Banks And Brands Must Clean Up Their Conflict Palm Oil Problem

For many years now, the research has been verified and the evidence has been presented all the way up the palm oil supply chain, from the jagged edges of freshly cut rainforest to the boardrooms of some of the largest household name food brands in the world. Consumers have rallied en masse to make their demands clear that they want Conflict Palm Oil connected to rights abuses and environmental destruction to go. And the promises have been made - hundreds of major brands and banks have publicly committed to remove problematic palm oil from their products, most with 2020 as their deadline.

But the fact remains that new evidence of human suffering, illegal deforestation, burning of peatlands and the destruction of habitat of critically endangered wildlife continues to emerge in connection to known suppliers of these same companies. Are we really to believe that these multibillion-dollar international behemoth corporations with expertise in managing the logistics of complex global supply chains just can't figure out how to get this right? Each new case of conflict and destruction raised must be used as an opportunity to fix what is broken and set up systems that prevent the same abuses from occurring again. The actions taken need to be swift, specific, and followed through to the end.

Just this week, new field investigations by Rainforest Action Network (RAN) and documentation by Indonesian NGOs LBH Banda Aceh and Walhi Aceh have uncovered evidence that major brands continue to source Conflict Palm Oil. Controversial palm oil company PT. Dua Perkasa Lestari (PT. DPL) has continued to supply Conflict Palm Oil to major brands including Nestlé, Mars, Mondelēz, PepsiCo and Unilever via palm oil giants Golden Agri Resources (GAR) and Permata Hijau, despite PT. DPL’s gross violation of the rights of the Pante Cermin community in Aceh, Indonesia.

LBH Banda Aceh and Walhi Aceh’s investigation reveals a decades-long unresolved conflict with the Pante Cermin community that includes a lack of proper permits by PT. DPL to operate in the first place, well-documented land grabbing of customary lands, destruction of community food crops without Free Prior and Informed Consent (FPIC), and the systematic use of military force to intimidate and displace community members in violation of the policies of Indonesia’s Ministry of Internal Affairs.

The fact that a company like PT. DPL has continued to supply the global market while actively violating the rights of local communities, misusing security apparati to intimidate community members, and ignoring substantial legal problems in its permitting process, means that major brands are not taking their responsibility to implement their ‘No Deforestation, No Peatland and No Exploitation’ policies seriously.

Since PT Dua Perkasa Lestari’s permit was issued in 2008, the community has been threatened with forceful eviction from their land. Most of the community members cannot survive because of economic limitations and other reasons but many are still committed to fight for their land. LBH has reported this case to the Southwest Aceh District Government, the Aceh Provincial Government, the Aceh Parliament and the Presidential Staff Office, but it has still not resolved the conflict, and no one has come to verify the community’s land claims. With the COVID pandemic, it is more urgent than ever to protect communities’ rights to access their land to sustain their food and livelihood.

The NGOs behind the investigation say Nestlé, Mars, Mondelēz, PepsiCo and Unilever need to place PT. DPL on a ‘No Buy’ list and engage with their suppliers and PT. DPL to immediately resolve this land conflict as a condition to resume their business.

Multinational banks have also been complicit in facilitating GAR’s reckless palm oil sourcing practices. Bank Negara Indonesia, Bank Central Asia and Dutch bank ABN AMRO are three major banks with known active loans to GAR at this time. Japanese bank Mitsubishi UFJ Financial Group has also been a major lender to GAR over the last few years.

It is shocking that ABN AMRO continues to finance a palm oil company that has repeatedly failed to respect human rights in its own operations and those of its third-party suppliers like PT. Dua Perkasa Lestari. It is a blatant disregard of the bank’s human rights commitments.

GAR is part of the Sinar Mas Group, a group of companies controlled by the Widjaja family. Sinar Mas’ palm oil divisions received in excess of USD 3.5 billion in loans and underwriting for the period 2016 - April 2020 (the same period where evidence of human rights violations and deforestation by PT. DPL was raised with GAR). Banks that are financing GAR must intervene immediately to ensure that GAR adopts a No Buy position for PT. DPL until agreements are in place to return land to the Pante Cermin community members. If GAR fails to do so they must suspend financing for the palm oil giant.

There just is not any further time for excuses and half measures. The communities whose land has been stolen cannot wait any longer for resolution. And the iconic wildlife species, the tigers, elephants, orangutans and rhinos whose numbers in many cases are dwindling to the hundreds of individuals, certainly cannot wait. Extinction and community eviction are permanent consequences of sloppy, irresponsible corporate behavior. They are unacceptable and must end, so let’s work together to truly make 2020 the turning point it was promised to be.

Laurel Sutherlin is Senior Communications Strategist at Rainforest Action Network