Indonesian firm BW Plantation’s (BWPT) $900M share rights offering rife with concerns over labour rights, wildlife and deforestation.
FOR IMMEDIATE RELEASE
CONTACT: Laurel Sutherlin, 415.246.0161, Laurel@ran.org
Indonesian palm oil firm BW Plantation (BWPT) approved last week a USD $900 million share rights offering in a bid to finance its merger with Green Eagle Holdings (GEH). New stock not purchased by existing shareholders will be traded on the Jakarta Stock Exchange (IDX) from Monday December 8. Already lagging behind its competitors who have committed to zero deforestation policies, BWPT has failed to declare to investors the serious environmental, social and financial risks involved with deforesting and planting over its massive new land bank.
Rainforest Action Network (RAN) has published an in-depth backgrounder/briefing document titled Conflict Palm Oil Case Study PT BW Plantation (BWPT) $900 Million Stock Offer Warning: Investors Need Greater Disclosure of Environmental, Social and Legal Risks.
The deal expands BWPT's holdings from just under 100,000 ha to over 400,000 ha, making it Indonesia’s third largest palm oil company listed on the IDX. However, 75% of the new land bank - with holdings in Papua, Sulewesi, West, East and South Kalimantan and Sumatra - is unplanted and likely includes large tracts of primary forests, Indigenous and local community lands, and areas of carbon-rich peatlands.
Tom Picken of Rainforest Action Network said, “The last thing Indonesia needs is a near-billion dollar injection of cash that will simply fuel Conflict Palm Oil production. We encourage potential investors to steer clear of this controversial deal until BWPT discloses the true extent of risks, and publicly commits to no deforestation, no exploitation, and no peatland expansion across its entire operations.
Publicly available information on GEH plantations should raise alarm bells for investors. A basic review of available satellite data and local media reports indicates aggressive clearance of High Carbon Stock (HCS) forest since 2010, orangutans needing to be rescued from a Kalimantan concession two weeks ago, at least one case of serious labour rights violations this year in Papua, as well as a number of community conflicts.
Picken added, “BWPT is already failing to comply with its obligations under the Roundtable on Sustainable Palm Oil (RSPO) relating to new plantations. Adding the Green Eagle operations into the mix may seriously jeopardise BWPT’s eligibility to remain a member of RSPO at all, judging by the little information that is in the public domain highlighting numerous scandals in Green Eagle plantations.
“Aside from being a disaster in the making for the climate, local communities and the environment, this deal is a risky gamble for investors. That’s because this offering completely ignores the changing business climate. There has been a tide of deforestation-free commitments from major players in this arena recently, including BWPT’s two largest buyers of Crude Palm Oil (CPO) -- Wilmar International and Golden Agri-Resources (GAR), which make up almost half of BWPT’s sales. Unless BWPT gets into line with these improved palm oil standards, then it will lose its biggest clients while investors could see their stock plunge.”