Response Statement to the Status Report by Rainforest Action Network ( RAN ) titled Conflict Palm Oil in Practice

Transcription

1 13 January 2016 Statement to the Status Report by Rainforest Action Network ( RAN ) titled Conflict Palm Oil in Practice Kuala Lumpur Kepong Berhad ( KLK ) is responding to RAN s status report with regards to Conflict Palm Oil in Practice. In our view, the matters raised are repeated allegations and rehashing of old issues. With due respect to RAN, we would like to once again make our position very clear on the issues raised. Issue 1: KLK, via its subsidiary Equatorial Palm Oil ( EPO ), fails to respect Liberian communities right to say No to palm oil expansion on their customary lands The KLK Group reiterates its commitment that unless it gets the community s consent through the Free, Prior and Informed Consent ( FPIC ) process, it will not start any development in the area. Since KLK s presence in Liberia as the majority shareholder of EPO and a joint venture partner, it has thus far been involved in replanting and rehabilitation activities on its concession areas of 6,500 ha within our total concession areas. Our total concession area in Palm Bay is approximately 13,000 ha and we have taken a careful approach for our new planting plans to ensure compliance with our sustainability commitments. EPO has since 2013 been actively engaging with Sustainable Development Institute ( SDI ), the Liberian NGO to mutually work towards achieving amicable solutions which is contrary to RAN s claim. We categorically deny that EPO was unwilling to respect the rights of the community to say No to oil palm development. The NGOs have all this time created an impression that the Jogbahn clan is against EPO s development plan. In reality, the portrayal of the Jogbahn clan as being united against EPO is a misrepresentation. EPO s Palm Bay estate at Grand Bassa County covers many villages that are populated by the Jogbahn clan and a majority of them are in favour of EPO s planned expansion. In its Sustainability Report which was issued in November 2015, EPO had explicitly reiterated its position, as follows:- It must be made clear, however, in this report and elsewhere, that where communities decide that they do not want oil palm development, EPO will not develop its estates near those communities, leaving buffer zones in areas agreed amicably with those communities... The EPO Sustainability Report clearly outlined its commitment to the Roundtable on Sustainable Palm Oil ( RSPO ), plans to make certified sustainable palm oil the basis of stable, long term economic development in Liberia, how it had responded to the outbreak of Ebola, involvement with the High Carbon Stock ( HCS ) study and its commitment towards continuous engagement with communities. The full EPO Sustainability Report is available at: 1

2 During the on-going discussions with SDI, EPO welcomed the participatory mapping effort to be undertaken and also suggested that for the purpose of transparency, the Land Commission of the Grand Bassa County be included as a stakeholder to avoid future disputes. This was further reiterated in its letter to SDI dated 29 September 2015 (appended as Attachment I for reference). While EPO had been informed of the intention of the participatory mapping, we wish to set the record straight. EPO was not provided any further details or information or official invitation for the actual participatory mapping exercise by SDI. The company was indirectly made aware that the participatory mapping exercise had taken place after it was highlighted by the consenting communities who raised a grievance to SDI. The consenting communities felt that they should be included as a stakeholder in this mapping exercise undertaken by SDI. Acting in good faith again, EPO met with the complainants and SDI on 3 November 2015 to seek clarification on the grievances raised. During this meeting, EPO even suggested the need to involve all stakeholders for the exercise in question but it was turned down. EPO would like to re-emphasise that it has been and will continue to be committed to resolve the situation amicably. To pave the way forward, EPO is already in discussion to conduct the participatory mapping involving all stakeholders. Issue 2: No way forward for KLK in Collingwood Bay (in Papua New Guinea) without deforestation and violation of the rights of the communities KLK has, through public releases, meetings and teleconferences with the top officials of RAN, made clear the situation on the ground and reiterated our stand on the matter in PNG. They were: (i) KLK will seek the prior consent of the communities who will be affected before committing to any new oil palm development. KLK will respect their decision and will exclude those which are non-consenting; (ii) KLK will undertake the high conservation value ( HCV ) and HCS studies before any development; and (iii) KLK holds lease over State Land (i.e. Portion 5 and not community land). Currently there are no operations or development thereon. We will not commence any development on this land without the consent of the people of Portion 113C of Collingwood Bay. Collingwood Bay is a huge area where KLK had engaged with the communities in the Maisin (Portion 113C) and Wanigela (Portion 143C) areas. RAN had given the wrong impression that communities in both areas do not want development when in actual fact; the communities in the Wanigela area have given their consent to the proposed sustainable oil palm development by KLK through their FPIC process. RAN appears to have disregarded the FPIC rights of the communities in Wanigela to determine what they want. Even if one party does not want oil palm development, they should not infringe on the rights of other consenting communities in Collingwood Bay from having oil palm development. Additionally, there appears to be a contradiction in the claim made by RAN and its working partner in Papua New Guinea i.e. OCEAN, that the communities in the Maisin area are against the oil palm development. The Maisin clan leaders (of Portion 113C) have written to the RSPO and made a media release to indicate their support to the proposed development by KLK. An excerpt of their letter is as below. Excerpt of letter to RSPO from Gilbert Joke, representing Clan Leaders of Portion 113C, Collingwood Bay dated 20 December 2013 (as presented to RAN by KLK on 8 April 2014)..We have been deprived of development and our people are suffering. Only through this development, our people can look forward for better future. We all the landowners from Portion 113, Sinapa, Airara, Marua, Konyasi and Sinipara have given full support and consent for this development. We have no other means except to highlight to you because we came to know that they are using you to block KLK from developing our areas. The people from developed countries will be living like us if no development has taken place in their country. How long do they want us to live in poverty? No proper education for our children, poor health facilities which also out of our reach, no employment and missing other opportunities. 2

3 KLK remains committed to transparency and supports the right of landowners and the local community to self-determination. KLK has not and will not interfere in any of the proceedings of the communities and landowners who are working towards obtaining their Customary Land Titles through their respective Incorporated Land Groups ( ILG ). Upon completion of this process, it will be up to these landowners to determine for themselves whether they wish to invite KLK or any other organisations to develop oil palm plantations or other crops on their land, through the FPIC process. We trust this is the better solution and we will respect the views of all the communities who wish to say No to oil palm development. RAN and its working partners are welcome to independently affirm the decision made by the communities during the FPIC process. If invited, KLK will have to assess the economic viability of developing any new area after taking into consideration its sustainability commitments. Machineries in Collingwood Bay It is true that KLK still has some machineries stored on a State leased land in Collingwood Bay. These were brought in since 2013 as part of KLK s initial plan for development. However, since the nullification of the SABLs, these assets have been left untouched. KLK s stand on these machineries is as follows:- If all the affected communities in Portions 113C and 143C (in Maisin and Wanigela areas) are united in rejecting sustainable oil palm development in Collingwood Bay, KLK will respect their cohesive decision. KLK will make the relevant arrangements to remove the assets from Collingwood Bay within three (3) months from the formal notification date. Issue 3: Continued risks of labour rights violations in KLK s global operations KLK currently employs close to 40,000 employees worldwide and is continuously working towards improving its labour practices. Contrary to what has been claimed by RAN, KLK does not rely on contractors to do recruitment for KLK in Indonesia and directly hires workers to undertake routine works. Pursuant to the alleged case of child and illegal labour practices by a third party contractor (who forms part of its supply chain) in East Kalimantan, KLK had already taken steps to tighten the contracts of third party contractors. These would include specific clauses, such as no child labour policy, that oblige the contractors to comply with the relevant laws and regulations of the country at all times. A sample of the specific clauses is in Attachment II. A copy of KLK s Sustainability Policy is also enclosed in all agreements with third party contractors. KLK will undertake ad-hoc checks on the third party contractors as a form of audit. Our hiring practices and other measures taken to ensure that workers are not at risk of forced labour have also been discussed in length in our response to RAN dated 8 April The link to this response can be obtained at: Oil-ProductionFINAL.pdf Contrary to Sawit Watch s claim on child labour, KLK believes in nurturing and investing in the future of young children in its Indonesian operating centres. KLK provides children between the ages of two (2) to six (6) years old access to education in the estates, made possible in partnership with the Indonesian Heritage Foundation ( IHF ). The IHF s mission is to build "A Nation of Good Character" and the focus of its curriculum is to instill good character and values at a young age. There are currently 17 kindergartens (Pendidikan Anak Usia Dini - PAUD) with approximately 500 students and 30 trained teachers in our operating centres in Indonesia. We also have three (3) primary schools in our Riau operating centres housing about 900 students. 3

4 Photos of children learning at PAUDs and kindergartens, being at creches and new PAUD and school built in Indonesia Children learning in PAUDs Children learning in schools Children at creche New PAUD and school in Indonesia External Labour Audits KLK is currently undertaking an external labour audit in its operating centres in East Kalimantan as part of our continuous improvement programme. The status of the audits will be updated in our 2 nd Sustainability Policy Progress Report, target to be issued by end of January

5 Issue 4: Continued risks of deforestation in KLK s global operations As one of the signatories of the Sustainable Palm Oil Manifesto, KLK had committed to adopt the findings of the High Carbon Stock Science Study ( HCS+ ) and had publicly announced on 19 September 2014 that it would not develop any potential high carbon stock areas while the HCS+ was underway. During the interim, KLK had committed to use the High Carbon Stock Approach ( HCSA ) to identify potential HCS areas. The HCS+ was launched on 11 December 2015 and is a rigorous independent scientific study by fifty scientists. HCS+ proposes a new development model that minimises deforestation through equitable, transparent, conflict-free and carbon neutral oil palm development. It looks to the possibility of delivering balanced oil palm development by: (i) Ensuring carbon neutral land conversion and contributes to protecting essential noncarbon forest values; (ii) Better protects human rights and improves welfare to address social economic issues in elevating poverty; (iii) Is economically viable and acceptable to key stakeholders including governments, local communities and companies undertaking new developments. It is debatable whether one methodology (HCS+ or HCSA) can claim to be superior to the other. Both methodologies in fact complement each other and they are undergoing field trials by the major industry players. Simultaneously, the possibility of converging them is currently also being examined. KLK has committed to conduct field trials using the HCS+ methodology in its operations in Liberia, and will continue to engage with the Liberian government to ensure compliance with regulations and support for its nation-building aspirations. This will complement the existing assessment exercise based on the HCSA undertaken in Phase 1 New Planting area of Palm Bay. Further information on the HCS+ can be viewed at Conclusion KLK has a long and rich history since its inception more than 100 years ago and has a strong reputation for prudence. The journey of self-improvement is a continuous one which KLK is committed to. There would be instances where KLK would be faced with challenges which cannot be resolved overnight. But we believe that it is important to work in partnership with our stakeholders, including RAN, to resolve any outstanding issues so that we can achieve the common objective of ensuring that KLK s business is conducted in a sustainable manner. KLK is open and welcomes constructive comments which will be given due consideration when making a decision. *******************END********************* For further information, please contact: Lim Poh Poh Assistant General Manager Investor Relations & Corporate Communications Kuala Lumpur Kepong Berhad Tel : pp.lim@klk.com.my 5

6 ATTACHMENT I 6

7 ATTACHMENT II Sample of Agreements with Third Party Contractors with Specific Clauses Regarding No Child Labour and Compliance with Labour Regulations (Relating to the Contractors Workers) No child labour Wages paid to be in accordance to the regulations of the country. Contractors are required to comply with all laws and regulations of the country 7