March 28, 2018

New CPO mill constructed in targeted peat restoration site

( - Construction of a palm oil mill by PT GAN, a subsidiary of the AMS Ganda Group / GAMA Plantation, located in West Kalimantan’s Kubu Raya regency is almost complete, delivering an extremely embarrassing lesson learned to the Indonesian Peat Restoration Agency (BRG), given that this location forms part of its targeted peat restoration map.

It seems that the building of this CPO mill has gone completely undetected by the peat agency. Making matters worse, the construction of the mill is still underway, yet the peat agency has neglected its responsibilities and is totally absent, making the location in question appear as if it was never part of the targeted peat restoration areas.

Most of the CPO mill is situated in one of PT GAN’s own concession blocks, which - along with another concession block - has already been subjected to massive new canal development by the palm oil company, as earlier exposed by (Mar 26). This constitutes a clear and brazen peat violation on the part of PT GAN, yet the peat agency was unable to recognize this as such.

The ongoing construction of the CPO mill and extensive new canal development being undertaken by the GAMA Plantation company commenced after a prohibition against new peat development went into effect. This ban, which was stipulated in a newly-revised government regulation on peat management and protection enacted in early December 2016, is deemed necessary as this practice causes peat drainage.

On-the-ground information obtained by the team (Mar 26) reveals that the new GAMA Plantation mill has been operating for the past two months, supplying CPO to Wilmar International.

The following photos, taken from different angles by the team (Mar 26), show that the new CPO mill, the final construction of which is still in progress, involves parts of the peat agency’s peat restoration areas and Indonesia’s peat protection zones.

Total disregard

GAMA Plantation has well and truly taken advantage of the peat agency’s abysmal monitoring of its targeted peat restoration areas, displaying total disregard for Indonesia’s new peat regulations by building the CPO mill and carrying out massive canal development in locations where these activities are forbidden.

The total neglect of the law demonstrated by the GAMA Plantation reinforces just how ineffective Wilmar has been in enforcing its No Deforestation, No Peat and No Exploitation (NDPE) policy which was publicly announced in early December 2013.

Wilmar cannot plead innocence in this case, having sourced CPO from the newly-constructed mill which lies in a targeted peat restoration area and peat protection zone. In fact, Wilmar has shown total indifference towards its own NDPE policy.

The large-scale development of canals in the two PT GAN concession blocks, which are areas targeted for peat restoration and are also home to the critically-endangered Bornean orangutan, as depicted by the photos below, highlights the fact that Wilmar’s monitoring of its NDPE policy is highly irresponsible and ineffective, just like the monitoring performed by the peat agency.

Questionable business transformation

Wilmar’s continuing sourcing of palm oil directly from a new mill being built in a location legally designated as a targeted peat restoration area and peat protection zone raises crucial questions about the business transformation model being built by Wilmar.

Indonesian Environment and Forestry Minister Siti Nurbaya, in late January this year, emphasized that palm oil companies which have committed to implement an NDPE policy need to prove this commitment on the ground, especially by cleaning up their supply chains from deforestation and peat destruction.

Wilmar, however, has displayed a willingness in this case to support the business-as-usual practices of PT GAN in direct contradiction to the appeal made by the minister.

Indeed, it appears that the world’s biggest palm oil trader still retains various bad lessons learned when it comes to integrating its NDPE policy on the ground level, despite the policy being already almost five years old.