 views 1:59 
• Nature Is Speaking: Tang Wei is Flower - 大自然在說話:湯唯聲演「花」| 保護國際基金會 (CI)   by ConservationDotOrg  5,727 views

HCS vs HCS vs HCS?: Greenpeace led HCS Approach toolkit approved; Greenpeace promotes its HCS Approach as a "tested and leading methodology"

The HCS approach is getting rather contested and confusing as companies straddle different areas.  One is led by Greenpeace is the HCS Approach (apparently done largely by the NGO via pilot study with Golden Agri Resouces and possibly with a handful of other corporate sector players). Another (still ongoing) is via the Sustainable Palm Oil Manifesto Group (SPOM) led by academics and think tankers. At the RSPO, the equivalent is the GHG emission reductions policy in its New Plantings Procedure (we're not sure who vetted the parameters in its calculator).


19 April 2015: Greenpeace led HCS Approach toolkit approved in April

Palm oil companies, NGOs endorse new deforestation-limiting toolkit by  Morgan Erickson-Davis April 06, 2015; Forests not only house many of the world's species, but also much of its carbon. Now, a toolkit has been developed by a group of companies and organizations with the aim of helping other companies and NGOs identify High Carbon Stock (HCS) forests. The toolkit was endorsed last week by major NGOs and plantation companies in Singapore.... http://news.mongabay.com/2015/0406-mrn-morgan-new-toolkit-tells-companies-where-they-should-not-clear.html#ixzz3XiaxE0ls
HCS Approach toolkit here: http://highcarbonstock.org/the-hcs-approach-toolkit/

12 December 2014: Greenpeace promotes HCS Approach as a "tested and leading methodology"

Jokowi's Call for Ecological Reform Reaches Palm Oil Firms; Jakarta Globe  - ‎Dec 9, 2014‎;  "Following last week's strong pro-peatlands and forests commitment by newly inaugurated President Joko Widodo, two of the world's largest palm oil producers and traders have announced policies to address the criticism of deforestation in their supply ...The High Carbon Stock Approach, (Greenpeace) the global environmental group argues, is a tested tool that identifies degraded areas suitable for plantation development and forest areas that merit protection to maintain and enhance carbon, biodiversity and social values.... It is being overseen and further refined by the multi-stakeholder High Carbon Stock Approach Steering Group, which involves international non-governmental organizations including Greenpeace as well as palm oil producers Cargill, Agropalma, Wilmar, New Britain Palm Oil, Daabon and Golden Agri Resources, and one of the world’s largest pulp and paper companies Asia Pulp & Paper (APP)...... Both Musim Mas and KLK are part of the Malaysia-based Sustainable Palm Oil Manifesto (SPOM), an industry initiative that has commissioned further carbon study. In their new policies, the companies say they will adopt the outcomes of that study after 2015...."; http://thejakartaglobe.beritasatu.com/news/jokowis-call-for-eco-reform-reaches-palm-oil-firms/

Palm sustainability news

Fibre production drives deforestation in Indonesia - Study debunks belief that palm-oil plantations are main culprit by Natasha Gilbert, 21 July 2014; http://www.nature.com/news/fibre-production-drives-deforestation-in-indonesia-1.15589#%2Fb1; "....Palm-oil plantations are generally though to be the main driver of deforestation in Indonesia, which is home to the world’s third-largest tropical forest and has the highest rate of forest loss. But fibre plantations — where species such as Acacia mangium are grown for use in pulp and paper production — now seem to be the main culprit.
Of the 14.7 million hectares of forest destroyed between 2000 and 2010, 12.8% was removed for fibre plantations, 12.5% for logging and 6.8% for palm-oil plantations; the remainder was removed for mixed concessions and mining1. All told, 45% of forest loss during the period occurred on land leased to industry. “Palm-oil agriculture has borne the brunt of the blame for causing deforestation in Indonesia,” says Lian Pin Koh, a conservation ecologist at the University of Adelaide...."

The world’s largest palm oil players commit to funding High Carbon Stock Study, Kuala Lumpur, 30 July 2014 - "The world’s largest palm oil players are jointly funding a comprehensive 12-month study that will:

• clearly define what constitutes a High Carbon Stock (HCS) forest;
• provide practical guidance on how to delineate HCS forests on the ground; and
• establish thresholds for HCS that take account of regional socio-economic conditions and opportunities.

Malaysian companies IOI Corporation Berhad, Kuala Lumpur Kepong Berhad and Sime Darby Plantation, Indonesia’s Asian Agri and Musim Mas Group, and global agribusiness groups Cargill and Wilmar International, are funding the study and have committed to adopt the study’s findings in all their operations and supply chains..... The HCS study is a key component of the Sustainable Palm Oil Manifesto, which was signed by oil palm growers Sime Darby Plantation, IOI Corporation Berhad, Kuala Lumpur Kepong Berhad, Musim Mas Group, and Asian Agri, as well as global palm oil trader Apical and global agribusiness group Cargill. The Manifesto includes a commitment to no deforestation, creating traceable and transparent supply chains, and protecting peat areas, while ensuring economic and social benefits for the local people and communities where oil palm is grown.... To oversee this Study, a Steering Committee has been set up, independently co-chaired by Sir Jonathon Porritt, and Chief Research Scientist from Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO), Dr John Raison......"

Some critique of the Manifesto group here by RAN:

http://www.ran.org/new_palm_oil_talk_and_log_initiative_a_step_backward_for_responsible_supply_chains

Palm oil productions threatens African apes by Maanvi Singh · NPR ·  Jul 11, 2014; http://www.mprnews.org/story/2014/07/12/palm-oil-productions-threatens-african-apes; ".....Now it seems palm oil production in Africa is picking up, too. And the new farms there are threatening great ape populations in West and Central Africa, according to a study published Thursday in the journal Current Biology.... "Africa seems to be the new frontier," says Serge Wich, a primate biologist at Liverpool John Moores University and the lead author of the report. Sixty percent of African oil palm concessions — or land that's been set aside for the development of oil plantations — overlaps with the ape habitats...."

Will other Asian consumer giants follow as Kao goes forest-friendly? GreenpeaceGreenpeace challenges Asian consumer companies such as India’s Godrej and ITC and China’s Liby and Nice to make similar commitments as the Japanese beauty products maker commits to forest-friendly policy; http://www.eco-business.com/news/will-other-asian-consumer-giants-follow-kao-goes-forest-friendly/

Sustainability news links - Nespresso sustainability, BBC complaint, Greenpeace losses

University of Michigan MBA students win competition to inject sustainability into coffee production - video; "The 2014 Nespresso Sustainability MBA challenge, which aims to find new ways to inject sustainability and shared value into the coffee industry, saw 70 MBA schools worldwide take part. Students from Yale School of Management were one of two runners-up, recognised for their strategy to combine the goals for carbon reduction of both Nespresso and coffee producing country Costa Rica." http://www.theguardian.com/sustainable-business/video/university-michigan-mba-nespresso-sustainability-challenge-2014-coffee-video

Common sense prevails as BBC upholds Today programme climate complaint. BBC's Editorial Complaints Unit concludes interview with Lord Lawson and Professor Sir Brian Hoskins on climate change and floods broke guidelines on due accuracy; http://www.theguardian.com/environment/blog/2014/jun/26/commonsense-prevails-as-bbc-upholds-today-programme-climate-complaint; " Lawson made inaccurate and misleading statements about the science of climate change as he had done so in previous appearances on its programmes.
Furthermore, he was no doubt invited to participate in the interview on Today because he rejects the scientific evidence and chairs a campaign group for climate change ‘sceptics’, the Global Warming Policy Foundation...."

Greenpeace losses: leaked documents reveal extent of financial disarray; Emails and meeting notes show group’s finance department has a long history of problems in its handling of the £58m budget,
The Guardian, Monday 23 June 2014 10.09 BST; "The handling of Greenpeace International’s £58m budget has been in disarray for years, with its financial team beset by personnel problems and a lack of rigorous processes, leading to errors, substandard work and a souring of relationships between its Amsterdam headquarters and offices around the world, documents leaked to the Guardian show.
Coming after it emerged that a staffer had lost £3m on the foreign exchange market by betting mistakenly on a weak euro, the documents show that the group’s financial department has faced a series of problems, and that its board is troubled by the lack of controls and lapses that allowed one person to lose so much money.... Greenpeace, which prides itself on being largely funded by relatively small individual donations, apologised to supporters for the loss, claiming that the “serious error of judgment” was the result of a single staff member “acting beyond the limits of their authority and without following proper procedures”. But the documents show that internally the group is worried about the organisational failings that allowed it to happen....The leaked material seems to show disquiet over a continuing major restructuring, aimed at moving staff from Greenpeace International’s base in Amsterdam to national offices across the world to fulfil Naidoo’s goal of better tackling environmental problems in the global south. “This [2014] will be a testing year for all of us,” the strategy document warns....Gerald Steinberg, president of NGO Monitor, which seeks to make NGOs more transparent and accountable, said he saw parallels with the financial problems Amnesty International had experienced in recent years. “The extent of it [the financial problems] was not something I expected [at Greenpeace]. But it’s part of the fact that NGOs keep things very much within the organisation; there’s no culture of accountability. They call on governments to be accountable but they lack this in so many ways, so in that sense it’s not a surprise.”... http://www.theguardian.com/environment/2014/jun/23/greenpeace-losses-financial-disarray

To target Greenpeace's flying director is to miss the point, It's easy to set green against green, but the charity's problems run wider and deeper than one person's travel plans, The Guardian, Wednesday 25 June 2014; http://www.theguardian.com/commentisfree/2014/jun/25/greenpeace-flying-director-green-charity