Progress Report to RSPO CP Complaint on PT KPC + 17 PTs June 2016
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1 Progress Report to RSPO CP Complaint on PT KPC + 17 PTs June 2016
2 Contents 1. Summary of key events (March June 2016) 2. Status of GAR follow-up on CP decisions 3. Summary status of agreed action plan 4. Related company initiatives 5. Observations 6. Next Steps slide 2
3 1. Summary of Key Events (March June 2016) slide 3
4 1. Summary of key events (Mar 2016 Jun 2016) Date Event Details Status 8 Apr 2016 FPP meeting with Ekologika Review of work done by Ekologika in PT KPC and PIP for improved HCV management and monitoring protocols GAR understands that FPP is satisfied with the quality of work and progress, particularly the management and monitoring protocol of HCV4-6 8 Apr 2016 FPP meeting with GAR on review of ToR for remediation process for 17 PTs after KPC FPP proposed changes. These have been incorporated into the revised ToR Remediation being implemented according to ToR. FPP and relevant stakeholders will be updated every 6 months Apr - May 2016 Apr 2016 Key community consultations and meetings on land tenure and remediation in KPC Participatory mapping exercise for 6 PTs completed PT KPC CEO meeting with Bupati of Kapuas Hulu in April TP3K met with the community on 13 May Land tenure/hgu issue was clarified and understood by the community. Plasma allocation and legal status is outstanding. No further actions on HGU issue. Community understands the land tenure/hgu and has accepted that the government will decide on the status of the land after 35 years, with its inputs Consultations to continue on community remediation package Completed maps shared with FPP Work in progress for other PTs in progress, 4 more to be completed by end-2016 Apr 2016 FPP and GAR agree on terms of reference and choice of legal firm for legality review Contract to Hanafiah Ponggawa proposed by RSPO Contract between RSPO and GAR for GAR to pay for legal review proposed by RSPO Legal review started on Jun 2, in progress slide 4
5 1. Summary of key events (Mar 2016 Jun 2016) Date Event Details Status 28 May 2016 FPP forwards letter to GAR cc RSPO on water pollution and HCV issues reported by community member May/June 2016 HCV conservation and monitoring workshops with communities facilitated by Ekologika 22 June 2016 Meeting between GAR and FPP Info mainly based on letter from Pak Hari Sudirman to Lingkar Borneo Alleges water pollution in Kapuas Hulu Dissatisfaction with proposed MoU Workshops conducted with communities in PT PIP and PT KPC 6 villages signed MOU, 4 in discussions, 4 rejected. The four villages which rejected are outside the cadastral GAR provided update on progress of action plans and related matters FPP provided feedback on the same GAR launched investigation immediately upon receipt of and letter Found community leaders have not seen the letter, questionable that Pak Hari is representative Explained the seasonal changes of water quality and KPC operations not significant contributor as assessed in the past by TFT. GAR already agreed to increase water sampling and make results public Further meeting with community planned in June 14 to discuss HCV issues GAR responded to FPP cc RSPO on 31 May and further to RSPO on 2 June. Discussions ongoing with 4 villages FPP to verify with communities acceptance of HGU status in KPC FPP believes that releasing inti land to resolve Plasma issue is still possible. GAR is exploring other more workable options FPP and GAR to refine the Practical Guidelines for FPIC Next update in Sep 2016, possible meeting in July in Singapore to discuss specific issues slide 5
6 2. Status of GAR follow-up on CP decisions slide 6
7 2. Status of GAR follow-up on CP decisions RSPO CP Final Decision dated 6 May 2015 GAR follow-up status Update Status Progress Track 1. On FPIC: GAR must take remedial actions to correct shortcomings in its land acquisition process with the affected communities. Replied on 29 May Agreed with FPP on action plan for remediation. Key challenge is to communicate to the community on relevant regulations. TP3K socialize the status of the lanfd after the expiry of HGU to the community on 13 May 2016 (Desa Mantan and Nanga Suhaid). HGU issue was clarified and the community had accepted, in writing, that it accepts that the status of the land will be decided by the government after one cycle (Note: TP3K explained clearly that HGU valid for one cycle and 35 years is the maximum term for plantation, but could be shorter depending of the productivity of the crop). No further action from GAR on HGU issue but FPP will be verifying status with community. Update Ongoing (GAR believes HGU issue closed for KPC, next step is to agree on remediation package. For other PTs, this will be addressed per remediation TORs, see Section 3) 2. On legal permits and licences: GAR must demonstrate that it possesses the legal documents as required under Indonesian law for land development in the 18 PTs. Replied and submitted supporting documents on 29 May On RSPO further decision to engage lawyer to do a legal review of permits and licences, ToR agreed between FPP, GAR and RSPO and HPRP appointed by RSPO, to be funded by GAR. Update Ongoing (Legal review started on Jun 2) 3. On exceeding maximum land holdings: To be pursued by the Ministry of Agriculture No action by GAR, to be pursued by RSPO Historical NA 4. On HCV assessments: HCV assessments done by 18 PTs to be subject to peer review. Replied and submitted documents on 29 May 2015 that the original HCV assessments for 18 PTs have been peer-reviewed. As additional measure, Ekologika is engaged to improve the protocol for HCV management and monitoring. FPP met with Ekologika on 8 Apr 2016 to review the work done. GAR understands that FPP is satisfied with the quality of work and progress, particularly the management and monitoring protocol of HCV4-6. MoUs for HCV conservation and monitoring signed with 6 communities, discussions ongoing with 4. Ongoing slide 7
8 2. Status of GAR follow-up on CP decisions RSPO CP Final Decision dated 6 May 2015 GAR follow-up status Update Status Progress Track 5. On plasma: GAR to honour commitment to allocate 20% of land to smallholders. Submitted details to RSPO on 29 May 2015 that plasma constituted 21.3% of planted area. However, GAR recognises that communities calculated 20% allocation based on total area discussed prior to allocation for HCS and other commitments. NPP submission and public posting for plasma development in PT PIP was completed on 6 February GAR continues to engage communities for mutually agreeable resolution. Further details in Section 3 below. Update Ongoing 6. On NPP: GAR to declare all land planted with NPP. To clarify on late submission for the 18 PT s. Submitted details to RSPO on 29 May Excerpts from notes of 14 Sep 2015 meeting for recap: RK recap the chronology of GAR NPP posting on 7 Mar 2014 and from the last notes of meeting on 24 Jul 2015, where the RSPO Secretariat acknowledged the agreed proposed approach by GAR in Mar 2012 requesting RSPO not to publish GAR s NPP based on the reasons raised (public listed selective disclosure etc). Darrel Webber will explain to FPP on this agreed RSPO action and will also present to the CP to decide on RSPO action. Historical Completed Action: 1. RSPO will clarify with FPP on the delays in these posting of NPP notifications. 2. RSPO to address on GAR NPP posting with CP and FPP as per notes of meeting on 24 July slide 8
9 2. Status of GAR follow-up on CP decisions RSPO CP Final Decision dated 6 May 2015 GAR follow-up status Update Status Progress Track 7. On new land development: GAR to stop acquiring or developing new land until complaint dealt with. Submitted declaration to RSPO on 18 Dec 2014, repeated in letter of 29 May GAR confirms that it is still suspending acquiring or developing new land in the relevant PT s. Historical Ongoing 8. GAR / PT KPC to i. Confirm all development halted until complaint resolved ii. Furnish a detailed reply to the allegations Letter from GAR to RSPO dated 25 Mar 2015 confirmed all development in PT KPC halted and furnished reply to allegations. Further clarified in letter dated 29 May Historical Completed slide 9
10 3. Summary status of agreed action plan slide 10
11 3. Summary status of agreed action plan Action Plan Item 1. Completion of Participatory Mapping (PM) in 18 PTs. GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Completion of 7 PTs PM. Completion of Roll out plan for all companies. Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Agreed Status Update 6 PTs completed. Maps shared with FPP on 4 th week of April. Remaining PTs in progress: 4 planned to be completed by end Progress Track Ongoing 2. FPIC guideline (including Land Tenure Study guideline) implementation. Completion of guideline endorsed by relevant stakeholders (e.g. TFT, FPP). Completion of Training and socialization of the guideline. Agreed FPIC SOP was reviewed by FPP and its comments were incorporated resulting in the Enhanced FPIC SOP. The SOP is currently being refined further based on the revised RSPO guideline published in Feb A Land Tenure Guide was also developed. GAR will apply the guide, when there is an overlapping land claim between communal land and cadastral boundaries. For example, GAR referenced the guide to resolve the Kenabak Hulu land claim. Ongoing slide 11
12 3. Summary status of agreed action plan Action Plan Item GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Status Update Progress Track 3. Land Remediation in KPC (FPIC Consultation) Conduct FPIC consultation in all relevant villages. Implementation of FPIC consultation. Detail roll out plan in relevant villages in KPC shared with FPP. Agreed 1. Per TFT update of 8 Apr: The CEO of KPC had a meeting with the head (bupati) of Kapuas Hulu on April. 2. TP3K socialized the status of the land after the expiry of HGU to the community on 13 May 2016 (Desa Mantan and Nanga Suhaid). HGU issue was clarified and the community now understands and accepts that the status of the land will be decided by the government after one cycle (Note: TP3K explained clearly that HGU valid for one cycle and 35 years is the maximum term for plantation, but could be shorter depending of the productivity of the crop). FPP will verify with community that it accepts this. 3. Issue of PLASMA area allocation: GAR has identified some areas and exploring acquiring additional land for PLASMA. Ongoing slide 12
13 3. Summary status of agreed action plan Action Plan Item GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Status Update Progress Track 3. Land Remediation in KPC (FPIC Consultation) Conduct FPIC consultation in all relevant villages. Implementation of FPIC consultation. Detail roll out plan in relevant villages in KPC shared with FPP. Agreed 4. GAR has studied the new option of Hak Komunal as proposed by FPP based on the new Ministerial level regulation (Permen Agraria 9/2015). The initial findings confirm that this option has not yet been applied in Indonesia in a similar context. The regulation is still lacking in implementation detail/ supporting law as well as clarity in terms of the relationship with existing Indonesian plantation law. There would also be impact on the financial agreement already in place for both inti and plasma as that financial agreement is tied with the HGU/SHM conditions. GAR conclusion is that this option is not feasible for KPC but is open to explore in other new developments. Ongoing slide 13
14 3. Summary status of agreed action plan Action Plan Item GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Status Update Progress Track 4. Enhancement of HCV assessment Sharing of draft enhancement protocol (assist by Ekologika). Sharing of roll out schedule of the protocol. Incorporating the enhanced protocol in any submitted NPP. Agreed FPP met with Ekologika to review the management and monitoring protocol on 8 Apr GAR understands that FPP is satisfied with the quality of work and progress. Workshops conducted with communities: 1. PT PIP: All communities signed MOU for conservation and monitoring. 2. PT KPC: 2 communities signed, 4 communities in discussion. 4 communities reject MOU, but these are outside the cadastral. Ongoing slide 14
15 3. Summary status of agreed action plan Action Plan Item 5. Fulfilment of smallholding commitment. GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Conduct Plasma consultation (community engagement) to discuss the issue with communities transparently. Implementation the agreed resolution resulting from the discussion. Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Agreed Status Update From a regulatory standpoint, for the 18 PTs: PTs are obligated to pursue the 20% plasma threshold (Min. of Agri No.26/2007) a. 7 PTs have fulfilled plasma threshold, b. 3 PTs are in fulfilment progress including PT. PIP whose NPP was approved in Feb 2016, c. 2 PTs are in the process of obtaining land and permit, d. 3 PTs are pending government decision to pursue the plasma threshold Progress Track Ongoing 2. 3 PTs are not obligated to meet the 20% plasma threshold (given their IUP permits were issued before 2007), yet pending government decision they will continue to develop plasma for community. 3. All PTs where government decision is pending (1d and 2) are subject to regulations (PP104/2013 and PP60/2012), which resolve a spatial planning dispute between the Ministry of Forestry and the Central Kalimantan provincial government. GAR have submitted pleas for clarification under each PT, but until governmental technical teams finish land analysis and dispute is settled, GARs ability to develop plasma is restricted. (Continued next page) slide 15
16 3. Summary status of agreed action plan Action Plan Item 5. Fulfilment of smallholding commitment (continued) GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Conduct Plasma consultation (community engagement) to discuss the issue with communities transparently. Implementation the agreed resolution resulting from the discussion. Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Agreed Status Update From the social point of view, GAR is reviewing documentation to determine, whether local communities and individual PTs have made plasma agreements above and beyond the regulatory threshold. Such is the case in PT KPC, where the community understanding is that management agreed to 20% plasma development on the total compensated (rather than planted) area. Progress Track Ongoing. PT. KPC: 1. GAR explored the possibility of implementing FPP s recommendation regarding release of inti area into plasma. The conclusion is that existing financial arrangements including bank loans for both inti and plasma and also permits with MoA and Kabupaten makes it virtually impossible to change. 2. GAR continues to seek other options with the communities including purchase of available land to be assigned to plasma. 3. GAR continues to explain to the communities that where there are shortfalls in the absolute areas to be assigned to plasma, this is mostly due to HCS & HCV. slide 16
17 3. Summary status of agreed action plan Action Plan Item 6. GAR PT s Legality and maximum landholdings GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Agreement of ToR for independent legal opinion (lead by RSPO) to assess PT legality Agreement that the RSPO address the issue of maximum landholdings Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Agreed. Status Update HPRP appointed based on terms and conditions agreed between RSPO, FPP and GAR. Legal review started on Jun 2. GAR to fund review. Progress Track Ongoing 7. Remediation of Land developed without proper consent in 17 PTs Agreement of ToR of the Remediation process with FPP Agreed (on 8 Apr 2016) TOR was discussed with FPP (Dr Marcus Colchester) on 8 Apr The proposed changes have been incorporated and remediation is being implemented according to the TOR. FPP and relevant stakeholders will be updated on progress every 6 months. Ongoing slide 17
18 3. Summary status of agreed action plan Action Plan Item GAR proposal for Lifting of RSPO Stop Work Order on 14 Sep 2015 meeting in KL. Principle agreement on 14 Sep 2015 meeting Agreed/Disagreed by FPP Status Update Progress Track 8. Others: Exclusion from KPC s HGU area of community rejected Palm Start process discussion with the community. Agreed. As reported to FPP on 2 Feb and in the Mar Progress Report, KPC excised communal areas from its cadastral map and submitted the map to the land agency, BPN. Having completed the PM and excised communal areas, such as in Kenabak Hulu, KPC is not aware of any unresolved overlapping land claim. Closed for monitoring slide 18
19 4. Related company initiatives GAR is piloting Participatory Conservation Planning, a joint company-community initiative based on FPIC principles to prevent deforestation in and around its concessions. This has started in one PT. GAR is in the process of enclaving the Lake Marsedan area, located just west of its concession, effectively returning nearby land to the community, after authorities declared the lake a protected area. On 10 March 2016 GAR submitted the revised cadastral map to the Ministry of Agrarian and Spatial Planning. slide 19
20 5. Observations GAR is determined to resolve issues related to the complaint and has committed significant resources and senior management attention towards this. Progress has been made and it is in the interest of both communities and GAR to move as quickly as possible, but it is acknowledged that this process cannot be rushed mainly because of the complexity of the issues and the many stakeholders involved, including government. GAR believes that its experience is not unique. It is likely to be common in the industry particularly in Indonesia and requires a multi-stakeholder effort to resolve sustainably. In this context, GAR has proposed that RSPO lead an initiative for a more consistent approach to manage legacy FPIC issues. Several major growers, buyers and FPP have supported this in principle. GAR notes that RSPO has agreed to launch this project. While GAR executes on the agreed plan of actions to resolve the complaint, it believes that suspending development in 18 PTs in what is likely to be a long-drawn process is overly onerous. It proposes that it should be allowed to resume normal operations in the PTs named in the complaint, subject to acceptance of the conditions of remediation and a monitoring process and full compliance of prevailing RSPO P s and C s and Indonesian law. slide 20
21 6. Key next steps Implementation of remediation TORs for remaining 17 PTs Continue with remaining agreed actions in KPC Work on the revised Practical Guidelines for FPIC Fulfilment with FPP inputs Regular progress update and discussion sessions with FPP slide 21
22 Thank you
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