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The Chain: Indonesian parliament floats bill to restrict foreign firms

August 25, 2014

Indonesian parliament floats bill to restrict foreign firms; Jokowi on haze
The Indonesian parliament introduced a new draft bill to restrict the percentage of foreign-owned plantations to no more than 30% (down from the current 95%).

Major foreign firms operating plantations in Indonesia would be subject to this policy and given five years to comply. Backers say that by streamlining Indonesia’s laws on land use, the bill would also make it easier for the country to prosecute companies causing haze and deforestation. However, international companies like Wilmar and Cargill have been among the leaders in adopting and implementing No Deforestation policies.

Separately, Indonesian President-elect Joko Widodo gave hope to those looking for additional Indonesian government action to stem deforestation when he vowed “good, tough law enforcement” to reduce haze, and voiced support for Singapore’s haze bill, which targets companies causing deforestation.

Liberian commodity production affected by ebola outbreak
Last week, Sime Darby announced that it would slow its operations in Liberia due to the recent ebola outbreak. Sime Darby operates the largest palm oil plantation in Liberia. In the mining sector, ArcelorMittal also announced that it was slowing iron-ore operations in Liberia for similar reasons. Other palm oil groups, like Golden-Agri and Equatorial Palm Oil, have announced their operations are unaffected at this point.

Financially troubled Bumi Resources faces pressure from NGOs, banks
Indonesian coal mining company Bumi Resources continues to face financial woes and increasing pressure from NGOs. This week, mining advocacy group JATAM published a report detailing Bumi’s links to human rights abuses and environmental contamination. JATAM also called on major investors and underwriters – including Credit Suisse, JP Morgan Chase, and Deutsche Bank – to pressure Bumi to improve its production, or else divest from the company. Standard & Poor recently announced that Bumi was in a state of selective default following its failure to pay back its debt.

IOI Loders Croklaan Group faces intensified campaign.
The 5 million member online campaign organization SumofUs teamed up with the Forest Heroes campaign to launch an intensified effort that urged investors and consumer companies not to do business with IOI Group because of what they said were the company’s connections to deforestation, peatland clearance, and displacement of orangutans at several locations in Indonesia. A letter the groups sent to investors and customers cited Wilmar, GAR, and Cargill’s No Deforestation policies as a rationale for investors and customers to change their attitude towards IOI Group. “Given the plethora of responsible options emerging, there is little excuse for consumer companies to source from rogue palm oil suppliers like IOI Loders Croklaan,” the groups wrote. In a new accompanying web page launched for the campaign under the banner “IOI Loders Croklaan: the worst company you’ve never heard of,” the groups provided photographs and other evidence to back the allegations.

Commonwealth personal care giant announces palm oil commitment
PZ Cussons, the makers of the Imperial Leather brand of soaps and and other skin care products, announced a new No Deforestation, No Exploitation commitment, and that they’d joined The Forest Trust as a member. PZ Cussons has joint ventures with Wilmar in Ghana and Nigeria, and significant markets in Africa, Europe, and parts of Southeast Asia. The commitment is part of a trend of No Deforestation policies being increasingly implemented across Africa’s tropical forest zone.


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