Wilmar fails to resolve conflicts with communities in West Kalimantan and West Sumatra

In December 2013, following pressure from its customers and investors, the palm oil giant Wilmar committed to delinking its entire supply chain, including joint ventures and third-party suppliers, from deforestation, peatland development, and human rights abuses.  The commitment, to be fully implemented by December 2015, was welcomed by groups who had tracked and criticised Wilmar for its environmental destruction and human rights abuses. Two years on however, despite its promises, Wilmar has failed to resolve many long standing conflicts between its operations and impacted communities. The following material looks at a couple of cases where Wilmar has failed to resolve its conflicts with communities.

In 2007, FPP assisted two communities in West Kalimantan to make formal complaints to the RSPO and to the International Finance Corporation about Wilmar's operations affecting their customary lands. Wilmar had been a member of the RSPO since 2005 and had received financial support from the IFC, the private finance arm of the World Bank, since 2004. The RSPO upheld the complaint that Wilmar had taken over lands of the communities of Senuju and Sajingan Kecil without their consent, and the IFC confirmed this decision and provided mediation support to resolve the dispute. In 2008, the communities reached agreement with Wilmar over the impacts of its operations, and the World Bank suspended further investments in the palm oil sector pending a review and policy development to avoid its financing causing negative social and environmental impacts. FPP welcomed the agreement between Wilmar and the West Kalimantan communities, but in 2014 FPP found that Wilmar had not honoured its commitments and the communities were left with unpayable debts.

In 2006, FPP documented the problems that Wilmar subsidiary, PT PHP1 had caused for the Kapa community of Pasaman Barat in West Sumatra. Ten years, later the problems for the Kapa community caused by Wilmar have intensified, with the company obtaining a plantation license (HGU) without their consent, while the leaders of the community that have complained to the RSPO and government authorities have been criminalized.

In January 2016, FPP staff and NGO partners visited the Kapa community and met first hand with community leaders to learn about their ongoing struggle to have their land rights recognised and respected by Wilmar.  Following the visit, FPP put out the Maninjau resolution, highlighting Wilmar's failure to respect the rights of the Kapa community and resolve conflicts with communities in good faith. The resolution called for, "real sustainable development - development with justice - and for an end to colonial models of land development, which require native peoples’ to surrender their land to foreign investors."

FPP will continue to highlight Wilmar's human rights abuses, and in particular, its failure to respect the land rights of customary communities, until we see changes on the ground.  A 2015 regulation from the Ministry of Agraria, creates a category for Communal land rights, making it possible for communities to have their land rights recognised and registered by the government and then allowing them to lease areas to oil palm companies. While the regulation lacks implementing instructions, it may offer a way out of the current dilemma for companies that wish to respect community rights to land but can only obtain government licenses over lands to which all residual rights in land have been removed.