Golden Agri-Resources working on forest conservation project

Julie Quek Channel NewsAsia 9 Feb 11;

SINGAPORE : Singapore-listed Golden Agri-Resources (GAR) has said it will work with the Indonesian government and green groups to build a "sustainable palm oil industry" in Indonesia.

Last year, an independent environmental audit gave a mixed score card to GAR and its subsidiary PT SMART Tbk, saying that the company cleared forests housing endangered species.

The Forest Trust, which is a Geneva-based global non-profit organisation, said it will help the palm oil company save vulnerable forests in Indonesia, while remaining profitable.

With an annual revenue of US$2.3 billion, GAR is the largest palm oil producer in the world's leading palm oil-producing country.

The company and The Forest Trust have jointly developed a Forest Conservation Policy to ensure that GAR has no deforestation footprint.

The policy promotes non-development on "High Conservation Value" forest areas and peat lands, as well as "High Carbon Stock" forests.

According to The Forest Trust, the total area of land allocated for oil palm production has more than tripled globally since the early 1980s, reaching nearly 14 million hectares in 2007.

It added that most of this expansion has occurred in Indonesia.

- CNA/ms

Golden Agri turns over a green leaf
It inks pact to reduce impact of palm oil operations on forests
Jessica Cheam Straits Times 10 Feb 11;

SINGAPORE-LISTED Golden Agri- Resources (GAR) yesterday announced a new forest conservation policy intended to ensure its palm oil operations have less impact on forests.

The move - seen as a response to intense pressure and lobbying by green groups such as Greenpeace recently over allegations of illegal forest clearing - will not have a significant impact or cost on its operations, said the firm.

GAR is the world's No.2 palm oil producer and the largest in Indonesia with annual revenues of US$2.3 billion (S$2.9 billion). It signed a deal yesterday in Jakarta with The Forest Trust (TFT), a Geneva- based non-profit organisation, which will start work now with GAR to identify high carbon-stock forests, high conservation value (HCV) areas and peat lands.

These significant areas are defined as forests that contain or store 35 tonnes of carbon per hectare - a definition that may change after consultations with stakeholders, the company said.

TFT's involvement is also intended to prevent the plantations from contributing to the destruction of forests that are particularly valuable in terms of environmental preservation, biodiversity, landscape, or to the livelihoods of local residents.

TFT executive director Scott Poynton said yesterday's agreement 'represents a revolutionary moment in the drive to conserve forests. This shows that the private sector can quickly change its practices around forest destruction if the right factors are in place'. The NGO began working with GAR last year after Nestle engaged TFT to adopt responsible sourcing guidelines for its palm oil suppliers.

Allegations that GAR's Indonesian unit, PT Smart, was illegally clearing HCV forests and threatening biodiversity caused the loss of big-name clients such as Nestle, Unilever and Burger King.

Last year, GAR commissioned an independent audit to investigate the allegations, but after the results were released, GAR and Greenpeace clashed on how it was interpreted.

Contacted yesterday, Greenpeace spokesman Bustar Maitar said the move 'could be good news for the forests, endangered species like the orang utan and for the Indonesian economy'. �If GAR 'does make these changes, large areas of forests will be saved. But now it has got to implement these plans, and we're watching closely to make sure this happens'.

Greenpeace said the move must have the Indonesian government's support 'by stopping any more licences being granted for forest and peatland clearance, and by reviewing activities in areas where licences have already been handed out'.

Indonesia's Vice-Minister of Trade Mahendra Siregar, who was at the press conference yesterday, said Indonesia will strive to be the best in this sector, and that means adopting sustainable business practices. GAR chairman and CEO Franky Wijaja said the agreement is a 'first step' towards a wider collaboration with industry players and the company was committed to taking a leadership role.

Golden Agri inches higher on forest conservation plan
Linette Lim Business Times 10 Feb 11;

SHARES of Golden Agri-Resources (GAR) rose yesterday on news of the company's latest forest conservation initiative. The counter closed trading 0.7 per cent higher, at 72 cents.

GAR and its subsidiaries, including PT Smart, yesterday announced a forest conservation policy (FCP) with the support of the Indonesian government.

The FCP will ensure that there will be no development on high carbon stock (HCS) forests, peat lands and high conservation value (HCV) forest areas.

GAR and its subsidiaries have been under fire since Greenpeace published a damning report on its environmental practices last April. This led to a loss of business, with Unilever and Nestle dropping PT Smart as their supplier.

In response, GAR commissioned an independent investigation headed by Control Union Certification and the BSI Group.

The FCP that was announced is in collaboration with non-profit organisation The Forest Trust (TFT).

TFT is also currently working with Nestle to adopt 'responsible sourcing guidelines for its palm oil suppliers'.

Peter Heng, GAR's managing director of communications and sustainability, denied that the FCP is a reaction to the loss of Nestle's business. 'These actions are internally driven,' he said.

Fieldwork related to the FCP will be conducted in the first half of this year and it is expected to take six months.

It will determine how many of its plantations are HCS forests. Land with more than 35 tonnes of carbon per hectare will be used as the provisional definition of an HCS forest.

Mahendra Siregar, Indonesia's Vice-Minister for Trade, commended the initiative as 'an example to find concrete solutions and a model for resource-based sectors which is key to Indonesia's sustainable development'.

He had separately announced an Indonesia sustainable palm oil certification initiative that will start in 2012. The trial run of 20 companies will involve two of PT Smart's subsidiaries, a GAR spokeswoman said.

Referring to the implementation of the FCP, Mr Heng said: 'At this moment, the additional cost of this policy will not be material.'

GAR and its subsidiaries are also working with TFT to ensure that all its plantations achieve roundtable for sustainable palm oil certification by December 2015.

According to TFT's executive director Scott Poynton, Greenpeace has said that it is cautiously supportive of the announcement and will continue to monitor GAR's progress.

Indonesian palm oil giant vows to save forests
Yahoo News 9 Feb 11;

JAKARTA (AFP) – Indonesia's biggest palm oil producer pledged on Wednesday to follow new standards to protect carbon-rich forests and peatlands, in a move cautiously welcomed by environmentalists including Greenpeace.

Golden Agri-Resources (GAR) and its subsidiary SMART, part of the Sinar Mas group, said it would work with Geneva-based consultancy The Forest Trust (TFT) to ensure its palm oil is sustainably harvested.

"We will not develop plantations on High Carbon Stock (HCS) forests, High Conservation Value forest areas and peatlands," SMART president director Daud Dharsono told reporters.

He said the partnership with The Forest Trust "aims to ensure that the group has a no deforestation footprint".

Scientists believe the destruction of carbon-storing forests is a lead cause of climate change.

Indonesia is the third biggest emitter of the greenhouse gases blamed for global warming, thanks mainly to deforestation across islands such as Sumatra and Borneo, where illegal logging is rife.

Major palm oil buyers including Nestle and Unilever cancelled contracts with SMART in response to a Greenpeace campaign last year highlighting the company's allegedly unsustainable clearing of forests.

TFT executive director Scott Poynton said better management of the palm oil industry was crucial for the environment. Indonesia is the world's biggest palm oil producer.

"Without better stewardship, the phenomenal growth of the palm oil industry could spell disaster for local communities, biodiversity and climate change as palm plantations encroach further and further into forested areas," he said.

But he added: "We all know that this agreement counts for nothing if it?s not now implemented".

"We have worked with other companies to clean up their supply chains successfully, and it is our intention to do so again," he said.

Greenpeace Indonesia forest campaigner Bustar Maitar said the group's campaign against GAR would be put on hold to give it a chance to prove that Wednesday's announcement was more than greenwashing.

"On paper, these commitments are really a major step forwards and if GAR implements these changes, it will save large areas of forests," he told AFP.

"But we will watch closely to make sure this happens."

Palm oil deal aims to save forests and carbon
Richard Black BBC News 9 Feb 11;

A major palm oil producer is joining forces with environmental campaigners in a bid to ramp up forest protection.

The giant Indonesian company Golden Agri-Resources (GAR) has agreed to work within new standards aimed at saving forests that store a lot of carbon.

International environment group The Forest Trust (TFT) is partnering the company and will monitor compliance.

The palm oil industry has regularly been accused of destroying old-growth forest as demand rockets.

The new deal expands on existing standards agreed under the Roundtable on Sustainable Palm Oil (RSPO), an international alliance of producers, processors, retailers and environment groups.

Already, RSPO rules forbid clearing old-growth forest or land with high conservation value, and developers are also supposed to obtain informed consent from local people before initiating new plantations.

Under the new deal, GAR will go further, vowing not to plant on peat, and not to clear forest where significant carbon is locked up in trees.

This should mean that large tracts of forest that have been partially logged will now be off-limits to the company.

Initially, the figure of 35 tonnes of carbon stored per hectare will be used as a ceiling; but that could change as research progresses.

"We're not trying to undermine the RSPO - we're saying 'this is something you guys need to look at and maybe move towards,'" said Scott Poynton, TFT's executive director.

"Everyone's talking about taking the lead, but no-one's doing it - this is an example of taking the lead," he told BBC News from Indonesia.
Reputational hit

GAR is the world's second-largest producer of palm oil, a product mainly used in food, fuels and cosmetics.

Like other companies in the field, it has been heavily criticised by environmental groups - a state of affairs that it wants to change.

"As a leading player in the palm oil industry, we are committed to playing our role in conserving Indonesia's forests," said Franky Wijaya, GAR's chairman and CEO.

"Our partnership with TFT allows us to grow palm oil in ways that conserve forests and that also respond to Indonesia's development needs; creating much needed employment while building shareholder value."

Earlier in the year, TFT finalised a deal with Swiss-based food giant Nestle designed to "ensure that its palm oil procurement had no deforestation footprint".

This led to discussions with suppliers such as GAR - and the conclusion that in order to preserve their markets, growers would have to purify their operations.

Greenpeace, which has taken the lead on the issue among international NGOs, sees the deal as a potential step forwards.

"This is really throwing a gauntlet down to the rest of the palm oil sector, and to other players," said campaigner Phil Aikman.

"It's setting a threshold for carbon, and that's pretty good - it'll protect a lot of orangutan habitat and other important areas that have been threatened by palm oil plantations.

"It challenges the rest of the sector to increase its productivity rather than target new areas over and over again, and that's been the main issue."

With RSPO, another issue has been compliance, with a number of companies accused of failing to live up to their promises.

But TFT says it will be working closely with GAR to make sure pledges are delivered.