RSPO Member First Resources Faces Further Allegations it has breached RSPO Group Membership Rules
A coalition of Indonesian Civil Society Organisations have submitted further allegations against Roundtable on Sustainable Palm Oil (RSPO) member First Resources Ltd., accusing the company of violating the RSPO Group Membership Rules for failing to disclose all of its related entities under the group’s common control.
The fresh allegations are based on evidence published by non-profit newsroom, The Gecko Project 1Investigative journalists obtained documents which demonstrate First Resources has control and influence over a group of non-RSPO member companies known as New Borneo Agri ("the Sulaidy companies"). None of these companies were declared in First Resources’ RSPO Group Membership.
There is mounting evidence that groups involved in the production and trade of palm oil have sought to circumvent the restrictions imposed by the RSPO and their own policies by establishing shadow companies.2 Shadow companies are commonly used to acquire land without attracting attention or scrutiny from regulatory authorities; to evade regulations and oversight, including social and environmental obligations; and to exploit legal loopholes to minimize tax liabilities and increase profits.
As noted by the Gecko Project: “In some cases, these shadow companies are owned on paper by different members of the same family, creating artificial boundaries between what is functionally one conglomerate. In others, the ownership is hidden through secrecy jurisdictions, deploying methods more commonly associated with corruption and tax evasion. Either way, it allows conglomerates to maintain access to “sustainable” markets through one arm, while another destroys rainforests and stokes conflicts with communities.”
The latest accusations have been submitted as part of an ongoing RSPO complaint against First Resources, which was accepted by RSPO Complaints Panel in April 2021 (RSPO/2021/04/EN).3 The complaint, which is the first to test the robustness of the 2020 RSPO Membership Rules, is still in the deliberation phase and a formal investigation has not yet commenced. It is hoped the new evidence will be considered by the Independent Investigator in their forthcoming investigation.
In the absence of an RSPO ruling on First Resources’ alleged use of shadow companies, due to ongoing delays in the complaints process, impacted indigenous peoples are seeking alternative routes to resolve long-standing tenurial conflicts with their alleged related entities.
The Dayak Agabag, who are embroiled in a long-standing tenurial conflict with PT Karangjuang Hijau Lestari (subsidiary of alleged shadow group FAP Agri), continue to call for dialogue: “We again request downstream companies to encourage FAP Agri representatives and Nunukan government officials to sit down with us, the peoples of Tetaban, Melasu Baru, Bebenas, Lulu and Sujau to resolve a land dispute which has been going on for over a decade.” Nik Berdi, former Village Head of Bebenas
1 https://thegeckoproject.org/id/articles/chasing-shadows/
2 A shadow company is under common control of a self-identified group, but which has not publicly been acknowledged as part of that group.
3 https://rspo.my.site.com/Complaint/s/case/5000o00003CLXepAAH/detail
Overview
- Resource Type:
- News
- Publication date:
- 30 January 2024
- Region:
- Indonesia
- Programmes:
- Territorial Governance Global Finance Conservation and human rights Law and Policy Reform Supply Chains and Trade Culture and Knowledge