Indonesia: Palm Oil Companies Keep Breaking the Promises They Claim to Keep

The Roundtable on Sustainable Palm Oil (RSPO) was created in 2004 by the palm oil industry and civil society groups (including conservation groups like the WWF) to set guidelines for greener oil production and to encourage industry expansion without social conflict. 15 percent of palm oil produced is now certified as “sustainable” by the RSPO. A just-released report says that RSPO members are not keeping their pledges by “violating the rights of indigenous peoples and local communities in the forests and peatlands of tropical nations worldwide.”

The study was put together by U.K.-based Forest Peoples, Transformasi Untuk Keadilan Indonesia (a human rights organization in Indonesia) and Sawit Watch (a founding member of the RSPO). It looks closely at 16 oil palm operations (many run by RSPO members) that have not upheld human rights and environmental standards as required under RSPO criteria.

Land grabs, violation of laws and court rulings, bulldozing people’s dwellings into creeks, selective consultation between companies and co-opted community representatives: local communities reported about all of these to monitors from the three human rights organizations who authored the report. Palm oil producers have often failed to obtain permission from communities in violation of a United Nations mandate known as free, prior and informed consent (FPIC). The destruction of the forests has also further endangered species like orangutans and Sumatran tigers.

As Norman Jiwan, director of Transformasi Untuk Keadilan Indonesia says, “Since its founding the RSPO has adopted good standards, but too many member companies are not delivering on these paper promises.”

The report has been published to coincide with the annual meeting of the RSPO in Medan, Indonesia. This city can be considered the unofficial capital of the palm oil industry. Medan is the largest city in the province of Sumatra, which is where many of Indonesian plantations, processing plants and other facilities in the palm oil supply chain are located. Indonesia is the world’s largest producer and exporter of palm oil. By 2020, it is projected that more than 10 percent of the country will be planted with palm oil trees.

Jefri Saragih, Executive Director of Sawit Watch, notes that “we can point to one or two good results on the ground.” But in reality “there are thousands of land conflicts with oil palm companies in Indonesia alone, and the problem is now spreading to other parts of Asia and Africa.”

While senior company executives may have committed to ethical practices, “too often operational managers in the field — lacking the necessary training and incentives — have failed to respond.” Marcus Colchester, Senior Policy Analyst of Forest Peoples, points out that many governments still have laws that “deny or ignore indigenous peoples’ and communities’ land rights.” Global investors, retailers, manufacturers and traders must all, he emphasizes, “insist on dealing in conflict-free palm oil, and national governments must up their game and respect communities’ rights.”

The need for developing sustainable practices for producing palm oil is more than obvious. Indonesia is currently ranked third in the world for carbon dioxide emissions; deforestation and destruction of the nation’s peatlands are some of the main reasons for this. Palm oil has been touted for health benefits but these are questionable. Companies must implement the ethical pledges they sign on to because, in the words of Colchester of Forest Peoples, RSPO was meant not to be “a marketing ploy” but “to represent a wholehearted dedication to respecting the lives and livelihoods of indigenous peoples and local communities, and the lands that they call home.”