The Chain: NDPE Implementation of Palm Oil Refineries Increases To 75%


May 6, 2020

Just before last week’s release of Chain Reaction Research’s (CRR) report on NDPE and palm oil refiners, the large refiner Permata Hijau Group published a list of its suppliers and opened a grievance system. CRR has updated its report accordingly. As a result of this change, effective NDPE coverage by palm oil refiners increased from 72 to 75 percent.

The Permata Hijau Group is the tenth largest palm oil refiner in Indonesia/Malaysia. It has five refineries in North Sumatra and Riau, with a combined capacity of over 2 million MT per year. The company has had an NDPE policy since 2017, yet its implementation was relatively weak.

Analyzing the new list of Permata Hijau’s suppliers, it appears to source from several mills that are located around the Indonesian Leuser Ecosystem. The Leuser Ecosystem — home to tigers, elephants and orangutans – is one of the highest biodiversity ecosystems in the world. Oil palm expansion by palm oil companies continues inside and/or in areas bordering the Leuser Ecosystem.

There are 92 palm oil mills operational within a 40-kilometer range of the Leuser Ecosystem. Permata Hijau sources from 45 of these mills. This means that the company will have to engage with mill companies to protect the Leuser Ecosystem and stop deforestation.

Figure 1: Palm oil mills inside or surrounding the Leuser Ecosystem

Note: The boundary of the Leuser Ecosystem is marked in red. Palm oil mills are marked in orange, while the mills that Permata Hijau sources from are also marked in yellow.

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