Do you remember in 2009 when the World Bank’s lending arm, the International Finance Corp. (IFC), came under fire from human rights and environmental organizations lobbying to halt its funding of destructive palm oil development in Indonesia and Malaysia? The 18-month global moratorium on lending for new palm oil investments that followed was a direct result of the IFC violating its own standards on palm oil financing by providing loans to Wilmar International, the world’s largest palm oil producer.
Wilmar quickly became the poster child for irresponsible palm oil operations in Indonesia – failing to comply with national laws in Indonesia, illegally using fire to clear land, seizing land from Indigenous peoples without due process, lacking publicly available social and environment impact assessments, etc.
Unfortunately, this pattern is eerily similar to the problems of another global giant in the palm oil industry – Cargill, Inc.
Cargill and one of Wilmar’s majority stakeholders, ADM, are both US agribusiness giants responsible for a large portion of the controversial palm oil imported into North America. Another wholly owned Wilmar subsidiary, PGEO Edible Oils, has been a frequent supplier of palm oil to Cargill. Both Cargill and ADM continue to operate without basic supply chain safeguards, and neither take precautions against selling palm oil connected to major human rights violations like slave labor to their US customers.
The recent outbreak of community violence in Indonesia is exactly the sort of problem Cargill and ADM could avoid by adopting social and environmental safeguards on their suppliers.
Below is a letter of concern we sent to ADM this week in solidarity with the Indigenous community in the Dusun Sungai Beruang area on the island of Sumatra in Indonesia, where Wilmar was complicit in bulldozing the homes of community members earlier this month. Through multiple protests and visits to Jakarta, the community is demanding justice.
Patricia Woertz, CEO
Archer Daniels Midland Company
4666 Faries Parkway
Decatur, IL 62526
September 22, 2011
Dear Ms. Woertz,
I am writing to bring an issue of grave concern to your attention and ask that ADM take immediate action to address the problem. We have received information from partners and community representatives that PT Asiatik Persada, a wholly owned subsidiary of the Wilmar Group, is involved in a long standing conflict that recently escalated into violence and human rights violations in Jambi Province, Sumatra, Indonesia. As one of two majority shareholders in Wilmar, the world’s largest palm oil producer, we are calling on ADM to use its influence to convince Wilmar to remedy this problem and address the company’s ongoing pattern of social conflict, rights violations and harmful environmental impacts.
Due to Wilmar’s irresponsible palm oil operations in the past, the World Bank body froze all funding for palm oil expansion globally in 2009 and 2010. This latest case is yet another example of Wilmar’s poor track record.
Though some details of the incident remain unconfirmed, we believe it is unacceptable to destroy homes and forcibly evict community members to resolve outstanding conflicts. We were alarmed to learn about the recent escalation of the conflict and the violence with the Indigenous community in the Dusun Sungai Beruang area that included the forced eviction of families and destruction of their settlement. Bulldozing a community is not a viable dispute resolution process; it is a violation of human rights that requires urgent remedy.
Throughout the month of September, community members and NGOs have joined together to call for transparency and justice. There is an urgent need for action to address the current crisis as well as a long term need to promote reforms in Wilmar so that this situation does not arise again. As a major shareholder, ADM has a responsibility and is in a position of influence to call for reforms.
RAN joins these stakeholders in asking ADM to secure the following immediate actions to help remedy the grave situation in Jambi:
- Conduct a thorough investigation of the case by a mutually agreed independent third party
- Recognize the customary land rights and tenure of the Indigenous community (Suku Anak Dalam Batin Sembilan)
- Participate in and support a mutually agreed upon dispute resolution process to address the long standing conflicts with Wilmar
- If requested, provide humanitarian support for the affected victims in the community who have been impacted by this conflict
As part owner of the world’s single largest palm oil producer, ADM carries a large responsibility. We call on you to ensure that Wilmar adopt supply chain safeguards and addresses the systemic problems in its company operations that have resulted in ongoing social conflict as well as clearing of natural forests and exacerbation of climate change. We look forward to learning what you’ve done to address these grave concerns in the near future.
Forest Program Director, Rainforest Action Network