Plantation Development in Sarawak Threatens Trader’s Sustainability Policy (UPDATED)

This week, a palm oil plantation company with supply chain links to US-based agricultural trader Bunge announced its plans to expand development on to 14,000 hectares of carbon-rich peatland in the Malaysian state of Sarawak. As reported in The Malaysia Star, BLD Plantation Bhd plans to develop its 14,000 ha landbank on peat soil over the next two years. This development would have an enormous climate impact, emitting roughly 37 million tons of CO2 into the atmosphere – the equivalent of putting about 7 million cars on the road.

BLD is a supplier to the palm oil refinery Kirana, which in turn sells its products to Bunge. In October 2014, Bunge joined other industry leaders by adopting a No Deforestation, No Peat, No Exploitation policy for its palm oil supply chain, which extends to the company’s subsidiaries and third-party suppliers. Thus, BLD’s planned development poses an imminent risk of breaching Bunge’s sustainability policy.

Therefore, Forest Heroes has formally filed this case with Bunge as a grievance under its No Deforestation, No Peat, No Exploitation policy, and have requested the company take the following actions:

  • Announcement of immediate moratorium on any development by BLD Plantation Bhd.
  • Adoption of strong No Deforestation, No Peat, No Exploitation policies and near-term implementation plans and partners by BLD Plantation and Kirana that cover third-party suppliers and subsidiaries.
  • Commitment to restore an area of peat and forest at least equivalent to areas previously cleared by BLD Plantation.
  • Resolution of community complaints.

When Bunge adopted its policy, Forest Heroes noted that it was set to have an outsized impact because it has been the largest buyer of palm oil from Sarawak, on the island of Borneo, which has been the epicenter of devastating climate pollution unleashed from the clearing of peatlands. Peat is almost pure carbon, and destroying peatland to create palm oil plantations is the largest contributor to climate change in Southeast Asia – with Sarawak one of the top contributors. Eliminating the conversion of peatlands to plantations is one of the most critical steps to reducing the climate impacts of the palm oil industry.

Sarawak’s government has also launched a crackdown on illegal logging and land conversion for plantations. In May, the Sarawak Chief Minister Tan Sri Adenan Satem publicly stated that he would work to end new concessions for timber and palm oil development, and passed a new forestry bill that could boost penalties for illegal logging.

“Bunge is playing a constructive role in moving the palm oil industry rapidly away from the destruction of forests and peatlands, and supporting sustainable, legal development in Sarawak” said Forest Heroes chairman Glenn Hurowitz. “We are confident that Bunge will move quickly with its regional business partners and the Sarawak government to channel development onto areas that don’t threaten forests, peat, or Native Customary Rights land. Both the government and the private sector have recognized that Sarawak can continue to grow its agricultural economy and employment while protecting forests, peat, and communities, and it’s important to ensure that BLD doesn’t undermine this critical statewide initiative.”

UPDATE (JUNE 23): Today, Bunge issued a public response to Forest Heroes’ complaint, writing in a statement to Mongabay: “In light of the recently reported plans of BLD, Bunge has suspended indefinitely any new commercial activity with Kirana and its affiliates. This decision is effective immediately.” Forest Heroes is glad to see that Bunge has moved quickly and decisively, as we had expected they would, to cut off business with any suppliers that violate the company’s sustainability policies by threatening forests and peatlands.

On June 19, 2015
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