Press Release: Unsustainable Sime Darby, Buyers and Financiers Must Stop Their Business Relations

TUK Indonesiaq Sime Darby

Dayak Hibun indigenous peoples from Kerunang hamlet and Entapang hamlet, Bonti Sub-district, Sanggau District, West Kalimantan express their deep objection with regards to the sale of PT Mitra Austral Sejahtera (PT MAS) by Sime Darby Plantation, a Malaysian corporate entity.

Press Release: Unsustainable Sime Darby, Buyers and Financiers Must Stop Their Business Relations

This article was originally posted by our partners TuK Indonesia in: Bahasa Indonesian and English

Jakarta, 21 March 2019 – Dayak Hibun indigenous peoples from Kerunang hamlet and Entapang hamlet, Bonti Sub-district, Sanggau District, West Kalimantan express their deep objection with regards to the sale of PT Mitra Austral Sejahtera (PT MAS) by Sime Darby Plantation, a Malaysian corporate entity.

PT MAS, a subsidiary of Sime Darby plantation has broken promises and abused Indonesian rules and regulations, international laws, RSPO voluntary international best practice standards, and OECD Guidelines on Multinational Enterprises.
Sime Darby Plantation looted Dayak Hibun indigenous peoples’ land in Kerunang hamlet and Entapang hamlet by converting indigenous peoples land for PT MAS oil palm plantation concession area (HGU). PT MAS broke the initial promises of socialisation in 1995 that the company only borrowed community land to establish oil palm plantation for only 25-year. However, without information and consent of the community, PT MAS made community land as a business right (HGU).

“Sime Darby and the management of PT MAS do not run away from the responsibility of resolving land conflict that has had dragged on since 1999. The Government of Indonesia must not allow and authorise the sale of PT MAS, until the HGU land conflict with the communities fully resolved. “The customary land that was seized by PT MAS about 1,462 hectares must be returned to the communities of Kerunang and Entapang,” said Redatus Musa, spokesperson of the Dayak Hibun indigenous people from Kerunang – Entapang Hamlet.

Sime Darby Plantations, the largest Malaysian palm oil company in the world is a prominent founder and member of the Roundtable on Sustainable Palm Oil (RSPO). The divestment of PT MAS constituted an act of arrogant, illegal and arbitrary because Sime Darby was without good-faith ignored deliberations and denied consensus with the Dayak Hibun indigenous peoples before selling PT MAS.

Even within the norms of production and governance of the global palm oil industry, the sale of PT MAS by Sime Darby Group is not in accordance with the spirit and commitment of the RSPO code of ethical business conducts. The divestment of PT MAS is not transparent, in violation of the principle of propriety and compliance with the norms of international law and human rights.
“Sime Darby’s act of divesting PT MAS shows obviously that there has been something wrong with RSPO certification for failures in providing respect, protect and remedy human rights as required by RSPO Principles and Criteria. Since 2012 the RSPO has issued sustainable palm oil certificates for dozen of Sime Darby’s Indonesian mills and oil palm plantations despite the unresolved conflict from land grabbing by HGU in PT MAS. This is violates RSPO ethical and appropriate business conducts, legal compliance, human rights and FPIC as well as responsibility to provide remedies for impacts on human rights by multinational enterprises of the OECD member countries. RSPO General Assembly passed in November 2018 discouraged its members from selling or divesting operations either mills or plantations that are subject to unresolved conflicts,” said Norman Jiwan former social NGO’s RSPO Executive Board.

Sime Darby’s palm oil financiers and buyers also need to take a stand in addressing the said land conflict. From 2012-2018, Sime Darby received financial supports from prominent financial institutions including Maybank, HSBC, Standard Chartered, Deutsche Bank, Credit Suisse and the Norwegian Pension Fund Institution. Some palm oil buyers such as Cargill, Musim Mas, Unilever, and Wilmar International are bound by RSPO policies and their own No Deforestation, No Peat and No Exploitation (NDPE) policies also purchased palm oil from Sime Darby subsidiaries.

“To the financiers, banks, investors, shareholders, and buyers of Sime Darby Group palm oil immediately stopped their business relations with Sime Darby Group. It is appropriate for any business relations to be stopped because since 2012 Sime Darby Group failed to resolve the HGU land conflicts with the Kerunang and Entapang communities as required by the RSPO Principles and Criteria. The RSPO has even proven to have failed to encourage Sime Darby to restore the community’s customary land rights, “said Edi Sutrisno, Executive Director of TuK INDONESIA.

Marcus Colchester of Forest Peoples Programme said:

As an international human rights organisation and member of RSPO, FPP is deeply disappointed that Sime Darby has ignored the Resolution passed by the RSPO in November 2018 which called on members not to divest operations which were the subject of complaints. Sime Darby’s action is bound to be viewed by other RSPO members as an expression of bad faith. The Dayak Hibun have been deprived of their customary rights to their lands by PT MAS without their free, prior and informed consent. This constitutes a clear violation of one of the key provisions of the RSPO standard designed to avoid land grabbing and land conflicts. The Dayak Hibun are requesting the return of their land, as is their right under international law and international human rights treaties ratified by the Government of Indonesia. Unfortunately the RSPO Complaints Panel has been extremely slow over several years in following up on this complaint, to such an extent that the case was taken to the OECD. Now, just as the OECD was beginning to convene meetings to restart the process of conflict resolution, Sime Darby has decided to sell up.

With the outstanding land conflict has deprived of customary land rights caused by HGU land title in PT MAS, Dayak Hibun indigenous peoples of Kerunang and Entapang landowners and heirs call on the Government of Indonesia, OECD-National Contact Point Swiss (Swiss NCP), RSPO, bank, investor, shareholders, and palm oil buyers jointly urge Sime Darby to immediately return back the community’s customary land.

“We are also reminding the company that will be acquiring that until now PT MAS HGU land is still in dispute and having plenty of problems,” close Redatus Musa.

 

Contact Person:
Mubarok – TuK INDONESIA (0813-1109-8787)