PRESS RELEASE: Palm Oil Giant Golden Agri-Resources Removed from Dow Jones Sustainability Index after Bribery and Corruption Scandal – so what next for ‘sustainable’ palm oil?

The Dow Jones Sustainability Index has removed the world’s second largest palm oil company, Golden Agri-Resources (GAR), from its list of sustainable companies, reported Friends of the Earth (FoE) this week.

“Golden Agri-Resources’ operations in Indonesia and Liberia have generated years of controversy, including consistent and well-documented allegations of deforestation, land grabbing and human rights violations,” said FoE in a statement on its website.

The human rights violations and environmental record highlight GAR’s failure to live up to its human rights and sustainability commitments. In 2018, GAR and its subsidiaries were accused of clearing protected forest, establishing shadow companies to continue destructive operations, and disregarding the recommendations of the Roundtable on Sustainable Palm Oil (RSPO).

The RSPO has been under pressure for years to rule against GAR’s continuing violations of human rights and its slow action to make remedy in palm oil areas.

“It is ironic that the Dow Jones Sustainability Index is more responsive to evidence of GAR’s misdeeds than the Complaints Panel of the RSPO itself,” said Marcus Colchester of Forest Peoples Programme, a UK-based human rights organisation and member of the RSPO.

Gaurav Madan, senior forests and lands campaigner for Friends of the Earth U.S. said “The removal of Golden Agri-Resources from the Dow Jones Sustainability Index is an important step in holding the company accountable for its consistent abuses. Companies that have caused widespread environmental destruction have no place being greenwashed as sustainable.”

Although this news is welcomed, there are many questions which must be answered if sustainable palm oil can be claimed as such, not least around human rights abuses.

Land grabs for palm oil plantations in Indonesia form a key tenet of human rights abuses associated with its production.

“Here, in Bengkayang, Indonesia, there are a lot of outstanding and unresolved problems due to palm oil land grabs,” said Niko Andasputra, Chair of AMAN-Bengsibas, a local organisation representing community members affected by palm plantations.

“Now that GAR is delisted from Dow Jones’ list of sustainable companies, what will it do to provide remedies to those who have outstanding problems and how long will that take?” he said.

What next for GAR and ‘sustainable’ palm oil?

Local Indonesian organisations welcomed the news that GAR has been delisted but added a note of caution about what action is taken next.

“The delisting of GAR is good news as it recognises the complexities of the problems in the palm oil sector,” said Norman Jiwan, advocacy lead for AMAN-Bengsibas, a local chapter in Indonesian Borneo of the National Alliance of Indigenous Peoples.

“But international voluntary standards must respect the human rights of affected indigenous peoples and local communities and provide proper remedies for past abuses,” he added.

Rahmawati Retno Winarni, Director of TuK Indonesia, a Jakarta-based NGO advocating corporate accountability said, “[the delisting] should lead to a more robust due diligence of investment decisions so that these decisions respect the rights of the affected communities and do not harm nature.”

Winarni also called upon a similar decisions to be made by the Sustainable and Responsible Investment Index in Indonesia. “Financial services wrongdoing is not a victimless act,” she said.

In Liberia, this view was echoed by civil society organisations, regarding local palm oil giant Golden Veroleum Liberia (GVL)*.

“Golden Agri-Resources is the financial backbone for GVL; GAR should be equally accountable for forest destruction and human rights violations occurring in GVL operations in Liberia,” said Daniel Krakue of Social Entrepreneurs for Sustainable Development (SESDev), a local organisation based in Liberia.

In addition to environmental and human rights issues, GVL faces questions around workers’ rights.

“The failure of GVL to address the safety and protection of workers in their factories are all indication of the company’s failure to respect the rights of human beings working for the company,” said James Otto of the Sustainable Development Institute (SDI), Liberia.

Otto added “GVL needs to reconsider its approach to ensuring that the rights of people are respected and protected at all times – these rights must extend to the movement of civil society organizations working to support the rights of local communities impacted by the company’s operations.”

*Golden Veroleum is owned by the U.S.-based Verdant Fund LP, whose sole investor is Singapore-listed palm oil giant Golden Agri-Resources, the world’s second-largest palm oil plantation company.

GVL tried to self-suspend its membership of the RSPO certification scheme in 2018 after the RSPO Complaints Panel upheld complaints that the company was violating its sustainability commitments. However, the RSPO Board ruled that self-suspension is not an option for members. Members must either adhere to the membership requirements or withdraw from RSPO altogether.  

More information: 

Contact Tom Dixon, Media Manager, Forest Peoples Programme, +44 1608 690760 | +44 7876 397915 | tdixon@forestpeoples.org

Link: https://www.forestpeoples.org/en/global-finance-trade-agribusiness-palm-oil-rspo/press-release/2019/press-release-palm-oil-giant