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Palm oil giant Wilmar quits High Carbon Stock Approach citing governance issues

The world's largest palm oil trader says a failure to fairly review an objection to its co-chairing the HCSA prompted its resignation. Greenpeace suspects that Wilmar is quitting to avoid close scrutiny of its no-deforestation commitments.

Wilmar International has resigned from High Carbon Stock Approach (HCSA), a civil society organisation that determines which forests should be protected according to their conservation value, after six years of membership.

Wilmar stated on Thursday that poor governance of HSCA has prompted the Singapore-headquartered palm oil trader to withdraw from the organisation, while insisting that it will continue to use HCSA’s methodology to implement the no deforestation, no peat, no exploitation (NDPE) policy it made in 2018.

The company was appointed co-chair of HCSA in 2017, but stepped down the next year after an objection against its influential role at the body from non-governmental organisation Greenpeace, the other co-chair of HCSA.

Greenpeace has been campaigning hard against Wilmar in recent years, claiming the company has not adhered to the high-profile pledge it made in 2018 to weed out deforestation from its supply chain.

Wilmar has disputed the objection made by Greenpeace, and claimed in a statement posted on its website that it was “not raised as a grievance and did not follow due process.”

They [Wilmar] are resigning because they don’t want to be held to their [zero-deforestation] commitments.

Grant Rosoman, forest solutions team leader, Greenpeace, executive committee member, High Carbon Stock Approach

The firm complained that the review of the objection has still not been resolved, and claimed that the challenge to its status has been expanded to include all grower members, which it says goes against HCSA’s rules of a grower and an NGO sharing leadership of the organisation.

Wilmar also claimed that HCSA’s finances are not being properly managed, and the organisation is in the red. Wilmar was the treasurer of HCSA until 2018, when it stepped down as co-chair. The firm pointed out that the position is still vacant.

Greenpeace forest solutions team leader Grant Rosoman, who is an executive committee member of HCSA, told Eco-Business that it is disappointing that Wilmar has quit the organisation, as it has weakened the company’s NDPE commitments.

“Now more than ever we need business to support tools that stop deforestation such as HCSA given that deforestation and habitat destruction creates the conditions for pandemics such as Covid-19, as well contributing to the climate emergency and biodiversity crisis,” he said.

Rosoman said the objection against Wilmar was made because the grower was not meeting the membership requirements of the HCSA—that companies implement the high carbon stock approach throughout their supply chains—and the position of Wilmar as co-chair was a “reputational risk” to HCSA.

He said that the executive committee—which includes palm oil firm Golden Agri-Resources as well as NGOs Forest Peoples Programme, Rainforest Action Network, and World Wide Fund for Nature—had accepted the objection to Wilmar’s position at HCSA, and the review was just a few days away from completion.

“They [Wilmar] are resigning because they don’t want to be held to their [NDPE] commitments,” Rosoman said. 

While he welcomed Wilmar’s pledge to continue to use HCSA’s methodology, Rosoman said that HCSA’s toolkit “doesn’t work by itself”; it needs commitment from members to continue to develop and assure the quality of the framework, as well as be subject to monitoring to ensure conservation pledges are adhered to.

Now [as a non-member of HCSA] Wilmar won’t be obliged to supply data on where the areas of high carbon stock are in its supply chain that require preservation,” he said.

Wilmar’s criticism of the financial management of HCSA was “another diversion”, said Rosoman, while conceding that some growers had said they’d like to see a bigger budget.

“We run a tight ship. We’re not a profit-making enterprise. We run it to cost,” he said, adding a chartered accountant has been hired to manage the finances, which are independently audited and financial reports are provided to donors.

Quitting is never the answer. HCSA is not perfect, but it is a young non-profit that’s been working really hard with all kind of stakeholders to develop the only no-deforestation methodology.

Aida Greenbury, founding member, HCSA, advisor, Serikat Petani Kelapa Sawit

HCSA executive director Judy Rodrigues, who has assumed the duties of co-chair until the objection is resolved, added in a statement: “HCSA members are required to comply with the HCSA membership requirements including the eligibility requirement and code of conduct for members.

Aida Greenbury, who represents smallholder oil palm farmers for HCSA through farmers union Serikat Petani Kelapa Sawit (SPKS), commented that while not perfect, the young non-profit has been working hard to ensure no-deforestation methodologies are implemented in tropical landscapes, and has been beneficial for smallholders and local communities.

“Now it’s definitely not the time to quit, especially since many companies are reported to have backtracked their no-deforestation commitments. It’s time to support organisations like HCSA more,” said the former sustainability head at pulp and paper giant Asia Pulp and Paper, a founding member of HCSA.

Wilmar launched an ambitous plan to cut out forest destruction from its supply chain by this year in October 2018, the week after Greenpeace activists protested on its refineries in Indonesia. At the time Greenpeace welcomed the move, but a year later the NGO halted engagement with the company, declaring Wilmar had failed to live up to its NDPE commitments.

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