PALM OIL NEWS
August 29, 2017
GenP held to account for promises despite exit strategy
JAKARTA (foresthints.news) - In June 2011, Malaysia’s fourth largest palm oil company, Genting Plantations (GenP), through its subsidiary PT CSC obtained a palm oil development permit from the Indonesian Forestry Ministry in West Kalimantan’s Ketapang regency.
According to IUCN data, this concession - which is bigger than over 15 thousand soccer fields - forms part of the habitat of the critically-endangered Bornean orangutan.
Not yet satisfied with this permit, GenP went on to obtain another palm oil development permit for a concession larger than 16 thousand soccer fields through another subsidiary PT PSM in May 2013, the location of which is directly adjacent to PT CSC’s concession.
The following Google Earth images for the period 2013-2016 reveal that significant parts of the forested areas in the PT CSC concession (delineated in yellow) have been cleared. It should be noted, however, that parts of the forested areas in the PT CSC concession have been retained as habitat for the Bornean orangutan.
At the end of September 2014, Mongabay reported on the clearing done by PT CSC, including a warning to Wilmar that such clearing would also be carried out by PT PSM, the other GenP palm oil company concerned.
Given that GenP is linked to Wilmar’s supply chains, it was considered appropriate to emphasize this issue to Wilmar to facilitate the Singapore-based agribusiness group in its efforts to clean up its supply chains from deforestation after the announcement of its zero deforestation policy in early December 2013.
Nevertheless, the clearing of the Bornean orangutan habitat at PT CSC continued. In early November 2015, a report was released indicating the high level of deforestation that had taken place in the concession which plays host to the Bornean orangutan.
GenP’s exit strategy
GenP is certainly aware that it is not easy to expand a palm oil plantation in a concession predominantly composed of the Bornean orangutan's habitat along with high carbon stock (HCS) forests. Accordingly, at the end of January this year, GenP announced the sale of PT PSM to PT Suryaborneo Mandiri (SBM).
This sale represented GenP's exit strategy to avoid keeping its promise - as written in Wilmar's grievance report - of maintaining HCS forests situated within the PT PSM concession.
As reported by local media (Jun 5), PT PSM was to begin operating imminently and has plans to conserve 4,750 hectares of orangutan habitat, or around 28% of the concession’s more than 16,000 hectares.
The question remains as to whether the forest clearance in the PT PSM concession will reach the same level as that conducted by GenP-owned PT CSC, as demonstrated in the following Google Earth images (9/8/2015).
If this turns out to be the case, it will be viewed as an adverse result of GenP’s exit strategy to avoid complying with the pledge it made of conserving the HCS forests found in the PT PSM concession.
Observations of the level of deforestation taking place in the PT PSM concession are extremely relevant, considering that this deforestation is closely tied to GenP’s exit strategy of essentially getting out of its promise not to develop HCS forests in the PT PSM concession, as outlined in Wilmar’s grievance report (Aug 11).
In the event that the new owner of PT PSM adopts the documents pertaining to new planting procedures (NPP) proposed to RSPO by PT PSM in late June 2014 when it was still under the control of GenP, this would result in massive clearing of HCS forests and the Bornean orangutan’s habitat in the coming years.