Cargill sets the record straight on the false allegations made by RAN in its May 2010 report

Cargill is a leader in growing and developing sustainable oil palm and we are working with well-respected environmental non-governmental organizations (NGOs), including WWF and Fauna & Flora International, to assist us and to support the sustainable development of palm oil in Indonesia. 

We want to set the record straight on the false allegations about Cargill made by Rainforest Action Network (RAN) in its May 2010 report ‘Cargill’s Problems with Palm Oil.’

We do not operate any undisclosed oil palm properties. RAN claims we have an undisclosed company called PT Harapan Hibrida Kelbar (HHK). We have no company under our ownership or any subsidiary or joint venture with such a name.

RAN makes a similar accusation about PT Indo Sawit Kekai (ISK). We have been extremely transparent about our ownership of ISK. We have included this property in our initial Roundtable on Sustainable Palm Oil (RSPO) assessments by our RSPO approved auditor, BSI, which is fully aware that ISK is required to be included in our property bank for Cargill to be RSPO compliant. BSI includes references to this property in their initial RSPO audits. Thus, we have fulfilled the RSPO requirement of disclosing all of our oil palm plantations and have committed to having all of our oil palm plantations RSPO certified.

RAN claims Cargill has cleared rainforests and primary forests. This is categorically untrue. It is our policy to not expand or develop new plantations in areas of high conservation value forest (HCVF) and we  have not cleared or developed any land that can be categorized as rainforest or primary forest. The entire area where our properties are located in Kalimantan were deforested by loggers over ten years ago, which was before we acquired the plantations. The land was logged and then converted to oil palm plantations. There is no rainforest or primary forest in, or anywhere in the vicinity, of our plantation.   

RAN claims Cargill illegally cleared ISK of approximately 10,500 hectares of natural forest and that we did not conduct a High Conservation Value (HCV) assessment of the land. Again, this is false. It is important to note that the ISK land was not zoned as forest by the government before we were granted the rights to develop the property. The land has had two HCV assessments.  One was completed by the organization Environmental Monitoring & Management and another has been completed by Fauna & Flora International, an internationally respected environmental NGO, which utilized ProForest’s stringent HCV Toolkit in their assessment.  As a result of the HCV audit by Fauna & Flora International about 50 percent of the ISK land we had government permission to develop has been conserved.  The Fauna & Flora International HCV report was presented to the RSPO and is fully open to the public, which directly refutes the false allegation that we are hiding our ownership of ISK.

RAN falsely claims that we use burning to clear land. We have a strict no-burn policy for land preparation and so we have never burned land for clearing. We even record fires on our plantations and report these to local police. RAN cites that there were fires on Cargill concessions, which is true. However, the fires in 2007 occurred from natural causes when El Nino created very dry conditions in the entire Kalimantan area. The conditions were so dry that we actually lost thousands of oil palm trees on our plantations from these fires. Every plantation in the area suffered the same fate as a result of this drought. 

RAN accuses Cargill of developing plantations on peat land. Again, this is not true. We have committed that we will not develop new plantations on deep peat land. There is no peat land in the Harapan or ISK developments. ISK was verified as having no peat land by soil samples during the HCV assessment undertaken by Fauna & Flora International. 

RAN claims that Cargill has developed land against local land owners’ wishes. This is also not true. All of the land that we have developed in Kalimantan requires a purchase agreement with the local land owner. The sales agreement is approved by the local village chief. We have not developed any land without the explicit permission, signed land sales agreement and payment made to each and every land owner. We have records of payments made by Cargill to each land owner and pictures of each land owner. This is evidenced by the fact that there are open plots in and around our plantations, where the local land owners chose not to sell their property to Cargill.

RAN makes the accusation that the ISK plantation has polluted the river water from its mill effluent. This is impossible because ISK does not have a mill. At our Harapan plantation, we have two palm fruit processing mills and both are government approved effluent treatment facilities with land application permits. Every six months we submit an effluent monitoring report to the local Department of the Environment that includes testing results at designated points, as stipulated in our environmental impact assessment (AMDAL). In addition, after the effluent is treated, much of the water is pumped back onto the plantation to conserve water and act as a natural fertilizer. It is also important to note that there are no inorganic chemicals in the effluent.  The effluent consists of water and waste resulting from processing palm fruit bunches.

In its report, RAN falsely claims that Cargill does not leave buffer zones along waterways; this is untrue. Cargill has left the existing natural vegetation and trees areas along rivers and other waterways untouched.

RAN cites the Indonesian regulations (of 1999) which specify that a single company cannot control more than 20,000 hectares of plantation in a single district. However they omit to cite the 2007 Regulations of the Minister for Agriculture which allow total ownership of up to 100,000 hectares nationally with no restriction on the province.

RAN falsely claims Cargill does not have the environmental impact assessment (AMDAL) to develop ISK. The government has granted the ISK development an environmental management and monitoring document (DPPL) in lieu of an AMDAL for the development of the site.

RAN has also made allegations about our supply chain relationships. We have set a goal of buying 60 percent of our total crude palm oil from RSPO members by the end of 2010. We are encouraging our third party suppliers to join RSPO and attain certification, and it is our hope that all oil palm plantations become RSPO certified. Our eventual goal is to have a 100 percent RSPO certified supply chain in the future. Additionally, our corporate policy states we will stop buying from any company that is formally expelled from the RSPO for failure to abide by the RSPO code of conduct, principles and sustainability criteria.

We have had Duta Palma on our no-trade list for over two years because they did not meet our supplier requirements. We have not done any direct business with them in 2008 or 2009 and we do not intend to buy from them in 2010. We are also keenly aware of the allegations made by Greenpeace about the Indonesian palm oil company, Sinar Mas. Sinar Mas has appointed leading certification bodies to conduct an independent and thorough verification of the allegations. If this independent verification process validates the allegations and Sinar Mas does not take corrective action, we will delist them as a supplier.

RAN falsely claims SALCRA (The Sarawak Land Consolidation And Rehabilitation) manages palm plantation areas in Sarawak. SALCRA does not own or manage any oil palm estates in the central or northern regions of Sarawak as the majority of oil palm estates it manages are located in Kuching, Samarahan, Sri Aman and Betong divisions. There is no High Value Conservation Forest (HVCF) within the secondary forest that SALCRA develops into oil palm and therefore it is not true that SALCRA is involved in deforestation for its oil palm projects. All of SALCRA’s new land development are on mineral soil and the areas oil palm that it does have on peat soil in the Saratok Region were planted in early 1990s. SALCRA has adopted a zero burning policy since 1990s, land clearance is undertaken mechanically and debris is not burned and so it strongly refutes RAN’s claims of burning occurring in 2006 and 2007. Before commencing any oil palm project, SALCRA engages with local landowners to explain its development concept. Only when the landowners are satisfied with the benefits that the projects will bring to them will they sign the “Letter of Consent” enabling SALCRA to develop their land. So, there is no truth that in Serian Region there is multiple larger-scale land conflicts between the indigenous Dayak and oil palm.

Cargill believes palm oil should be produced sustainably, we are committed to working towards sustainable palm oil production and we fully support the RSPO process. Our palm plantation – PT Hindoli in Sumatra, Indonesia – was one of the first to receive RSPO certification in February 2009 and we are working to certify our other plantation in Indonesia as quickly as possible. Our Hindoli smallholders are also scheduled to be RSPO certified this year – we expect they will be the first smallholders certified globally.

We also have set a goal of buying 60 percent of our total crude palm oil from RSPO members by the end of 2010 and encourage all of our suppliers to become members of the RSPO and to work to certify their plantations.

For some time, we have also had our own policies in place for responsible palm production on our own plantations. These include commitments that we will not plant on high conservation value forests (HCVF); we will not develop new plantations on deep peat land or land that would threaten biodiversity, including orangutans and other native species. We also have a strict no-burn policy for land preparation.

Additionally, we are working with local communities and international organizations such as WWF, Conservation International and Fauna & Flora International to protect HCVF and species in and around our plantations, and we have contributed to research to encourage the viability of palm oil development on degraded land.