Palm Oil development, ‘Forest Carbon’ conservation and community rights

Palm oil companies must respect local communities’ land rights and right to FPIC
Sophie Chao

Palm Oil development, ‘Forest Carbon’ conservation and community rights

The production of palm oil has come under sustained criticism for its destruction of forests, biodiversity and wider environmental values. More lately, the industry has also been targeted to prevent the massive greenhouse gas emissions from its forest clearance and from drainage and planting on peatlands. Under pressure from local and international campaigning groups, the palm oil giant Golden Agri Resources has adopted a new Forest Conservation Policy that promises no clearance of tall forests and no planting on peat. What are the implications of this new policy for forest peoples?

Golden Agri Resources (GAR) is a large natural resource development conglomerate based in Singapore. The Group, which is owned by the wealthy Indonesian Widjaya family, includes Sinar Mas Banking, Sinar Mas Forestry, and Asia Pulp and Paper. The majority of the conglomerate’s extensive palm oil holdings in Indonesia are grouped together as PT SMART.   
In 2009, the group came under scrutiny from the NGO, Greenpeace, which had found from detailed field assessments and satellite images that PT SMART subsidiaries were clearing forests and draining deep peat in violation of the RSPO standard and thereby making a significant contribution to greenhouse gas emissions. Itself under heavy pressure from Greenpeace for buying PT SMART’s palm oil, Unilever announced it was to suspend purchase of PT SMART’s oil pending a halt to forest and peatland conversion by the company.

In 2010, PT SMART / Sinar Mas announced its adoption of a Forest Conservation Policy, by which it undertook to develop a method for avoiding forest and peatland clearance in its operations. Unilever recommenced its purchases of palm oil produced by PT SMART. During 2011, PT SMART, working with The Forests Trust and Greenpeace, developed a methodology for assessing High Carbon Stocks in its concessions by which in future only areas bearing ‘young scrub’ and ‘cleared lands’ should be planted. Of course these are precisely the areas that are closest to communities, being their farmlands and areas of forest fallow in their rotational farming. In other words, the policy has the perverse incentive of putting added pressure on communities to give up their lands to oil palm development.
GAR is currently piloting its Forest Conservation Policy in one of its concessions, PT Kartika Prima Cipta (PT KPC), in Kapuas Hulu in West Kalimantan and in Liberia in the concession of its wholly owned holding, Golden Veroleum Limited.

Given the serious problems with land acquisition that have been identified in Liberia, in discussions with Greenpeace, it was agreed that it would be useful for Forest Peoples Programme to also carry out a review the situation in Kapuas Hulu, independently of the other parties, to see how the pilot is addressing social issues there. The aim of the work is to ensure that the pilot projects adhere to the principle of FPIC and respect community rights, in line with the RSPO standard.

FPP, working with the national NGO TUK-Indonesia, helped by local NGO Kaban, has now carried out two surveys in the PT KPC concession, in July and September. The first survey in July, which included interviews with local company officials, but focused on the views of the affected communities, revealed some serious shortcomings in the way the company was dealing with land rights, obtaining consent and providing smallholdings for affected Dayak Mayan people and noted widespread complaints about the impact of palm oil development on fishing and fish-farming which are mainstays of the Malay folk who live along the main waterways in the area.

We immediately raised the communities’ concerns with senior staff in GAR which promised to look into them and seek to remedy any deficiencies. When we returned in September as we had said we would to check on progress, we were extremely disappointed to find that neither GAR nor its consultants had even visited the field to check out the situation, let alone provide solutions.

GAR is still promising to take action and the consultancy, The Forests Trust, is now mobilising to make a response. We will be issuing a detailed report shortly that sets out the issues in much more detail.