Golden Agri says halts palm oil buys from haze-implicated supplier

MICHAEL TAYLOR Reuters 23 Sep 15;

Golden Agri-Resources (GAR), the world's second-largest listed palm planter by acreage, has stopped buying from a supplier sanctioned this week for allegedly causing forest fires in Indonesia, it said in a statement on Wednesday.

The Indonesian government has launched investigations of more than 200 companies as it scrambles to control fires on Sumatra and Kalimantan islands by the end of November, amid complaints from Singapore and Malaysia about smoke from the fires or the so-called "haze".

The haze has blanketed parts of Southeast Asia in recent weeks, pushing pollution levels to unhealthy levels in Singapore, Malaysia and northern Indonesia.

Earlier this week, Indonesia ordered four companies to suspend operations, including unlisted palm company PT Langgam Inti Hibrindo (LIH). LIH is owned by small, Jakarta-listed PT Provident Agro, which did not respond to requests for comment on Wednesday.

"Due to recent developments we have currently halted purchases from PT Langgam Inti Hibrindo, pending further clarification from them regarding the status of their operating licence," Singapore-listed GAR said in a statement emailed to Reuters.

Provident Agro told Reuters on Tuesday that LIH had not received notice of its operational license being suspended or revoked.

An Indonesian Palm Oil Association official said on Wednesday the industry group was discussing whether to expel LIH from its membership rolls.

Indonesia has been trying for at least two decades to end the seasonal fires caused by slash-and-burn clearances on the islands of Sumatra and Kalimantan, where large areas of forest concessions are held by pulp and paper and palm oil companies.

GAR is monitoring known hotspots against third-party suppliers' locations, the statement said, and will work with suppliers in high-risk areas to help them in fire management, prevention and suppression.

Indonesia's current focus is on companies involved in starting fires but sanctions against buyers implicated are also a possibility, Eka Widodo Soegiri, spokesman at the Indonesian environment and forestry ministry told Reuters.

Any punishment for companies based overseas would be dealt with by the foreign ministry through government to government talks, Soegiri said.

President Joko Widodo is due to visit hotspots and haze areas in both Sumatra and Kalimantan this week.

Widodo has ordered thousands of security personnel backed by helicopters to help fight the fires, and has threatened to revoke land permits from any companies found responsible.

GAR is the parent of Indonesian palm company PT Sinar Mas Agro Resources and Technology, the target of an anti-deforestation campaign by Greenpeace in 2009-2010 that led to a boycott of its palm products by leading buyers.

GAR produced 2.95 million tonnes of palm oil in 2014 from plantations mostly in Sumatra and Kalimantan. (Additional reporting by Bernadette Christina and Kanupriya Kapoor; Reporting by Michael Taylor; Editing by Tom Hogue)

Indonesia corporates to take action against suppliers responsible for fires
The Indonesian Palm Oil Producers Association says it will expel members found to be responsible for causing forest fires.
Saifulbahri Ismail Channel NewsAsia 22 Sep 15;

JAKARTA: Corporations with land concessions in Indonesia are taking strong action against suppliers found to be responsible for causing forest fires.

The Indonesian Palm Oil Producers Association, or GAPKI, says it will expel members, while at least one pulp and paper company says it will terminate its business relationship with errant suppliers.

Speaking at a forum in Jakarta on Wednesday (Sep 23), the corporations insisted they practise a zero-burning policy internally, and with their external stakeholders.

The Environment and Forestry Ministry has taken four corporations to task for illegal land clearing, which has set forests ablaze and generated dense haze over the region.

Three of them - palm oil plantation companies - have had their operations suspended, while the fourth, a wood pulp company, has had its business license revoked. One of the companies is also facing sanctions from GAPKI.

One of the world’s biggest pulp and paper companies, Asia Pacific Resources International Holdings - better known as APRIL - says so far it has no links with any of the corporations being investigated.

It says it welcomes authorities to investigate if they find something wrong, and will cooperate as well as abide with all procedures.

“We apply the no-burning policy strictly to us internally, and to our supply partners as well, so if they are found burning their fires, we will take necessary actions, and ask them to fix that, or to terminate the business relationship with us,” said APRIL managing director Tony Wenas.

“In the past the investigations have not found nothing yet, so if they are found guilty of course we will take necessary actions.”

Indonesia says it will share with Singapore the names of companies suspected of causing the forest fires which have led to a deterioration of air quality in the city state.

Environment and Forestry Minister Siti Nurbaya Bakar told her counterpart last week the names will be shared once the information has been verified. However, Singapore has yet to receive the names from Indonesia.

Environmental activists present at the forum questioned Indonesia’s reluctance to share companies' names, believing that the prosecution process will be quicker once information is shared.

“It's necessary for Indonesia to be more transparent with the companies that are responsible for the fires, because it will help them to prosecute in their own regulations,” said Greenpeace forest campaigner Anisa Rahmawati.

“In Singapore for example, if the company has a shareholder, or at least listed in Singapore, they can also prosecute. There are many angles that we can use to make them don't really do that anymore.”

But, one observer, claiming that the names of companies are already known, said Singapore should be more proactive.

“The list is already there, the 286 of the companies are indicated. Singapore needs to be proactive, not to be waiting, waiting,” said Professor Henry Purnomo, a scientist at the Centre for International Forestry Research. “Singapore is a more developed country than Indonesia with more clear rules. Please, don't wait for Indonesia, just do it.”

Singapore passed a cross-border air pollution law last year, which allows its courts to prosecute those responsible for starting the fires, if those fires result in unhealthy levels of haze in the Republic.

But inadequate information on land ownership in Indonesia, and insufficient enforcement where the fires are, make it difficult to bring the law to bear on errant companies.

- CNA/ec