Palm oil manufacturer admits ‘regulatory gaps’ in forest clearing


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Palm oil manufacturer admits ‘regulatory gaps’ in forest clearing

Related tags Palm oil Indonesia

Indonesian palm oil manufacturer Bumitama has denied accusations by a lobby group that they have cleared areas of rainforest without a permit and caused damage to endangered species, but admitted to “regulatory gaps” in their operations which needed to be addressed.

Friends of the Earth, a global group which campaigns for environmental friendliness in Indonesia, released a report on November 21 suggesting that the company had cleared areas of land containing endangered orangutans in “violation of international laws.”

Palm oil is quickly becoming one of the most popular ingredients in cosmetics and personal care products, and is being adopted by major players like Avon and Johnson & Johnson for surfactants, conditioners and emulsifiers.

Bumitama has subsequently halted operations by three of its subsidiary companies and stated that it is working on a timeline with the RSPO in order to resolve the issues with its clearing.

A spokesperson from the company commented to “Bumitama has the required licenses to clear the concession areas and except for the compliance gap to RSPO mentioned in our press release dated 21 November, Bumitama is in compliance with Indonesian law and regulation.”

Regulatory gaps

The firm has ceased planting operations by the companies PT Ladang Sawit Mas, PT Nabatindo Karya Utama and PT Andalan Sukses Makmur until the dispute is resolved.

Bumitama claims that despite the legal issues related to its manufacture of palm oil, it did not endanger any orangutans with its operations.

Spokespeople from the company stated: “Bumitama is fully committed to managing the environment responsibly and sustainably, as well as to be a good member of the RSPO. Bumitama is listed on the Singapore Stock Exchange which has the highest level of corporate governance, and companies listed in SGX have to comply accordingly.”

Greenwashing in the RSPO

FOTE states in its report: “Bumitama’s apparent violations of Indonesia’s forestry and environmental laws have many implications.”

“Aside from the primary concern of harvesting and selling FFB from unpermitted land in violation of environmental and spatial planning laws, it is difficult to understand how the profits earned from plantations managed without any valid permit, would comply with required forestry, land and building taxes.”

The group also accuses the regulatory body RSPO of “greenwashing” ​unethical production of palm oil in Indonesia, as well as ineffective 'voluntary' legislation meant to prevent companies from clearing forests.

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