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Indonesian palm oil giant cutting deforestation from supply chain

Indonesian palm oil giant Golden Agri-Resources (GAR) is continuing to reduce deforestation under its 2011 forest conservation policy despite ongoing forest destruction by other palm oil producers in the sector, finds a new assessment by Greenomics, an Indonesian activist group. However the report finds GAR’s operations are not completely deforestation-free.

Using a combination of satellite data and legal documents filed with the Ministry of Forestry, the Greenomics report [PDF] shows that GAR-owned companies are maintaining significant blocks of forest within their concessions in Indonesian Borneo despite having licenses to clear the land. The results indicate that GAR appears to be respecting elements of its commitment not to convert high carbon stock land for oil palm plantations.

But the report also finds incidents of tree-cutting in some areas. It notes that GAR companies have made “deforestation payments” to the Ministry of Forestry, as stipulated under the forest code, confirming the land clearing that is apparent in satellite images.

“There is clear evidence that the GAR palm oil plantation companies have continued to clear commercial tree species during the first and second years of implementation of the GAR FCP,” states the report. Some of the clearing took place in areas that were at one time designated as high conservation value forest (HCVF) by WWF.

Landsat images acquired by Greenomics showing a concession owned by GAR subsidiary PT Paramitra Internusa Pratama (PT PIP), which operates in Kapuas Hulu Regency in West Kalimantan Province, prior to and since the introduction of the GAR FCP.

Yet those findings may not tell the complete story. The Greenomics report did not rely on ground-truthing, making it difficult to determine what forest was cleared or even if it could still be considered HCVF due to fragmentation and degradation. Furthermore, the scale of the clearing is small, suggesting that remnant patches of forest — rather than significant blocks — were cleared by plantation developers.

For that reason, Greenomics takes a relatively positive view on GAR’s performance relative to other plantation developers operating in the region.

“GAR’s FCP has actually reduced deforestation practices during the development of palm oil plantations,” Elfian Effendi, Executive Director of Greenomics, told “Our ongoing study suggests that while GAR companies are working for a reduced deforestation practice, many other palm oil companies are still clearing natural forest at the massive level.”

But Effendi added that GAR should be more transparent about the forest area that is apparently still being cleared.

“The precise details of the deforestation that occurred during the implementation of the GAR FCP need to be transparently revealed to the public,” he said. “GAR should release the HCVF/HCS areas in the GAR concessions.”

For its part, GAR says it remains committed to its policy.

“Golden Agri-Resources Ltd (GAR) reiterates its commitment to the Forest Conservation Policy (FCP) which focuses on no development on High Carbon Stock (HCS) forests, High Conservation Value (HCV) areas and peat lands; free, prior and informed consent from indigenous and local communities; and compliance with all relevant laws and internationally accepted certification principles and criteria,”

“In keeping with our multi-stakeholder engagement approach, we will be providing updates on our pilot project in PT Kartika Prima Cipta (PT KPC), West Kalimantan, Indonesia on HCS Forest Conservation that was launched on 13 March 2013.”

The high conservation value and carbon stock assessment is being conducted by The Forest Trust (TFT), the NGO that is implementing GAR’s forest conservation policy. TFT is also working with GAR’s sister company, Asia Pulp & Paper, to implement a similar policy its concessions. Both deals are viewed by conservationists as a critical step for getting private sector support for the Indonesian government’s push to reduce emissions from deforestation and peatlands degradation.

Later this month, Indonesia is expected to renew a two-year moratorium on new forestry concessions across 14.5 million hectares of previously unprotected forest and peatlands as part of this initiative. The moratorium has been opposed by some companies in the plantation and logging sectors, which effectively lobbied to weaken the measure shortly before its implementation in May 2011. Nonetheless, the moratorium is generally viewed by environmentalists as having helped created momentum for the broader effort to reform management of forest lands in Indonesia.

Oil palm fruit

Palm oil production has emerged as one of the most important drivers of deforestation in Indonesia since the mid-1980s. Due to its high yield, palm oil is one of the most profitable commodities in the tropics. Environmentalists have targeted the crop as a threat to endangered orangutans and a substantial source of greenhouse gas emissions from forest destruction and degradation, drainage, and conversion of carbon-dense peat swamps.

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