On 25 June 2018, Greenpeace published the report titled “Rogue Trader: Keeping deforestation in the family.” Through the report, Greenpeace presents details of the palm oil businesses conducted by Mr. Martua Sitorus, his brother Mr. Ganda and family members in relation to various companies and concessions referred to collectively as Gama Corp. The report draws connections between Wilmar and the various Gama Corp. companies to make the conclusion that Wilmar and Gama Corp. are related parties. The report also outlines breaches of Wilmar’s NDPE policy in the form of deforestation associated with the Gama Corp. companies. Greenpeace concludes with a call to action centered on suspension of all trade with companies controlled by Martua Sitorus and his family. Having drawn the conclusion that Wilmar and Gama are related parties, Greenpeace also recommends that companies suspend trade with Wilmar until implementation of remedial steps to address the policy breaches.
In accordance with Wilmar’s membership with TFT (The Forest Trust), we are working with Wilmar to address the challenges put forth by Greenpeace and provided input to the letter of response Wilmar provided to Greenpeace. TFT does not agree with the conclusion that Wilmar and Gama Corp. are the same group. TFT understands that there is a group of companies owned and/or managed by Mr. Martua Sitorus and Mr. Ganda which is distinct from the Wilmar company. TFT accepts Wilmar’s explanation that Wilmar and the Gama Corp. group of companies are separate groups. Wilmar acknowledges however that there should have been stricter oversight of the verification of ownership in respect to these companies. To ensure stricter compliance with their NDPE policy, Wilmar has decided to implement an NDPE action committee to ensure 100 percent arm’s length decision-making that demonstrates the independence of Wilmar from Gama Corp. Wilmar have committed to cease sourcing from all companies that are allegedly associated with Gama Corp. In addition, Wilmar has been in direct communication with Gama Corp. to facilitate establishment of Gama’s NDPE policy and have asked former COO (Chief Operating Officer) Mr. Teo Kim Yong to assist them in doing so.
TFT welcomes Greenpeace’s call for action on steps to strengthen the implementation of commitments. TFT is engaging with Wilmar to support implementation of their NDPE policy and address the specific calls for action from Greenpeace as follows:
Actions 1 and 2 from the Greenpeace report
- Taking responsibility for all deforestation and peatland clearance in Gama concessions after 5 December 2013.
- Publishing a time-bound plan to restore all areas developed in violation of Wilmar’s NDPE policy.
TFT position on Action 1 and 2
TFT expects that members take a strong stance on existing suppliers who are found to be clearing forest. For cases of recent deforestation, Wilmar must ensure that suppliers stop clearing forest by requesting that they implement a moratorium on land development and then establish new land development plans that avoid deforestation by applying the HCS Approach. Wilmar should be transparent and will be held accountable by TFT for ensuring these steps are taken by all its suppliers.
TFT does not believe it is practical to restore lands after they have been converted to palm oil, and we do not believe that palm oil buyers should take responsibility for redressing deforestation conducted by their suppliers. But TFT does expect that companies will take responsibility for redressing their own deforestation and will hold their suppliers accountable for doing the same.
Further, TFT expects its members to establish conditions for palm oil producers to re-enter (or enter) responsible markets after they have been suspended for deforestation. Suppliers must ensure that they will not conduct future deforestation and also confirm that they will address the recent deforestation that led to their suspension. TFT believes that efforts to address recent deforestation should be directed toward protecting forests that are still standing through one of the following three approaches:
- Through companies that have made commitments to protect forests in their concessions and need financial support to do so.
- To communities to help them protect forests in their lands.
- To conservation NGOs with tenure over forests who need financing to protect them.
TFT is co-developing a Forest Conservation Fund that will provide the palm industry with a simple mechanism to protect forests in their supply chains.
Action 3 from the Greenpeace report
- Assuming operational control of the relevant Gama concessions to ensure compliance with this restoration plan and Wilmar’s NDPE policy.
TFT position on Action 3
TFT does not believe it is realistic to expect that Wilmar will take operational control of its suppliers’ concessions, but encourages Wilmar to enter into meaningful dialogue with the Gama Corp. regarding establishing its own NDPE commitment.
Action 4 from the Greenpeace report
- Publishing concession maps for all producer groups within its supply chain, as a first step toward only trading palm oil from producer groups that have been independently verified as compliant with its NDPE policy by 2020.
TFT position on Action 4
Wilmar have released their own concession boundaries publically as part of their commitment to transparency. TFT believes this is a good demonstration of transparency by Wilmar and expects that Wilmar will request the same level of transparency from its suppliers in order to raise the standard of transparency within its supply chain.
Wilmar has a supplier monitoring program to identify deforestation within concessions linked to their supplier groups. This is a concrete effort to actively monitor and intervene with suppliers who conduct forest clearance. However this monitoring program has limitations, because it is not public and verifiable nor does it cover 100 percent of the supply base. Therefore, we agree that this monitoring can be improved. Specifically, TFT would like to see Wilmar provide greater transparency into its monitoring efforts and increase the extent of coverage of its monitoring and intervention efforts.
TFT acknowledges the prevailing expectation that supply chains be independently verified as compliant with NDPE policies by 2020. At the same time, we acknowledge that the industry is still working to improve compliance on key NDPE requirements. As such, we encourage companies to continue to increase transparency and efforts to implement their policies. TFT encourages its members to create clear roadmaps that explain the efforts they have and will make to reach compliance with NDPE; and that they are transparent about these plans. With strong action plans in place and a commitment to continuously improve transparency, we believe our members can deliver on their NDPE commitments and stand up to any future verification methods.