Indonesia's palm oil giants ditch green pact

A worker unloading palm fruit at a palm oil plantation in Peat Jaya, Jambi province, Indonesia, at the height of the haze crisis in September last year. Plantations have been blamed for starting fires that caused the haze.
A worker unloading palm fruit at a palm oil plantation in Peat Jaya, Jambi province, Indonesia, at the height of the haze crisis in September last year. Plantations have been blamed for starting fires that caused the haze.PHOTO: REUTERS

Environmental groups slam firms that say 'zero deforestation' pledge no longer needed

Major palm oil companies that backed a landmark "zero deforestation" pact on green practices have now ditched it in favour of less strict standards, triggering criticism that they have caved in to government pressure.

The companies signed the 2014 Indonesia Palm Oil Pledge, or Ipop, in an agreement hailed as one that will boost efforts to fight rampant deforestation, annual forest fires and choking haze.

As part of the pledge, the firms, which include top palm oil producers and traders, pledged not to develop peatlands of any depth.

Peatland fires are a major cause of the haze.

But yesterday, the companies said Ipop had run its course and was no longer needed. They said they supported the government's efforts to "transform the palm oil sector" and to strengthen the country's own certification standards called the Indonesian Sustainable Palm Oil system, or Ispo.

"Ipop signatories have decided that recent groundbreaking policy developments in Indonesia have fulfilled the purpose of Ipop to help accelerate and promote this transformation towards sustainability and therefore its presence can be dissolved," the grouping said in a statement yesterday. It pointed to government actions that included the creation of a peatland restoration agency and a moratorium on new palm oil plantations.

[The Ispo, which is mandatory, bans land-clearing in primary forests and peatlands. The Ipop, which is voluntary, goes further by banning land-clearing in secondary forests and bushland that has high carbon content.

The Ipop companies are Wilmar International, Golden Agri Resources, Cargill, Asian Agri, Musim Mas and Astra Agro Lestari.

The Ispo, which is mandatory, bans land-clearing in primary forests and peatlands. The Ipop, which is voluntary, goes further by banning land-clearing in secondary forests and bushland that has high carbon content.

Green groups have condemned the move to drop the Ipop, saying the firms were giving in to government pressure.

The Agriculture Ministry earlier this year complained that the Ipop was hurting smallholder producers who could not afford to adopt sustainable forestry practices under the pledge. The Business Competition Supervisory Commission alleged that a cartel-like monopoly has been created by the signatories as a result, hurting smallholders.

Greenpeace Indonesia forest campaigner Annisa Rahmawati said in a statement yesterday that "the government officials have bullied and threatened Ipop members".

"The Ministry of Agriculture needs to get its priorities right. Last year's forest fires crippled Indonesia's economy and poisoned people across the region," she said.

Ms Annisa urged government officials to urgently work towards delivering President Joko Widodo's plans to stop forest fires by halting the palm oil industry's expansion into forests and peatlands.

The Coordinating Ministry for Economic Affairs said in a statement on Wednesday that the Ispo is "a single standard for sustainable palm in Indonesia" and it will adopt international best practices which are in line with the country's laws.

In a statement yesterday, Wilmar International said it welcomed the government's recent initiatives to lead the country's palm oil industry towards more environmentally friendly development. It said given these developments, "Ipop as an entity is no longer required". But it stressed it would continue its zero-deforestation, no-peat, no-fires and no-exploitation policies.

Mr Glenn Hurowitz, senior fellow at the Washington-based Centre for International Policies, said the need for robust industry and government action to protect Indonesia's forests is "as urgent as ever".

He said the Ipop had come under attack from interests that want to let companies continue burning forests for large-scale palm plantations in frontier areas like Papua.

He said the palm oil industry needs "to find the courage to team up and create a new mechanism that actually delivers results for Indonesia's people and forests".

A version of this article appeared in the print edition of The Straits Times on July 02, 2016, with the headline 'Indonesia's palm oil giants ditch green pact'. Print Edition | Subscribe