Sale of permit raises concerns for HCS forests and orangutan habitat

(foresthints.news) - A palm oil plantation development permit whose concession contains widespread swathes of high carbon stock (HCS) forests, and also includes the habitat of the Bornean orangutan, has been sold for nearly USD3.2 million.

Genting Plantations, a major Malaysian palm oil company, has sold the permit granted to its subsidiary PT PSM by the Indonesian Forestry Ministry in 2013, for a concession a quarter of the size of Singapore, to Suryaborneo Mandiri.

Eric Wakker, co-founder of AidEnvironment Asia, expressed his concern at the sale of this permit in a written discussion with foresthints.news (Mar 23).

“PT PSM’s concession area should be a compensation landscape for the RSPO members operating in Ketapang regency (West Kalimantan province),” Eric lamented.

The following Google Earth images depict the land cover in PT PSM’s concession area over the last two years. It is clear that, on the whole, most of the HCS forests and habitat of the Bornean orangutan found in the concession are still in good condition and have yet to be cleared.

With the sale of the permit, however, clearing of the concession’s forests is likely to take place in the near future. In light of this, Eric warned “No one will buy the FFB and CPO sourced from PT PSM’s palm oil concession.”

He added that any HCS forest and Bornean orangutan habitat which is cleared is definitely going to be used as a source of timber for the mills operating in the surrounding area.

High timber value

A glance at the land cover in PT PSM’s concession area certainly provides a strong basis for Eric’s statement about the timber sources to be generated from the area. The Google Earth images below demonstrate that the concession area retains a high timber value.

It is apparent in these Google Earth images that the timber value of the PT PSM concession remains fairly significant. Adding to its significance is the fact that the concession is also home to the Bornean orangutan.

Eric further vented his worries at the likelihood of more forest destruction. “All in all, it’s complete nonsense to develop palm oil plantations on that land.”

The business links between Genting Plantations and other giant palm oil business groups which have declared their commitment to cleaning up their supply chains from deforestation, such as Wilmar International and Musim Mas, were in all probability a major consideration in the Malaysian company’s decision not to develop palm oil plantations in PT PSM’s concession area.

The development of such palm oil plantations would necessarily involve deforestation practices, including the eradication of part of the Bornean orangutan habitat.

However, the trend of selling palm oil permits, as done by Genting Plantations in this case, is a cause for major concern in the palm oil industry, which claims to be transforming itself by cleaning up supply chains from deforestation.

If the trading of palm oil permits involving concession areas with HCS forests and key wildlife habitats becomes more commonplace, then efforts by the palm oil sector to clean up supply chains, as a means of drastically slowing the pace of deforestation, are less likely to be successful.

Earlier concerns realized

In late September 2014, Greenomics Indonesia released a report which raised concerns about how Genting Plantations planned to deal with the high carbon stock forests and Bornean orangutan habitat situated in the PT PSM concession.

Subsequently, in early March 2015, at a meeting facilitated by Wilmar, Genting Plantations reaffirmed its commitment to refrain from developing the HCS forests in question.

As such, the sale of PT PSM's palm oil permit by its parent company, Genting Plantations, is truly surprising.

Furthermore, this move exposes a discrepancy between the company's promise as outlined in Wilmar’s grievance update report - which details the progress of Wilmar's handling of complaints related to the implementation of its commitment to clean up its supply chains from deforestation - and the current reality.

As it turns out, rather than protecting the HCS forests it undertook not to develop, Genting Plantations has simply sold the concession permit, leaving the area vulnerable to exploitation.