May 11, 2015
The Roundtable on Sustainable Palm Oil (RSPO) has ordered a unit of one of the world’s top producers, Singapore-listed Golden Agri-Resources Ltd (GAR) to stop buying or developing new plantations in Indonesia after it was discovered to have breached land acquisition rules.
GAR is the parent company of Indonesian palm plantation company PT Sinar Mas Agro Resources & Technology (SMART), which has 473,000 hectares of palm plantations in Sumatra and Kalimantan on the island of Borneo, however it is a separate subsidiary that is being accused of acquiring land from locals without informed and free consent.
The RSPO’s complaint panel issued a letter dated May 6 stating that GAR had failed to adhere to rules regarding conservative assessment and consent of local people before converting land in West Kalimantan, and gave GAR until May 20 to respond to the panel’s preliminary decision.
The RSPO carries the ability to revoke membership, which for GAR could mean the potential decline in purchases from Western buyers who have pledged to source only sustainable palm oil and palm oil products, although it is likely that a settlement and agreement will be reached.
GAR, which is due to post its first quarter results this week, has stated that it has voluntarily tabled all plans for land preparation for new plantings since November, 2014.
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