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Bumitama Agri Oil Palm plantation, Indonesia


Description:

PT Ladang Sawit Mas (LSM) is an oil palm plantation company under the ownership of Bumitama Agri.

LSM was awarded its Plantation Business Permit in May 2006, before having obtained a Location Permit (in June 2006) and long before it had obtained an Environmental Permit (on 27th January 2010). Further, the total land bank specified in the Location Permit (8,300 hectares) is smaller than the land bank specified in the Plantation Business Permit (9,300 hectares).

According to LSM’s 2008 Environmental Impact Assessment (EIA) report, 8,075 hectares, or nearly the entire concession area, is covered with natural forest. The EIA failed to note the proximity of the LSM concession to the Sentap Kancang Forest Reserve and the Gunung Tarak Forest Reserve and the Gunung Palang National Park. This was a serious oversight, especially given the significant population of orangutans both within the forest reserves and in the buffer zones surrounding them, which fall within LSM’s concession area.

In May 2012 LSM commissioned subcontractors to begin clearing land within the concession area it had acquired near the Sentap Kancang and Gunung Tarak Forest Reserves and the Gunung Palang National Park in West Kalimantan.

In March 2013, International Animal Rescue and BKSDA (Agency for Natural Resources conservation) Ketapang rescued four orangutans from land clearing sites in the Ladang Sawit Mas concession. Those orangutans were translocated, after the recommendation by LSM, to an adjacent area to LSM belonging to Bumitama (GMS area).

On 8th April, International Animal Rescue (IAR) and Friends of Borneo filed a formal complaint to the Roundtable on Sustainable Palm Oil (RSPO) against PT LSM (subsidiary of Bumitama Agri Group) about the violation of RSPO principle 5 and 7.

On April 18, 2013, in response to the RSPO complaint, Bumitama stated that it would not recommence operations in LSM before High Conservation Value/Social Impact Assessment studies were completed. However, the company failed to keep its promise: satellite imagery over the period May to September 2013 shows that more than 460 hectares of land – mostly peat swamp and forest – was cleared during this period.

On September 24 2013 – five months after the initial complaint filed by International Animal Rescue – RSPO reached an agreement with the company regarding planned improvements. RSPO and Bumitama issued a common joint statement where Bumitama committed to collaborate with IAR on monitoring the existence and conditions of orangutans in the concession area and compliance with RSPO’s New Planting Procedures. But, notably, the violations cited above occurred while the stated agreement was being negotiated, and appear to have escaped the notice of the RSPO, revealing Bumitama’s utter disregard for the authority of the RSPO.

Wilmar International is an important partner of Bumitama Agri. In 2011, Wilmar bought 56.8 percent of Bumitama’s total Crude Palm Oil (CPO) and Palm Kernel Oil (PKO) production.

Wilmar officials acknowledge that the company buys palm oil from Bumitama and say they are working to eliminate deforestation and exploitation from the company’s supply chain. Wilmar’s response to the Bumitama case will be a critical test of this claim.

Basic Data

Name of conflict:Bumitama Agri Oil Palm plantation, Indonesia
Country:Indonesia
State or province:Nanga Tayap sub-district, Ketapang district in West Kalimantan
Location of conflict:West-Kalimantan
Accuracy of locationHIGH (Local level)

Source of Conflict

Type of conflict. 1st level:Biomass and Land Conflicts (Forests, Agriculture, Fisheries and Livestock Management)
Type of conflict. 2nd level:Land acquisition conflicts
Deforestation
Agro-fuels and biomass energy plants
Plantation conflicts (incl. Pulp
Specific commodities:Palm oil

Project Details and Actors

Project details

Bumitama has knowingly destroyed forest that is the home for endangered orangutans. In April 2013 Bumitama promised it would not clear land near forest reserves in West Kalimantan until studies were completed to appraise the land’s ecological importance. However, satellite imagery shows that hundreds of hectares of peatland and forests in the area were cleared between May and September 2013. So while Bumitama was negotiating with the RSPO to address the complaint, the company continued to clear land, despite its pledge to stop the cutting.

Project area:8,300
Type of populationRural
Start of the conflict:01/05/2012
Company names or state enterprises:Bumitama Agri Ltd, from Indonesia - Palm oil producer
Wilmar International from Singapore - In 2011, Wilmar bought 56.8 percent of Bumitama’s total Crude Palm Oil (CPO) and Palm Kernel Oil (PKO) production.
International and Finance InstitutionsHSBC United Kingdom (HSCB) from United Kingdom - financier (of Wilmar International)
DBS Bank Singapore from Singapore - financier
Round Table on Sustainable Palm Oil (RSPO) from Malaysia
Environmental justice organizations (and other supporters) and their websites, if available:Friends of the Earth Europe https://www.foeeurope.org/, International Animal Rescue, Friends of Borneo

Conflict & Mobilization

IntensityLATENT (no visible organising at the moment)
Reaction stageLATENT (no visible resistance)
Groups mobilizing:International ejos
conservationist groups
Forms of mobilization:Creation of alternative reports/knowledge
Objections to the EIA
Official complaint letters and petitions

Impacts

Environmental ImpactsVisible: Deforestation and loss of vegetation cover
Potential: Global warming, Biodiversity loss (wildlife, agro-diversity)
Socio-economical ImpactsPotential: Land dispossession, Violations of human rights

Outcome

Project StatusIn operation
Conflict outcome / response:Negotiated alternative solution
Development of alternatives:Friends of the Earth calls on financiers to cancel their loans, withhold other financial services, and publicly commit to a moratorium on loans and the purchasing of shares in Bumitama, or any company associated with it. Wilmar International, the largest buyer of Bumitama's palm oil and a significant shareholder, should break current contracts with the company and sell its shares.
The government of Indonesia immediately has to implement and enforce its existing moratorium on the conversion of peatlands and forests, to save the most threatened forests, peatland ecosystems, and endangered wildlife, and to take immediate steps to resolve social and land conflicts.
Governments of consumer countries including the EU, must work to reduce demand for palm oil; one particular opportunity is the EU’s unsustainable demand for palm oil biodiesel, driven by biofuel targets and subsidies, and a carbon accounting system that does not take into account displaced deforestation and land grabs. The EU must cap and then phase out land based biofuels, and implement correct carbon accounting.
Robert Hii (Friends of Borneo): "The dates when licenses were issued may sound like a violation of national laws but it is in fact how the government expects plantations to operate.
By law, once a "permission to explore" is granted in an area, the company is expected to work on it within 3 years or lose the license. This explains why most companies open up small areas just to show they are working the land even as the rest of the licenses are being processed. Hopefully the new president of Indonesia will do something to correct this backwards way of working."
Do you consider this an environmental justice success? Was environmental justice served?:Not Sure
Briefly explain:Depends on the future development of the case.

Sources & Materials

References to published books, academic articles, movies or published documentaries

Friends of the Earth Europe report
http://www.foeeurope.org/sites/default/files/press_releases/commodity_crimes_nov13.pdf

short timeline of conflict
https://www.foeeurope.org/bumitama_diary_destruction_250314

Links to general newspaper articles, blogs or other websites

Conflict palm oil case study by Rainforest Action network
http://understory.ran.org/wp-content/uploads/2013/10/Case_Study_Bumitama_SF20_Cargill.pdf

Information on financiers
http://www.banktrack.org/manage/ajax/ems_companyprofiles/createPDF/bumitama

Article by Mongabay
http://news.mongabay.com/2013/1201-bumitama-palm-oil-dparker.html

Chronology on RSPO website
http://www.rspo.org/en/status_of_complaint&cpid=31

Meta information

Last update24/07/2014