No Less an Authority Than the Highest Court in the Land Has Now Confirmed That Palm Oil Producer Bumitama Agri Ltd. Violated

Total Page:16

File Type:pdf, Size:1020Kb

No Less an Authority Than the Highest Court in the Land Has Now Confirmed That Palm Oil Producer Bumitama Agri Ltd. Violated These trees were felled illegally to make room for oil palm plantations. “No less an authority than the highest court in the land has now confirmed that palm oil producer Bumitama Agri Ltd. violated Indonesian law when it let its subsidiary PT. HPA clear 7,000 hectares of rainforest”, writes Nordin, an activist with our Indonesian partner organization Save our Borneo. The Indonesian Supreme Court ruled in a two-year dispute between the country’s Forestry Ministry and Bumitama Agri Ltd. The court confirmed that the company did not have a valid permit to clear-cut Central Kalimantan’s unique primary forests for palm oil plantations. “We won!” Nordin writes. “This verdict is a great success for our campaign work.” Nordin became aware of the illegal deforestation in March 2012 and filed a complaint, whereupon the company threatened him and had him repeatedly interrogated by the police for making what it claimed were “false accusations in public”. Rainforest Rescue supported Nordin’s work by collecting 45,000 signatures in an online petition to the plantation operators and their corporate customers in the West. Bumitama Agri Ltd. is a major player in the palm oil business. According to its own figures, the Indonesian company owns or uses 204,052 hectares of land in Borneo and Sumatra, of which more than two thirds are now occupied by oil palm monocultures. Bumitama Agri Ltd. is listed on the Singapore Stock Exchange, and the influential IOI Group of Malaysia holds 33 percent of its shares. IOI supplies multinational corporations such as Nestlé and Unilever and the biofuel producer Neste Oil – thus putting conflict palm oil on our dinner tables and in our fuel tanks. All of these Western companies underscore their high production standards as well as their social and environmental responsibility toward the source countries of their palm oil. While Bumitama Agri Ltd. is now loudly calling for damages for goods and investments to placate its shareholders, Nordin is pushing for compensation for the affected village community. “The district government needs to return the land rights previously stolen by PT. HPA. The plantation should then be managed directly by a state company or another entity while giving the community a stake.” Background On March 23, 2012, Nordin, an activist with our partner organization Save our Borneo, was alerted by residents of Tumbang Kalang village in the province of Central Kalimantan. At the scene, all that remained of a dense rainforest were stacks of felled tree trunks. Oil palm seedlings were already planted on nearly half the area. The 1,000-strong local community had lost its forest with its rubber and fruit trees. The soils and surface waters are now contaminated. Nordin immediately investigated the environmental crime and discovered that in 2008, the Forestry Ministry in Jakarta had revoked the permit it had issued eight years previously to PT. HPA, a subsidiary of Bumitama Agri Ltd., after the company had left its concessions unused for all those years. It was not until after the permit had been revoked that PT. HPA began clear-cutting the land and planting oil palm trees. In 2012, Nordin publicized the illegal deforestation and filed a complaint. He continued his campaign despite the threats he was receiving, ultimately prompting the district chief to revoke the permission he had granted to PT. HPA. The palm oil company then sued, initially prevailing before the local and higher administrative courts. Finally, the Forestry Ministry turned to the Indonesian Supreme Court and was successful against Bumitama Agri Ltd. “The Forestry Ministry’s revocation of the deforestation permit with its letter SK. 51/Menhut-II/08 dated 11 March 2008 is thus legally binding,” Nordin notes. “Bumitama Agri Ltd.’s clear-cutting was illegal under Indonesian law.” Despite a clear verdict by Indonesia's Palm oil is literally everywhere – in our Supreme Court (see News and Updates), a foods, cosmetics, cleaning products and palm oil company is still clearing land in fuels. How could it come to this? What can Borneo's Tanjung Puting National Park and we do to protect people and nature? encroaching on the last remaining habitats of endangered orangutans and proboscis monkeys. Please take a stand and sign our petition to the Indonesian government. .
Recommended publications
  • How Dirty Palm Oil Is Feeding the Climate and Extinction
    DYING FOR A COOKIE HOW DIRTY PALM OIL IS FEEDING THE CLIMATE AND EXTINCTION CRISIS ‘Wearetakingstepstoensurethatthepalmoilwebuyisproduced onlegallyheldland,doesnotleadtodeforestationorlossofpeat land,respectshumanrights,includinglandrights,anddoesnot useforcedorchildlabor.’ Mondelēz International Palm Oil Action Plan, June 2014 11 December 2016, PT Ladang Sawit Mas, 1°32’20.856”S 110°18’58.122”E: ©Ifansasti/Greenpeace Cover and right: March 2013, PT Ladang Sawit Mas:One of several orangutan rescue attempts by International Animal Rescue Indonesia in the Bumitama oil palm concession. ‘Theunsustainable useofnatural resourceshas causedadramatic declineofBornean orangutans[...]Our findingssuggest thatmorethan 100,000individuals havebeenlostinthe 16yearsbetween 1999and2015.’ Maria Voigt, researcher at the Max Planck Institute for Evolutionary Anthropology, September 2017 CONTENTS CALLING TIME ON MONDELēZ 1 EYES WIDE SHUT: HOW CONSUMER BRANDS AND THE RSPO SUPPORT THE TRADE IN DIRTY PALM OIL 2 BUMITAMA AND ITS DIRTY SECRETS 5 Bumitama’s ownership, structure and landbank 4 Quantifying Bumitama’s forest loss liability 7 Bumitama’s and IOI’s response 7 CRUNCH TIME FOR MONDELĒZ AND THE PALM OIL SECTOR 8 BUMITAMA’S LAUNDERING OF A TOXIC LEGACY 12 Associated parties 13 Citro Utomo 13 Djoni Rusmin and Tommy Santoso 14 Nita Gartika and Janta Halim 16 CASE STUDIES 20 PT Gunajaya Harapan Lestari (PT GHL), West Kalimantan 20 PT Hatiprima Agro (PT HPA), Central Kalimantan 22 PT Golden Youth Plantation Indonesia (PT GYP) and PT Ladang Sawit Mas (PT LSM),
    [Show full text]
  • The Green Tigers
    The Green Tigers Which Southeast Asian Companies Will Prosper in the New Age of Forest Conservation? SEPTEMBER 2014 Which Southeast Asian companies will prosper in the new age of forest conservation? © DeanBirinyi / istockphoto.com THE GREEN TIGERS Which Southeast Asian companies will prosper in the new age of forest conservation? By Glenn Hurowitz Southeast Asia’s economies are roaring. The rise of the so-called “Asian tiger” economies has been one of the most profound developments in global business over the past half-century. But even as the region grows, the manner of its growth is imperiling its future prosperity. Too much of Asia’s growth has relied upon defor- estation and pollution. Instead of pursuing lasting development, many countries and companies in the region have favored “spreadsheet development” that prioritizes goosing national gross domestic prod- uct numbers at the expense of making a positive impact on the communities where it occurs. Southeast Asia is by no means unique in pursuing this model, but it is possibly the place where it is followed most energetically—and with the most visible consequences. Too many companies are still putting the region’s environment and economy at risk through continued deforestation and other irresponsible practices. But some countries and companies are choosing a different path. They are adapting to the revolutionized global market by evolving to ensure that their growth does not come at the expense of forests. These are the Green Tigers – and they are set to roar for decades to come. There is great urgency behind this corporate evolution: Deforestation for palm oil and paper plantations has turned the region into a tinderbox.
    [Show full text]
  • Unilever Palm Oil Mill List
    2017 Palm Oil Mills No. Mill Name Parent Company RSPO Certified Country Province District Latitude Longitude 1 ABDI BUDI MULIA PKS 1 AATHI BAGAWATHI MANUFACTURING SDN BHD No Indonesia Sumatera Utara Labuhan Batu 2.0512694 100.252339 2 ABEDON OIL MILL KRETAM HOLDING BERHAD Yes Malaysia Sabah Kinabatangan 5.312106 117.9741 3 ACEITES CIMARRONES SAS ACEITES S.A. Yes Colombia Meta Puerto Rico 3.035593889 -73.11146556 4 ACEITES MANUELITA YAGUARITO CI BIOCOSTA Yes Colombia Meta San Carlos de Guaroa 3.882933 -73.341206 5 ACEITES MORICHAL CI BIOCOSTA No Colombia Meta San Carlos de Guaroa 3.92985 -73.242775 6 ADELA POM FELDA No Malaysia Johor Kota Tinggi 1.552768 104.1873 7 ADHYAKSA DHARMASATYA ADHYAKSA DHARMASATYA No Indonesia Kalimantan Tengah Kotawaringin Timur -1.588931 112.861883 8 ADITYA AGROINDO AGRINDO No Indonesia Kalimantan Barat Ketapang -0.476029 110.151418 9 ADOLINA PTPN IV No Indonesia Sumatera Utara Serdang Bedagai 3.568533 98.94805 10 ADONG MILL WOODMAN GROUP No Malaysia Sarawak Miri 4.541035 114.119098 11 AEK BATU WILMAR No Indonesia Sumatera Utara Labuhan Batu 1.850583 100.1457 12 AEK LOBA SOCFIN INDONESIA Yes Indonesia Sumatera Utara Asahan 2.651389 99.617778 13 AEK NABARA RAJA GARUDA MAS Yes Indonesia Sumatera Utara Labuhan Batu 1.999722222 99.93972222 14 AEK NABARA SELATAN PTPN III Yes Indonesia Sumatera Utara Labuhan Batu 2.058056 99.955278 15 AEK RASO PTPN III Yes Indonesia Sumatera Utara Labuhan Batu 1.703883 100.172217 16 AEK SIBIRONG MAJU INDO RAYA No Indonesia Sumatera Utara Tapanuli Selatan 1.409317 98.85825 17 AEK SIGALA-GALA
    [Show full text]
  • NDPE Policies Cover 83% of Palm Oil Refineries; Implementation at 72%
    NDPE Policies Cover 83% of Palm Oil Refineries; Implementation at 72% April 2020 Chain Reaction Research is a coalition Palm oil refiners are a strategic bottleneck in the global supply chain. Since of Aidenvironment, Profundo and Climate Advisers. 2014, the largest refiners have adopted No Deforestation, No Peat, No Exploitation (NDPE) policies, the strongest private instrument to cut the direct Contact: link between deforestation and palm oil. Refiners commit to NDPE policies that cover their own plantations and the plantations of their third-party suppliers. www.chainreactionresearch.com; This market mechanism functions best when the entire industry follows [email protected] commitments. However, non-cooperating refiners continue to leak unsustainable palm oil into the market. Authors: Albert ten Kate, Aidenvironment Key Findings: Barbara Kuepper, Profundo Matt Piotrowski, Climate Advisers • As of April 2020, NDPE policies cover 83 percent of palm oil refining With contributions from: capacity in Indonesia and Malaysia. In November 2017, this percentage Tim Steinweg, Aidenvironment stood at 74 percent. The increase is the result of six company groups with Gerard Rijk, Profundo large refining capacity adopting NDPE policies. • Because of weak implementation, effective NDPE coverage falls to 72 percent. Due to lagging transparency and grievance processes, three of the eleven largest refiners in Indonesia and Malaysia remain part of the leakage market. • The seven largest leakage refiners in Indonesia and Malaysia are FGV Holdings, Permata Hijau Group, Salim Group, BEST Group, Tunas Baru Lampung, Darmex Agro and the Wings Group. In India, the world’s largest importer of crude palm oil, there are three leakage refiners: Emami Agrotech, Patanjali Ayurved and Gokul Agro Resources.
    [Show full text]
  • RM New Entries 2016 Mar.Pdf
    International Plant Nutrition Institute Regional Office • Southeast Asia Date: March 31, 2016 Page: 1 of 88 New Entries to IPNI Library as References Roberts T. L. 2008. Improving Nutrient Use Efficiency. Turkish Journal of Agriculture and Forestry, 32:177-182. Reference ID: 21904 Notes: #21904e Abstract: Public interest and awareness of the need for improving nutrient use efficiency is great, but nutrient use efficiency is easily misunderstood. Four indices of nutrient use efficiency are reviewed and an example of different applications of the terminology show that the same data set might be used to calculate a fertilizer N efficiency of 21% or 100%. Fertilizer N recovery efficiencies from researcher managed experiments for major grain crops range from 46% to 65%, compared to on-farm N recovery efficiencies of 20% to 40%. Fertilizer use efficiency can be optimized by fertilizer best management practices that apply nutrients at the right rate, time, and place. The highest nutrient use efficiency always occurs at the lower parts of the yield response curve, where fertilizer inputs are lowest, but effectiveness of fertilizers in increasing crop yields and optimizing farmer profitability should not be sacrificed for the sake of efficiency alone. There must be a balance between optimal nutrient use efficiency and optimal crop productivity. Souza L. F. D.and D. H. Reinhardt. 2015. Pineapple. Pages 179-201 IPO. Reference ID: 21905 Notes: #21905e Abstract: Pineapple is one of the tropical fruits in greatest demand on the international market, with world production in 2004 of 16.1 million mt. Of this total, Asia produces 51% (8.2 million mt), with Thailand (12%) and the Philippines (11%) the two most productive countries.
    [Show full text]
  • Bumitama Agri Ltd. MEDIUM RISK
    INITIATING COVERAGE 15 October 2014 Bumitama Agri Ltd. MEDIUM RISK Oil palm plantation ISIN: SG2E67980267| SGX: P8Z | Bloomberg: BAL:SP BUMITAMA AGRI LTD. MEDIUM RISK Summary Warding off Sustainability Risk This Chain Reaction Research (CRR) report analyzes the financial risk profile of Bumitama Agri Ltd. (BAL:SP), a rapidly growing palm oil company. We looked at sustainability risks associated with the group’s 204,000 hectare (ha) land bank in Kalimantan, Indonesia – an area that the company identifies as available for plantation development. Detailed analysis of 16 of the group’s 18 plantation subsidiaries shows that Bumitama has been involved in significant deforestation, peatland development and legal irregularities since the group entered the plantation business in 1998. Continuation of such practices places the group at serious risk of losing its two major customers. Wilmar International and Golden Agri-Resources (GAR) together purchase approximately 90 percent of Bumitama’s palm oil supply. As of early 2014, both companies have adopted stringent sourcing policies that disqualify third-party suppliers who engage in deforestation, peat development and social exploitation. In the months since, Bumitama has taken several steps that may mitigate some of the worst risks. In this report, CRR reviews how Bumitama accumulated its sustainability risk profile over the years, and assesses the potential financial consequences should the group fail to duly address its sustainability risk exposure. An earlier version of this report was sent to Bumitama Agri for review, and this final report integrates information from its response. Contested Land Bank: 41% At the core of our Sustainability Risk Assessment (SRA) is an analysis of how much of a company’s land bank may be “contested land” – i.e.
    [Show full text]
  • PRINCIPLES and CRITERIA for Sustainable Palm Oil Production 2018
    RSPO Roundtable on Sustainable Palm Oil PRINCIPLES AND CRITERIA For Sustainable Palm Oil Production 2018 The Indonesia National Interpretation 1 Draft 1 – National Interpretation RSPO Principles & Criteria 2018 Preface Sustainable palm oil production comprises legal, economically viable, environmentally appropriate and socially beneficial management and operations. This is delivered through the application of the following set of Principles and Criteria ("P&C") herein and the accompanying Indicators and Guidance. The first set of RSPO P&C, Indicators and Guidance (RSPO P&C 2007) have been applied since November 2007. These had been subject to trial implementation from November 2005 to November 2007 and, in a number of countries, to a subsequent process of National Interpretation process (NI). After five years of application by RSPO members, RSPO P&C 2007 were reviewed in 2012-2013, leading to the RSPO P&C 2013. After a five years of application, RSPO P&C 2013 were reviewed and revised in 2017-2018 by the RSPO Principles and Criteria Review Task Force. The objective of each review and revision is to improve the relevance and effectiveness of the Principles and Criteria for RSPO members, and in achieving the shared vision and mission to make sustainable palm oil the norm. More specifically, this most recent revision sought to align the Principles and Criteria with the RSPO Theory of Change (ToC) and increase accessibility by making so these Principles and Criteria are more relevant and practical. The review process went beyond International Social and Environmental Accreditation and Labelling (ISEAL) best practices, including two public consultation periods of 60 days each, and with 17 physical consultation workshops in 10 countries around the world, as well as 6 physical Task Force meetings.
    [Show full text]
  • Buku Prospektus Astra Agro Lestari (Indonesia).Pdf
    PENAWARAN UMUM TERBATAS (PUT I) PT ASTRA AGRO LESTARI TBK KEPADA PARA PEMEGANG SAHAM PERSEROANDALAM RANGKA PENERBITAN HAK MEMESAN EFEK TERLEBIH DAHULU (HMETD) TAHUN 2016 HAK MEMESAN EFEK TERLEBIH DAHULU (HMETD) TAHUN PENERBITAN PEMEGANG SAHAM PERSEROANDALAM RANGKA PARA TBK KEPADA AGRO LESTARI ASTRA (PUT I) PT UMUM TERBATAS PENAWARAN JADWAL Tanggal Rapat Umum Pemegang Saham Luar Biasa (RUPSLB) : 11 April 2016 'LVWULEXVL6HUWL¿NDW%XNWL+0(7' : 10 Juni 2016 7DQJJDO3HUQ\DWDDQ3HQGDIWDUDQ+0(7'PHQMDGL(IHNWLI : 0HL 7DQJJDO3HQFDWDWDQ6DKDPGL%XUVD(IHN,QGRQHVLD : 13 Juni 2016 7DQJJDO7HUDNKLU3HQFDWDWDQ Recording Date XQWXNPHPSHUROHK+0(7' : 9 Juni 2016 3HULRGH3HUGDJDQJDQ+0(7' : 13 - 17 Juni 2016 7DQJJDO7HUDNKLU3HUGDJDQJDQ6DKDP'HQJDQ+0(7' &XP5LJKW 3HULRGH3HQGDIWDUDQ3HPED\DUDQGDQ3HODNVDQDDQ+0(7' : 13 - 17 Juni 2016 3DVDU5HJXOHUGDQ3DVDU1HJRVLDVL : 6 Juni 2016 3HULRGH3HQ\HUDKDQ6DKDP+DVLO3HODNVDQDDQ+0(7' : 15 - 21 Juni 2016 Pasar Tunai : 9 Juni 2016 7DQJJDO7HUDNKLU3HPED\DUDQ3HPHVDQDQ6DKDP7DPEDKDQ : 21 Juni 2016 7DQJJDO0XODL3HUGDJDQJDQ6DKDP7DQSD+0(7' ([5LJKW 7DQJJDO3HQMDWDKDQ : 22 Juni 2016 3DVDU5HJXOHUGDQ3DVDU1HJRVLDVL : 7 Juni 2016 7DQJJDO3HPEHOL6LDJD0HODNVDQDNDQ.HZDMLEDQQ\D : 23 Juni 2016 Pasar Tunai : 10 Juni 2016 Tanggal Pengembalian Uang Pemesanan : 24 Juni 2016 OTORITAS JASA KEUANGAN (“OJK”) TIDAK MEMBERIKAN PERNYATAAN MENYETUJUI ATAU TIDAK MENYETUJUI EFEK INI, TIDAK JUGA MENYATAKAN KEBENARAN ATAU KECUKUPAN ISI PROSPEKTUS INI. SETIAP PERNYATAAN YANG BERTENTANGAN DENGAN HAL-HAL TERSEBUT ADALAH PERBUATAN MELANGGAR HUKUM. PROSPEKTUS INI PENTING DAN PERLU
    [Show full text]
  • Stranded Assets in Palm Oil Production: a Case Study of Indonesia Working Paper July 2016
    Fall 08 Stranded Assets in Palm Oil Production: A Case Study of Indonesia Working Paper July 2016 Authors: Alexandra Morel | Rachel Friedman | Daniel J. Tulloch | Ben Caldecott About the Sustainable Finance Programme The Sustainable Finance Programme at the University of Oxford’s Smith School of Enterprise and the Environment was established in 2012 (originally as the Stranded Assets Programme) to understand how finance and investment intersects with the environment and sustainability. We seek to understand the requirements, challenges, and opportunities associated with a reallocation of capital towards investments aligned with global environmental sustainability. We seek to understand environment-related risk and opportunity, both in different sectors and systemically; how such factors are emerging and how they positively or negatively affect asset values; how such factors might be interrelated or correlated; their materiality (in terms of scale, impact, timing, and likelihood); who will be affected; and what affected groups can do to pre-emptively manage risk. We recognise that the production of high-quality research on environment-related factors is a necessary, though insufficient, condition for these factors to be successfully integrated into decision-making. Consequently, we also research the barriers that might prevent integration, whether in financial institutions, companies, governments, or regulators, and develop responses to address them. We also develop the data, analytics, frameworks, and models required to enable the integration
    [Show full text]
  • Sustainable Palm Oil
    ROUNDTABLE ON SUSTAINABLE PALM OIL IMPACT REPORT 2014 CONTENTS Welcome by RSPO Secretary General 02 Impact Report Highlights 04 Facts about palm oil 06 The Roundtable on Sustainable Palm Oil 10 Certified Sustainable Palm Oil 17 Measuring our impact 24 Partnering with leading experts 26 People 28 Better livelihoods 28 Protecting the rights of local communities 34 Planet 40 Protecting biodiversity 40 Reducing greenhouse gas (GHG) emissions 48 Soil and water 54 Profit 58 Improving yields for smallholders 58 Driving market transformation 68 References 74 Base data and notes 76 Glossary 79 01 RSPO IMPACT REPORT RSPO IMPACT Photo credit: New Britain Palm Oil Ltd Edited by Helikonia Design by Meta Fusion Pte Ltd WELCOME BY RSPO is a voluntary standard and in itself conjures the impression RSPO SECRETARY GENERAL that companies willingly commit to making the shift to responsible practices, steered by their own conscience and integrated into their business operations and mission. IMPACT REPORT PRESENTED BY DARREL WEBBER RSPO SECRETARY GENERAL When the RSPO was first established a decade ago – all it Herein –the significance in presenting, for the first time, We are pleased that despite the challenges we continue had to its name was a small group of enthusiastic pioneers the in-depth 2014 Impacts Report outlining the social; to be confronted with in the transformation to making envisioning to eradicate some of the world’s most intense environmental and economic progress of the RSPO to date sustainable palm oil the norm – the commitment by both dilemmas in the palm oil sector. These issues range from as a result of the commitment from all the players in the the private sector and civil society including governments deforestation, extinction of wildlife, unethical practices, sector, not precluding the collaboration received from has not abated - in fact as we witness in this report, it has opaque business operations and land conflicts, to name a few.
    [Show full text]
  • Neste's Renewable Raw Material Grievances July 2021
    No Target of grievance Relationship with Parent Company Grievance Status Direct Supplier Grievance Dashboard Neste Group of raiser/report/link (Direct/Indirect raw Grievance Target material sourcing/others) Neste's renewable raw material grievances (July 2021) 1 PT Tandan Sawita Not in SC, but part of Rajawali Group / https://www.mightyearth. [MONITORING] Our supplier, GAR internal monitoring had detected the deforestation https://www.goldenagri.com. Papua indirect supplier Eagle High org/wp- indication. sg/sustainability/responsible- parent company Plantations Tbk content/uploads/RR- sourcing/grievance-list-and-reports/ group from GAR Report- PT TSP carried out a site verification. It was verified that the land clearing was intended 34_final_vers_a_202106 for the expansion of the Yaumumi village area and was initiated by the village 30.pdf leadership without the knowledge/consent of PT TSP management as the community did not know that the area was controlled by PT TSP. See the verification report here https://bit.ly/3vjq24W Action taken/planned: - PT TSP has had a meeting with the community through the village leadership, and it was agreed that they would stop the expansion. - PT TSP has also notified the Arso Timur District Government and the Keerom Regency Government not to issue a permit to the village of Yaumumi because it overlaps with PT TSP's area. - The District Government will hold a meeting to inform community leaders about the boundaries of the PT TSP area. - In the area that has not yet been cleared, PT TSP will display signage declaring that the area is owned/controlled by PT TSP. 2 PT Gawi Makmur Direct supplier Wings Agro https://www.mightyearth.
    [Show full text]
  • IOI Corporation
    Chain Reaction Research 1320 19 th Street NW, Suite 400 IOI Corporation: RSPO suspension? Washington, DC 20036 United States RSPO Complaint Financially Material Website: www.chainreactionresearch.com Email: [email protected] Key Findings Authors: Annemieke Beekmans • RSPO Complaint Panel ruling on non-compliance expected soon Eric Wakker • RSPO’s formal rules require that IOI be suspended from selling CSPO if Scott Paul Gabriel Thoumi, CFA grievance is upheld in the Panel’s final ruling Jan Willem van Gelder • Several other buyers may suspend IOI independent from RSPO ruling Milena Levicharova • Any form of suspension would trigger further CSPO contract revaluation 1 Year Return Jan 2 , 2015 - Feb 8, 2016 Overview • IOI Corp. 1.93% • FTSE Bursa Malaysia KLCI Index -5.15% The RSPO Complaints Panel’s pending decision on IOI Corporation’s (IOI:MK) operations • Straits Times Index STI -22.17% • IDX Agriculture – 27.71% in Sarawak and West Kalimantan concerns illegal land grabbing, peatland clearing and • Jakarta Stock Exchange Composite Index drainage, loss of High Conservation Value (HCV) forests, and planting palm oil trees -9.04% illegally inside a forest reserve. RSPO’s certification procedures stipulate that such infractions may result in suspension of group membership. Should the Panel follow formal rules, IOI might experience a decrease in revenue from sales of its Certified Sustainable Palm Oil (CSPO) contracts, resulting in free cash flow contractions in a tight margin market. Over the past five years, IOI has struggled to convert consistent increases in CPO production into greater revenue and follow-on share price increases. With the 63 companies with significant agricultural exposure that trade on the Bursa Malaysia, Indonesia Stock Exchange, and Singapore Exchange underperforming regional indices in 2015, IOI is facing both sectoral downdrafts and a possible unfavourable RSPO suspension, potentially putting further downward pressure on their share price.
    [Show full text]