Indonesia: Green groups gaining ground

Bruce Gale, Straits Times 16 Jul 10;

THE activities of environmental groups may ultimately prove to be more important than government policy in saving Indonesia's forests.

Last month, soon after conservation group Greenpeace released a report entitled How Sinar Mas Is Pulping The Planet, retail giant Carrefour announced that it had decided to suspend all orders of paper supplies from Sinar Mas subsidiary Asia Pulp & Paper (APP).

The Sinar Mas Group is one of the largest conglomerates in Indonesia. Founded by Chinese tycoon Eka Tjipta Widjaja in the early 1960s, its main investments are in pulp and paper, oil palm plantations, property and financial services.

'Carrefour is committed to sustainable development and has decided to cease sourcing APP supplies for private label products from the middle of this year until further notice,' Carrefour Indonesia external communication manager Hendri Satrio told the media.

United States-based food producer Kraft Foods has announced a similar decision.

In recent months, the corporate customers of Sinar Mas' subsidiaries have been abandoning the company in droves. In December last year, a similar Greenpeace report targeting the environmental impact of Sinar Mas Agro Resources and Technology's (Smart) oil palm plantations prompted Unilever Indonesia to announce that it would not be ordering any more palm oil from the subsidiary. Swiss-based food producer Nestle followed suit this March.

In its latest report, Greenpeace accuses APP of secretly planning a massive expansion of pulp mills. It also claims that many of the new forestry concessions being sought by the company overlap with the habitats of endangered species. In addition, it charges that the company has cleared peatland extending more than 3m in depth, an illegal move under Indonesian law. (Peatland is made up of semi-decomposed vegetation, and acts as a carbon sink.)

These Greenpeace reports, together with the reaction of major Western corporations, come in the wake of the lukewarm response of environmental groups to a US$1 billion (S$1.38 billion) deal President Susilo Bambang Yudhoyono made with Norway in May. The agreement imposes a two-year moratorium on new permits to clear virgin forest and peatland. Critics charge that the pact is not sufficiently comprehensive as it fails to place limits on existing forestry concessions. Many also believe that widespread corruption and bureaucratic dysfunction will ensure that the agreement fails in its objectives.

Could environmental groups succeed where governments have failed?

A series of recent incidents across the world suggests that conservationist groups are indeed gaining influence.

A Greenpeace report last year that accused cattle ranchers in the Amazon of deforestation, for example, forced cattle companies to improve their practices after corporate buyers such as Wal-Mart, Nike and Timberland demanded greater accountability. And a campaign by environmentalists forced several European companies to announce early this year that they would no longer trade in rosewood illegally logged in Madagascar.

Worried about negative consumer reaction, many corporate buyers are also carrying out their own investigations. The British media reported that the decision of Anglo-Dutch company Unilever to suspend an annual £20 million (S$41.9 million) contract with Smart last December came after the company had obtained photographic evidence of Sinar Mas clearing protected rainforests. Tellingly, however, the decision was announced only after the Greenpeace report naming Unilever as one of Smart's customers appeared.

Sinar Mas has denied Greenpeace's allegations and the debate continues over the report's accuracy. Governments, corporations and conservationist groups frequently disagree over methodologies used in assessing environmental damage.

But the fact that Unilever's investigators came to a similar conclusion as Greenpeace suggests that the palm oil industry's self-regulation may not be working. Unilever had set out to verify the extent to which Smart was complying with the standards set by the Roundtable on Sustainable Palm Oil (RSPO) - a self-regulating industry body formed in 2004 to prevent illegal forest clearance. It includes Smart as one of its members.

Some environmental groups have accused the RSPO of being toothless. A more serious concern, however, is that demand for RSPO-certified sustainable palm oil has so far been slow to materialise. Only if consumers are convinced that the products they buy are linked to environmentally friendly supply chains will such certification programmes prove an effective means of arresting deforestation.

In the meantime, it seems the environmentalists are gaining ground.