Sinar Mas – The Forest Trust Agreement
Much has been made of the recent decision by Sinar Mas’ palm oil division, Golden-Agri Resources (GAR), to cede to Greenpeace demands. The result is an agreement with The Forest Trust, a UK-based NGO that promotes green-acceptable consumer goods. But the agreement that GAR has signed up to could severely hamper the company’s growth.
GAR signed the agreement on February 9. It was hailed by some environmentalists as a significant step forward. The regular critics of Sinar Mas – campaigners included – declared a cautious victory.
But as many corporations and NGOs alike are aware, signing the agreement is the easy part. Agreeing on what is acceptable on the ground is another matter.
The GAR/TFT agreement requires GAR to not develop ‘high carbon stock’ forests, high conservation value forests and peat lands, as well as adhere to free, prior and informed consent (FPIC) for indigenous/local communities and comply with all laws and RSPO principles and criteria.
GAR is already a member of the RSPO, and it can be assumed it operates legally. Membership within RSPO means it does not develop HCVF forests. Palm plantations are generally not suited to peat lands. The two new catches for GAR are high carbon stock (HCS) forests and FPIC.
BAPPENAS, Indonesia’s planning agency considers ‘high carbon’ as anything over than 100 tonnes of carbon per hectare (tC/ha); yet the TFT agreement puts this at 35 tC/ha. This would, in theory, exclude all forests. Logged over forests and acacia plantations contain as much as 200 t/C/ha; rubber plantations go up to 96 t/C/ha. Even palm plantations themselves contain as much as 65 t/C/ha. Anything other than imperata grasslands is off limits.
In the NGO world FPIC generally only refers to indigenous peoples rather than local communities. The reason for this is simple: many remote rural communities actually want large-scale forestry or agricultural developments to generate economic growth. Yet tenure in Indonesia is complex; in most areas there are indigenous communities, local settled communities and domestic migrants that were part of the government-sponsored transmigration program of the 1980s.
Negotiating with one local group is manageable, but dealing with as many as four – who are often in conflict – will delay and complicate any investment by the company.
If GAR thought that Greenpeace’s previous actions were disruptive, they’re about to become more so. Western environmentalists hate deforesters immensely, but they hate reneging deforesters even more.
Source: Palm Oil – The Green Development Oil Newsletter - Issue 12, March 2011
