Fonterra’s link to "dirty secret" in Indonesia

Source: Greenpeace

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Fonterra is about to take another hit to its international reputation, this time over rainforest destruction and cow feed.

A Greenpeace investigation out today reveals the New Zealand dairy giant’s key supplier of palm kernel expeller (PKE) has links to a huge expanse of deforestation in Indonesia.

The practice of clearing tropical rainforest for palm plantations has been condemned for its effects on climate change and the habitat of endangered animals like the orangutan.

Fonterra imports PKE, a product made by the palm oil industry for supplementary feed. New Zealand is the world’s largest user, bringing in a quarter of the global supply.

After public outcry two years ago Fonterra agreed to adopt an industry standard to ensure its use of PKE wasn’t leading to deforestation.

Now embarrassingly it’s main supplier of PKE, Wilmar, has been linked with the mass destruction of rainforest on Papua, Indonesia.

"The international reputation of NZ's dairy industry is seriously on the line here and so are the world’s last remaining rainforests." says Gen Toop, Greenpeace’s sustainable agriculture spokesperson.

Photos taken by Greenpeace International on a recent flyover show an area of forest twice the size of Paris has been destroyed.

"Fonterra’s attempts to get rainforest destruction out of their supply chain have clearly failed. They need to get out of PKE altogether."

Fonterra’s website says of its major PKE supplier: "Wilmar have a ‘no-deforestation, no-exploitation, no peat policy, respect designated conservation areas and employ wildlife protection experts.

"The Greenpeace Investigation shows the concessions on Papua belong to a business called Gama. Documents reveal that it’s run by senior Wilmar executives and members of their family.

"Our investigation has exposed Wilmar’s dirty secret. For years, Wilmar and Gama have worked together, with Gama doing the dirty work so Wilmar’s hands appeared to stay clean."

"This revelation again implicates NZ’s dairy industry in deforestation in Indonesia," says Toop. As well as being involved in deforestation in Indonesia, PKE is also one of the main drivers of dairy intensification in New Zealand.

"PKE fuelled the expansion of industrial dairy farming here in NZ. We now have way too many cows polluting our rivers and warming our climate." says Toop.

"We’ve got to ditch PKE, re-focus onto pasture based dairying and farm fewer cows. These are the first steps towards transforming NZ's dairy industry to regenerative farming which is the direction we need to be going. "

ENDS

Notes: Gama, one of Indonesia’s largest palm oil plantation companies, was set up by Wilmar’s co-founder, Martua Sitorus and his brother Ganda in 2011. [1]

Gama’s concessions are owned and managed by members of Ganda’s and Martua Sitorus’s family, which includes Wilmar’s Country Head and Deputy Country Head for Indonesia.

In December 2013, Wilmar became the first palm oil trader to publish a ‘no deforestation, no peat, no exploitation’ (NDPE) policy that applied in its own plantations and those of its suppliers.

Mapping and satellite analysis shows that Gama destroyed 21,500ha of rainforest or peatland since Wilmar made its commitment.

Wilmar also has a history of evading responsibility for environmental and human rights abuses by selling off its most controversial concessions to Gama. [2]

Much of this deforestation has occured in just three of the concessions examined in Greenpeace’s report:

PT Graha Agro Nusantara (PT GAN), West Kalimantan, Kubu Raya district - 7,000ha of forest or peatland cleared since 2014

PT Agriprima Cipta Persada (PT ACP), Papua, Merauke district - at least 3,190ha of forest cleared since 2015

PT Agrinusa Persada Mulia (PT APM), Papua, Merauke district - at least 2,500ha of forest cleared since January 2016.

[1] Like many family-owned companies in Southeast Asia, Gama does not have a formal structure; instead, it is a network of plantations and palm oil companies owned, managed or controlled by Ganda and Martua Sitorus, and members of their family. Martua Sitorus is the co-founder of Wilmar and remains a board member. He is also CEO of Gama. Ganda’s and Martua Sitorus’s brother-in-law, Hendri Saksti is Wilmar’s Country Head, Indonesia. He also owns or manages Gama plantations.Sitorus and Saksti’s nephew / Ganda’s son Darwin Indigo is Wilmar’s Deputy Country Head, Indonesia. He also manages S&G Biofuel, a Gama joint venture.Sitorus and Saksti’s nephew / Darwin’s brother Andy Indigo manages the remaining Gama plantations or holding companies. [2]

In 2004, Wilmar sold PT Jatimjaya Perkasa to Gama (then known as Ganda Group) following accusations of deforestation in the concession from Friends of the Earth. In 2013, Wilmar sold PT Asiatic Persada to Gama (then known as Ganda Group) following accusations of social conflict with local communities. In 2014, Wilmar sold PT Citra Riau Sirana to Gama, following accusations from Eyes on the Forest / WWF of receiving fresh fruit bunches of oil palm from illegal plantations within Tesso Nilo national park.Wilmar denies having any influence over Gama, although it admitted in a fax to Greenpeace International that Gama is run by Wilmar senior executives and members of their family.

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