Olam International, one of the world's largest food commodity traders, yesterday denied allegations that it is developing oil palm plantations irresponsibly in Gabon, Central Africa, after an investigation by NGOs accused the firm of destroying large tracts of rainforest.
Singapore-based Olam, majority owned by Temasek Holdings, is developing large oil palm plantations in Gabon, a heavily forested nation that "green" groups fear will be cleared for agriculture and mining like in many parts of South-east Asia.
Two non-governmental organisations, US-based Mighty and Gabon-based Brainforest, yesterday released a report and video footage which they said show bulldozers and chainsaws clearing rainforest, including large mature trees.
Gabon's forests are abundant in wildlife such as gorillas and elephants. The government said it needs to diversify its economy by boosting agricultural production and improving the livelihood of impoverished rural communities.
Analysis by both NGOs found that Olam has cleared about 20,000ha of forest across its four legal concessions since 2012. That is roughly a third the size of Singapore.
Amount of forest in hectares that Olam has cleared, according to two non-governmental organisations - US-based Mighty and Gabon-based Brainforest.
"Olam broadcasts that it is a sustainability leader to the world, but that is far from the reality in Gabon," said Brainforest founder Marc Ona Essangui in a statement.
The NGOs said Olam is not following through on its own sustainability goals and that it does not meet the zero-deforestation commitments of major Singapore-based palm oil producers Wilmar International and Golden Agri-Resources. But they noted that Olam has improved its practices in recent years.
Olam is a growing palm oil player and is developing two projects in Gabon, the first involving planting on the four concessions and building processing mills and the second involving smallholders. Both are joint ventures with the Gabon government. Olam yesterday said it plans to spend roughly US$1.7 billion (S$2.4 billion) on both projects.
"I want to say very categorically that we believe both of these projects in Gabon are environmentally sustainable and socially responsible," Olam chief executive Sunny Verghese told reporters yesterday, citing Olam's role in helping Gabon develop its economy.
He said the firm follows high- conservation-value and high-carbon-stock approaches when developing oil palm plantations, meaning that forest areas are assessed for their conservation value and the amount of carbon to see if they should be protected or cleared.
"We develop our plantations only in ecologically degraded secondary forests," he said, adding that the firm has developed 44,000ha of oil palm plantations so far in Gabon but has set aside 55,000ha to be conserved and protected.
The video footage released by the NGOs shows areas with large, mature trees being cleared. Mr Verghese said he had not seen the footage and was unable to comment.
Ms Etelle Higonnet, campaign and legal director at Mighty, told The Straits Times in an e-mail: "Based on Olam's own data, not all the rainforests it's been clearing were as heavily degraded as the company makes out. For example, in three of its concessions, it appears Olam planned to clear up to 9,000ha of forest that the company classified as 'relatively undisturbed or lightly logged'."
The NGOs also accused Olam, which trades palm oil globally, of failing to be transparent on where it sources the commodity.
But Olam yesterday released the names of its 14 supplier firms, most of them from Indonesia. Mr Verghese said Olam has rationalised its palm oil supplier base from 47 in 2014 to 14 now. "We have a very rigorous sourcing policy and we insist that there is zero tolerance for burning - so it's a no-burn, no-peat, no- deforestation compliant policy."