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The Chain: 3M makes sustainability commitment, pressure mounts on APRIL

March 17, 2015

3M makes sustainability commitment, pressure mounts on APRIL

Manufacturing giant and “Post-it note” maker 3M (MMM:US) recently announced an updated Pulp and Paper Sourcing Policy. Under its new policy, 3M will require its suppliers to provide data on the source of their products to ensure that all paper products are harvested without destroying forests or peatlands, and protects the rights of local communities. The company also announced that it will become a member of The Forest Trust to help implement the policy on the ground. Notably, 3M’s updated policy means that the company will no longer endorse the Sustainable Forest Initiative (SFI) label, a certification system that has received heavy criticism from forest advocates.

3M’s move is also putting further pressure on the Singapore-based pulp and paper giant APRIL, and its parent group Royal Golden Eagle, over ongoing allegations of deforestation in Indonesia. As discussed in our last update, Santander Bank recently decided to end its financing of APRIL in response to evidence of deforestation. In addition, ABN AMRO recently issued a statement on its commitment to forest protection, and has reportedly conveyed to APRIL that it will not provide further financing until these issues are addressed.

Palm oil firms threaten Peruvian Amazon

Recent reports have shown that four proposed palm oil plantations in Peru are poised to clear approximately 23,000 hectares of primary forest in the country’s northern Amazon region. All four plantation companies are reportedly connected to Palmas del Espino, the leading palm oil company in Peru. While palm oil development is not as widespread in Peru as it has been in neighboring countries like Colombia and Ecuador, studies have shown that almost three-quarters of new plantations from 2000-2010 came at the expense of forests in Peru’s Amazon. Previous reports have shown that the parent group of Palmas del Espino, the Romero Group, has been responsible for clearing thousands of hectares in the Amazon for palm oil.

Sime Darby acquires New Britain Palm Oil

A merger long in the works was completed earlier this month when Malaysia’s Sime Darby (SIME:MK), the world’s largest palm oil planter by land size, purchased New Britain Palm Oil for $1.74 billion. The acquisition of NBPO’s 135,000 hectares increases Sime Darby’s global land bank to nearly one million hectares, and significantly increases the company’s holdings in Papua New Guinea. The move is seen, in part, as an effort to increase Sime Darby’s share of the sustainable palm oil market. NBPO is considered one of the most sustainable palm oil companies in the industry, while Sime Darby has been criticized for leading recent efforts to undermine standards for protection of High Carbon Stock forests.

Musim Mas and Genting Plantations partner on refinery

Indonesian palm oil giant Musim Mas has reportedly entered into an agreement with Malaysia’s Genting Plantations Bhd (GENP:MK) to build a $82.17 million palm oil refinery in Sabah. The refinery, which is expected to be complete in late 2016, is said to have an annual processing capacity of 600,000 metric tonnes. Genting Plantations has a landbank of approximately 180,000 hectares in Indonesia and 66,000 hectares in Malaysia. Genting has been recently connected to deforestation, putting it out of compliance with major buyers committed to zero-deforestation such as Wilmar.

Haze related to deforestation kills 110,000 in Southeast Asia

A new report from the Union of Concerned Scientists shows the enormous public health and economic impacts of the haze caused by fires used to clear forests and peatlands for agriculture in Southeast Asia. Recent data shows that at least 20% of this burning can be traced to palm oil plantations. Each year around 110,000 deaths associated with haze exposure in Southeast Asia can be attributed to the fires. The impacts to the region’s economy are also severe: increased health care costs, loss of tourism, transportation delays and accidents, school and business closings, and other issues are shown to cost billions of dollars every year.

Bloomberg BusinessWeek: The Story Behind Wilmar’s Transformation

Reporter Yuriy Humber digs into the fascinating inside story of how Wilmar International CEO Kuok Khoon Hong became a leading driver of the palm oil industry’s move towards forest and human rights protection.

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