Palm Oil Monitor Weekly Update – 25th March 2020

FPP’s Suspicious Attack against Golden Agri-Resources

The Forest People’s Program (FPP) has launched a complaint against Golden Agri Resources (GAR) via the RSPO. The complaints within the brief filed to the RSPO’s complain system allege deforestation and bribery; the publicly available file doesn’t contain significant amounts of details. The complainants “used public records and satellite imagery to examine deforestation on Golden Agri plantations and encroachment on protected areas.” In our view, the accusations are nothing out of the ordinary against palm oil majors, and RSPO has historically been a good forum to investigate these concerns.

However, the more curious aspect of the complaint is that FPP has filed it in conjunction with a little-known outfit called Elk Hills Research. The complaint states that the research is “investor funded”.

Why is this curious? The Elk Hills research has been filed by Brennan Bilberry, who is a close associate of Jim Messina, Barrack Obama’s former campaign manager. Messina and Bilberry’s (former) firm is a high-profile campaign and lobbying firm; it has completed work for David Cameron and numerous other politicians and corporates. Bilberry worked for the U.S. Democratic National Committee amongst other prominent U.S. Democrats. In other words, Elk Hills and Bilberry advice doesn’t come cheap. Presumably, someone is paying their expensive hourly rates.

Investors in GAR are able to engage with the company directly; the company has well established communications channels for investors and stakeholders globally. The conclusion, then, is that the ‘investor’ referred to by FPP must be an external investor.

In recent times, ‘independent research’ has become a popular move among activist investors that are seeking to short company stock prices, among other things.

This may be the case, but last week was probably the wrong week to short anything specific.

We’ll look more closely at the FPP allegations if and when they come to light, but if RSPO is being used as a tool for traders, it has a big problem on its hands. 

In the meantime, a few questions present themselves, to anyone following this issue:

  1. Who or what is Elk Hills?
  2. Why is a high-profile political consultant undertaking “investigative research” on palm oil in Indonesia?
  3. Who is paying Elk Hills for this research? Are they US-based or outside the U.S.?
  4. What are they trying to achieve?
  5. What role or involvement does Jim Messina have?
  6. Is Henry Waxman and Mighty Earth involved?
  7. Is the Norwegian Government (specifically, NORAD) funding this?
  8. More importantly, why didn’t FPP engage a well-known environmental expert, such as Chain Reaction?

Separating Fact from Fake in Land Disputes

Last week, Mongabay wrote an expose of a land dispute between a palm plantation company based in Kalimantan belonging to the BEST Group – previously a supplier to Wilmar – and a group of locals.

The dispute was as follows: In February two local men in East Kotawaringin were arrested for stealing palm fruits. A few weeks later, another man, James Watt, was arrested in relation to the incident. At the heart of the arrest is another matter, which is indirectly related to the arrests: a dispute between the plantation company and the local Penyek villagers, which has been dragging on since 2006.

Like many land disputes in Indonesia, this is a particularly complex issue. Land disputes can often take place over decades and fail to be resolved. As has been noted many times before, most of the land disputes are between different players at the local level – noted as horizontal disputes.

What is particularly alarming in this case is that there was a distinct attempt to link the land dispute to the supply chain of Wilmar and other Western companies such as Nestle and Unilever – in fact, this seems to have been the motivation for broader reporting.  

Although corrections have now been issued around this story by Mongabay, it’s still worth pointing out their misinformation and restate the facts around land disputes in Indonesia.

First, palm oil theft is not unusual. Arrests are common; in South Sumatra last week, a group of men were arrested for palm oil theft. In other words, palm oil theft should not be automatically conflated with either land disputes or human rights activism.

Second, land disputes aren’t always between corporations and communities. As one Indonesian scholar has noted, “Agrarian conflicts in this area take the form of disputes over land and land disputes, both disputes between communities and communities, communities with companies, and communities with the government.”

In a close look at all disputes in South Sumatra taking place at the border of Banyuasin Regency and Palembang City, they attributed the underlying causes of disputes as follows:

  1. There is no legal certainty on the boundary in the border areas of Banyuasin Regency and Palembang City.
  2.  Inaccurate boundaries of residents’ land with one another
  3. The conversion of land from community estates to housing is carried out by the company
  4. The private party’s takeover of the people’s land.
  5. Issuance of certificates and land use rights (HGU) on troubled land carried out by the National Land Agency (BPN).
  6. The control of the residents’ land by the company with a plasma system that is not carried out in accordance with the agreed agreement.

In other words, things are a lot more complicated than they seem. And Mongabay knows this.

Third, there’s often a push by NGOs internationally and locally to portray these disputes as a ‘corporate’ vs ‘local’ David vs Goliath battle. This is often in part due to the funding associated with different NGOs, and the need for [global news headlines]. There is a significant amount of funding that has been donated by Western aid agencies and charitable foundations towards strengthening community land rights. This is a noble pursuit; private property rights are in many ways key to furthering social and environmental outcomes. However, as has been noted before, it has been in the case of groups such as Rainforest Foundation Norway, that there has been an over-emphasis on indigenous groups, that has at times come at the expense of ignoring other groups such as smallholder farmers. And, from our personal experiences in Sumatra, indigenous groups aren’t always as honest and straightforward as they seem. Unfortunately, Western audiences are susceptible to equating ‘indigenous’ with ‘innocence’.

We personally have witnessed and documented indigenous groups fraudulently selling land to Indonesian domestic migrants; these domestic migrants have subsequently found themselves at odds with other parties through no fault of their own.

The upshot is that although foundations, NGOs and reporting groups may be seeking to assist the situation when it comes to land disputes and palm oil, it’s really not as simple as ‘palm oil is to blame’.

A curious pattern is emerging with reporting on Indonesia by Mongabay, FPP and Elk Hills. There appears to be less concern with on-the-ground plantation companies or practices, and more about seeking to cause ripples in Western markets. We’ll continue to monitor and find the factual errors and links, as necessary.

Is Deforestation Really to Blame for COVID-19?

A story published by Reuters appeared earlier this month that appeared to pin the blame for the current COVID-19 epidemic on deforestation and associated commodities.

The story led with the line: “The rapid pace of deforestation, urbanisation and road building are major factors in the spread of infectious diseases across Asia, including the coronavirus, health and environment experts said on Wednesday.”

This was extraordinary claim for Reuters to make; there’s some certainty about the origin of the novel coronavirus, but no experts appear to have pinned it on deforestation.

So where have the claims come from?

Reuters has linked the claim to comments from the United Nations Environment Programme (UNEP). UNEP issued a communication in the same week stating that there is a clear link between humans and ecosystems, and that a possible risk of ecosystem destruction is transfer of disease from animals to humans.

UNEP did not, however, place the blame on deforestation. The organization was careful not to make the link between deforestation and COVID-19; Reuters seemed to take care of that by themselves.

Although researchers and other organizations have drawn some correlations between infectious diseases and environmental degradation, causality isn’t always assured. This is particularly the case for the current coronavirus pandemic; researchers have stated that the likely source is the horseshoe bat, which is present in forested and unforested areas, as well as in urban and rural areas. It is the most common species of bat globally.

Reuters appears to be pinning COVID-19 on deforestation as a means of gaining attention. But there are worse implications: such attention-seeking is not harmless. The link will live on in NGO reports and other campaign materials going forward. And no doubt palm oil will be implicated at some point.

Reuters should be ashamed. Reporting on the coronavirus is currently, literally, a matter of life and death. It is not the time for insinuations, or pursuing pet ideologies. Facts are the only currency that should matter; anything else is thoroughly irresponsible.