Not just any Wilmar suppliers caught violating no-deforestation policy

/ Philip Jacobson

Two subsidiaries of Ganda Group, owned by Wilmar founder's little brother, presided over rainforest destruction for palm oil in Indonesia.

  • Greenomics identifies deforestation on oil-palm concessions in Riau and West Kalimantan
  • Wilmar blames encroachers, but Greenomics says clearing was company-directed
  • Wilmar the biggest buyer from both companies, giving it significant leverage to affect their practices

Yet other Wilmar suppliers are alleged to have cleared rainforest in violation of the palm oil giant’s sustainability policy, but this time the allegations hit closer to home.

A new report by Greenomics-Indonesia, an NGO, finds clearing of forested peatlands on two concessions controlled by the Ganda Group, whose owner, Ganda Sitorus, is the younger brother of Wilmar co-founder Martua Sitorus. The allegations are confirmed by satellite imagery.

One of the concessions is held by a Ganda subsidiary called Patiware, the largest listed supplier of Wilmar Indonesia, according to the report. Landsat images taken in March and June show clearing on the concession in West Kalimantan province on the island of Borneo.

The other concession is held by Langgam Inti Habrindo (LIH), a subsidiary of Provident Agro, which in turn is owned by Ganda. Clearing in that concession in Riau province on Sumatra island not only took place between January and June of this year, but also during the first six months of last year, according to an earlier report released by Greenomics in September. Wilmar announced a zero-deforestation policy in December 2013.

“Wilmar needs to explain why it is so blasé about sourcing palm oil from the Ganda Group, and is even listed as its biggest buyer?” Greenomics writes in the report. “Does Wilmar have no data on the operations of [Patiware and Provident Agro]?”

Landsat images dated January 7 and June 8 show forest clearing in LIH's concession subsequent to Wilmar’s signing of the Indonesian Palm Oil Pledge in September 2014. Wilmar says the clearing was done by encroachers and and that LIH put a stop to their activities. Images: Greenomics
Landsat images show forest clearing in LIH’s concession subsequent to Wilmar’s signing of the Indonesian Palm Oil Pledge in September 2014. Wilmar says the clearing was done by encroachers and and that LIH put a stop to their activities. Images: Greenomics

A Wilmar spokesperson did not deny the clearing by Patiware, but said it only happened in the portion of the concession that was supposed to be developed for plasma smallholders (which differ from independent smallholders in that they partner more closely with a company). The rest of the concession “was almost fully planted much earlier than the launch of our Policy,” the spokesperson told mongabay.com.

“PT Patiware has agreed to stop clearing the remaining undeveloped plasma area; they will also be meeting with the local communities to explain why they have to stop the plasma development programme, as well as to work out a mechanism to compensate these smallholders,” the spokesperson said.

Wilmar did contest the latest allegations against Provident Agro. The spokesperson said the forest in LIH’s concession was cleared by “some local communities,” not by the company.

Provident Agro echoed that sentiment: “The encroachment by local people was beyond our permission and it was a consequence if the area was left without activity,” a spokesperson told mongabay.com.

“During our regular site inspection … we discovered the situation [and] our team stopped their activities and warned them that their acts were considered trespassing [in] LIH’s [concession] and was illegal,” the spokesperson added. “We managed to stop them without further conflict.

“We remain in line with Wilmar’s policy.”

Greenomics, though, cast doubt on that explanation. Greenomics Executive Director Vanda Mutia asserted that blaming local communities was “totally irrelevant,” given that the clearing took place within LIH’s canal system and right next to a planted area rather than in a remote part of the concession.

“This means that the clearing was under the company plan,” Vanda said.

An image of LIH's canal development plan taken from its high conservation value (HCV) assessment, with an arrow pointing to forest clearing took place. Image: Greenomics
An image of LIH’s canal development plan taken from its high conservation value (HCV) assessment, with an arrow pointing to where forest clearing took place. Image: Greenomics
A map of LIH's concession, also taken from its HCV assessment. Land the company cleared is shaded in purple, secondary forest in green. Image: Greenomics
A map of LIH’s concession, also taken from its HCV assessment. Land the company cleared is shaded in purple, secondary forest in green. Image: Greenomics

Shown satellite imagery of the clearing and a map of LIH’s canal development plan, Tania Firdausy, a geographic information system (GIS) analyst with the World Resources Institute, said that while she couldn’t confirm who cleared the land from satellite pictures alone, “it looks like [it’s] commercial since [it’s] directly next to the areas that are cleared.”

Provident Agro did not respond to subsequent emails about Greenomics’ contention that LIH directed the clearing, sent during but also well after the end of the Muslim fasting month of Ramadan, during which Wilmar said Provident Agro officials would be on leave.

According to Greenomics, Wilmar was listed as the biggest buyer of palm oil from both Patiware and Provident Agro, so the agribusiness giant would seem to have significant leverage to get the suppliers to change their practices, should it choose to exercise it.

Asked whether the Sitorus brothers’ familial bond means that if Wilmar continues to source tainted palm oil from Ganda, its prospects for cleaning up the rest of its supply chain are troubling, Mark Sanderson, a communications officer with The Forest Trust, which advises Wilmar on its sustainability policy, said, “This may be a legitimate concern to some as inconsistent handling of like cases would most likely make it harder in future to tackle non compliance. On the other hand, such relationships can also potentially lead to positive influence. Wilmar has gained some success in getting suppliers with whom they have [a] good relationship to commit to a similar sustainability policy.”

The forest clearing contravenes not only Wilmar’s own policy but also the Indonesian Palm Oil Pledge (IPOP), a high-profile, joint sustainability pact into which Wilmar has entered along with Golden Agri-Resources, Asian Agri, Musim Mas and the Indonesian Chamber of Commerce and Industry (Kadin). Ganda has not issued such a policy.

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