Mounting complaints put Wilmar under scrutiny

The world's largest palm oil trader faces accusations against unresolved land grabbing and human rights issues by its concessions in Asia and Africa, but says it stands by its sustainability policy.

Two years after Wilmar International set an ambitious drive to commit to zero-deforestation and protection of indigenous rights, its suppliers are still at the center of land disputes with indigenous communities in Asia and Africa, civil society groups reported earlier this month.

Forest Peoples Programme (FPP), which has been tracking the Singapore-listed firm’s ground operations in Borneo, Sumatra, Uganda and Nigeria, said on July 8 that indigenous communities have accused Wilmar of resorting to “dirty tricks” to secure licenses and resolve land-grabbing issues.

The huge demand for palm oil due to its wide use – from food to cosmetics and even as biofuel - has led to rampant clearing of forests in Southeast Asia and Africa to make way for plantations, and Wilmar is responsible for 45 per cent of the world’s trade of this commodity, making it the largest palm oil trader.

It pledged in 2013 to a ‘No Deforestation, No Peat and No Exploitation’ sustainability policy within its supply chain, which means the firm’s subsidiaries and third-party suppliers of palm oil must abide by the policy. 

Patrick Anderson, a policy advisor with FPP, said this commitment may look impressive on paper, but investors should be warned about what is actually happening on the ground, given the range of complaints NGOs have received from various indigenous communities.

“Investors and buyers must look very carefully at what is happening on the ground when they assess company promises of no deforestation and no exploitation,” Anderson noted in a statement.

FPP cited several cases in Indonesia which showed Wilmar has not been able to seek proper consent from local communities to operate on their land.

Investors and buyers must look very carefully at what is happening on the ground when they assess company promises of no deforestation and no exploitation.

Patrick Anderson, policy advisor, Forest Peoples Programme

In May this year, Indonesian human rights group Lingkaran Advokasidan Riset (LinkAR) Borneo filed a complaint letter to certification group Roundtable on Sustainable Palm Oil (RSPO) claiming that PT Swadaya Mukti Prakarsa, a Wilmar supplier and subsidiary of First Resources Group have violated several RSPO requirements. 

Wilmar is a member of the RSPO, which requires that members must adhere to its principles, including the Free Prior and Informed Consent to communities. 

FPP also noted the case of the Minangkabau community of Kapa in West Sumatra where one of Wilmar’s subsidiaries, PT PHP1, is accused of going behind the community’s back to secure land rights.

The Minangkabau community in 2014 found that Wilmar was seeking a permit to take over their lands without their agreement. They took action by formally filing a complaint with RSPO. Wilmar agreed to meet with community members and the government land bureau to legally settle the matter.

However, the community charged that Wilmar did not honour its commitment and one of its leaders were put in jail for two months. “While we were waiting to meet the land bureau, Wilmar went and got a business license behind our backs. Then we found ourselves harassed by the local police on trumped up charges,” Samsiwa Rangkayo Mudo, a Kapa community leader, told FPP.

The Kapa community now demands that Wilmar withdraw the business license of PT PHP.

FPP also pointed to the palm oil company’s lack of accountability in past actions such as the alleged bribery and land grabbing case filed at the World Bank against another concession, PT Asiatic Persada, back in 2011.

Indigenous group Batin Sembilan communities in Jambi province, Sumatra complained that the community was expelled from its land and dwellings of 83 families were destroyed. While the company agreed to settle the dispute through the International Finance Corporation’s mediation mechanism, the Compliance Advisory Ombudsman, the negotiations were delayed.

World Bank documents revealed in March 2015 the cause of these delays, stating that a Wilmar personnel tried to bribe one of the mediators and that a case had to be filed, setting aside the problem of the Batin Sembilan people. Ultimately, CAO dropped the case after Wilmar sold the concession, leaving the indigenous group without their land, FPP explained.

The people of Batin Sembilan have become the victims of Wilmar’s deceitful acts, Pak Nurman Nuri, a leader of the Batin Sembilan people from Sungai Bahar village, commented to FPP. 

“We think Wilmar still has a responsibility for the damage and loss it caused to my people,” he stressed. 

Friends of the Earth (FoE) and Environmental Rights Action-Nigeria also released a new report on July 8 exposing Wilmar’s destructive activities in Nigeria. The report cited interviews with communities regarding human and environmental rights abuses in a large-scale land acquisition in Cross River State, Nigeria.

With the new list of cases, Wilmar’s credibility to implement its own sustainability programme has come under scrutiny.

Anne van Schaiksustainable finance campaigner with FoE Europe, emphasised that the company’s sustainability policy is not a guarantee that it could solve problems of its own making.

“The company’s failure to respect human rights in Nigeria is yet another example that transnational corporations like Wilmar cannot be trusted to police themselves,” van Schaik said.

Wilmar in a detailed statement on July 16 responded to FoE’s allegations in the report, claiming it continues to implement responsible palm oil development in Nigeria and Uganda with the help of non-profit group The Forest Trust.

“Many of the allegations are rehashed from earlier reports to which Wilmar has responded or in which the issues raised have been addressed,” the firm said.

However, the firm added that it is taking its stakeholders’s feedback seriously to review and verify FoE’s report. 

“There are misleading facts in the report which Wilmar will clarify as well as areas the Group acknowledges that can be improved and assures that corrective actions will be taken accordingly,” it noted.

Meanwhile, the company responded to FPP’s allegations on July 22, saying it has been cooperative in resolving the case of the Minangkabau community with the RSPO. Wilmar also refuted the allegations and complaints filed against its role in the criminal sanctions that led to Minangkabau leader Gampo Alam having been jailed in the midst of the land dispute.

The firm and RSPO have received confirmation from Gampo Alam’s complainant M. Irfan, that the police report filed against Alam has nothing to do with PT PHP and Wilmar.

“Wilmar remains committed to resolving this case, and will continue to be cooperative in the RSPO complaints process,” the firm said.

This story has been updated on July 23 to reflect Wilmar’s response to FPP’s statement.

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