On 5th December, Wilmar International, one of Asia’s biggest agribusiness corporations and the world’s biggest palm oil trader, announced a broad new environmental and social policy, including a commitment to no deforestation and the principle of Free, Prior Informed Consent when dealing with indigenous communities.

As these new ethical criteria would apply not only to Wilmar’s own plantations but also other companies who supply the palm oil, sugar and soy that Wilmar trades, it would seem that this pledge might have a big effect on the plantation industry’s environmental record – especially for palm oil where Wilmar controls 45% of world trade.

The question is, will it be implemented? This new policy was launched at the same time as a deal between Wilmar and food and household products giant Unilever, which has its own target to only use traceable palm oil by the end of 2014. As more multinationals come under pressure to use less environmentally-damaging ingredients, the commercial benefits to Wilmar of appearing to be an environmental leader are clear.

However the company has frequently been accused of violating ethical standards that is has signed up to in the past – for example as a member of the Round Table on Sustainable Palm Oil (RSPO) and recipient of funding from the World Bank’s International Finance Corporation(IFC). That means many groups with experience of the company’s track record are sceptical about this new commitment.

PT Anugerah Rejeki Nusantara: a test of whether the new policy is serious.

In West Papua Wilmar has plans for two 40,000 hectare sugar-cane plantations in Merauke and two more in neighbouring Mappi regency, and these could be a key test for the company’s new policy. If these plantations for ahead, they will clearly contravene the ethical standards. Let’s take a look at the situation with PT Anugerah Rejeki Nusantara (PT ARN), one of those plantations:

• No deforestation. Wilmar has committed to end deforestation in High Carbon Stock and High Conservation Value forest. The definition is quite broad and includes most forest that has not been cleared within the last ten years. PT ARN’s concession is an ecologically-rich area, largely forested, with some grassland and swamps.
• No peat. Wilmar says it will not start plantations on peat of any depth. Data from Wetlands International shows intermittent shallow and medium peat within PT ARN’s concession.
• Respect the rights of local and indigenous people to give or withhold their Free, Prior, Informed Consent (FPIC). PT ARN has been trying to convince communities in the area to hand over their land for two years now, but many people are still determinedly opposed. A recent study in four villages affected by PT ARN revealed that the company was falling far short of FPIC principles. Where people have clearly not consented, the company keeps making its approaches, until the community feels it really has no choice. Often Wilmar only speaks with community and clan leaders individually, which was causing the seeds of conflict within the village. Security forces brought to discussions also have an intimidating effect. There are other tools of deception too – in one village PT ARN’s Public Relations Manager even pretended to be a priest to get the people’s support.

Wilmar’s policy covers a number of other areas, such as workers’ rights and dealing with land conflict. The full text can be read here.

What about the Ganda Group?

Wilmar commits itself to stop deforestation and development on peat immediately, and will not start buying from any suppliers who are deforesting or developing peat. Existing suppliers have until the end of 2015 to comply. Of particular interest is to see how this will affect the Ganda Group (Agro Mandiri Semesta Plantations), a palm oil company which sells its produce to Wilmar.

Wilmar has a special relationship with Ganda Group, which is owned by Ganda Sitorus, the younger brother of Wilmar founder Martua Sitorus. In recent years the Ganda Group have taken over plantations which do not meet Wilmar’s previous ethical commitments to the RSPO and IFC. The most notorious case is in Jambi, Sumatra, where after going through the motions of two years of IFC-facilitated mediation to resolve a land conflict with the indigenous Suku Anak Dalam Batin Sembilan, Wilmar suddenly sold it’s subsidiary PT Asiatic Persada to the Ganda Group, rather than abide by any agreements produced by that mediation. On Saturday 7th December, the Ganda Group once again violently evicted Suku Anak Dalam communities which had reoccupied their ancestral land in the plantation.

The Ganda Group also has plans for two plantations in Merauke: PT Agrinusa Persada Mulia and PT Agriprima Cipta Persada. These companies are also accused of deceiving local villagers and paying shockingly low compensation rates, as well as clearing forest for an oil palm nursery before receiving a plantation permit. The plantations, which also involve clearing natural forest, would clearly not meet the RSPO standards which Wilmar has signed up to in its bid to be seen as a responsible company, but the Ganda Group is unencumbered by such commitments.

However now Wilmar’s policy states that it it won’t be buying from companies that are clearing forests. Does that mean the Ganda Group are going to have to look elsewhere to sell their tainted palm oil?

AwasMIFEE wrote to Wilmar on 6th December to ask whether its new ethical policy would mean that it would be cancelling its plans in Merauke. No response was received by the time this article was published.