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FIGHTING FOR ECOLOGICAL JUSTICE

FIGHTING FOR ECOLOGICAL JUSTICE

Fighting for ecological justice

EU Companies’ Supply Chain Is Still Connected to Troubling Palm Oil Supplier in Indonesia

Andre Barahamin1 & Siobhan Pearce2

In response to the shooting case in Bangkal Village, Seruyan, Central Kalimantan of Indonesia, Kaoem Telapak together with EIA UK filed complaints against EU-based palm oil buying companies whose supply chains are connected to PT. HMBP which allegedly caused one Indigenous community member to be shot dead in a prolonged tenure conflict.

Indigenous Peoples Protested Against PT HMPB

Saturday, 7th October 2023, the tenurial conflict between the Indigenous Dayak Temu community and the Kuhin Dayak Indigenous community against PT Hamparan Masawit Bangkit Persada I (PT. HMBP) culminated in violence. Seruyan District Police joined by Central Kalimantan Regional Police are suspected of shooting using live bullets upon the Indigenous communities members of Bangkal Village, Seruyan Raya District, Seruyan Regency, Central Kalimantan Province who were protesting the palm oil company.

This incident resulted in one member of the Indigenous community being shot to death and two other people to be in critical condition.

The shooting was the culmination of a series of protests by the majority of the Dayak Temu and Dayak Kuhin of the Indigenous Peoples in Bangkal which have been going on since 16th September 2023, to demand their rights to be fulfilled by PT. HMBP, an oil palm plantation company, a subsidiary of the BEST Group.

Police Baricade

Responding to this, Kaoem Telapak together with the Environmental Investigation Agency (EIA) UK issued a statement condemning this act of violence, and asked various parties to make serious efforts to deal with this act of violence until it was resolved.

In addition to encouraging the efforts to resolve the conflict through the intervention of relevant state institutions such as the National Human Rights Commission (Komnas HAM) and the ISPO Committee, Kaoem Telapak and EIA are also aware of the obligation of the palm oil consumers through buyer companies or business entities to get involved in ensuring that such incidents will not be repeats itself. In particular, by addressing those who are directly found to have transactions with troubling palm oil plantation companies such as PT. HMBP and its group, BEST Group.

Kaoem Telapak and EIA found that there are three main EU-based buyer groups whose supply chains are connected to PT. HMBP and BEST Group, namely;

Barry Callebaut
Barry Callebaut is a Swiss-Belgian cocoa processing company and chocolate producer, with average annual production of 2.3 million tons of cocoa and chocolate (2021/2022 fiscal year). This group was formed in 1996 through the merger of a French chocolate company called Barry and a Belgian chocolate producer called Callebaut. Currently their head office is based in Zürich, Switzerland, and operates in more than 30 countries.

Louis Dreyfus Company (LDC)
Also known as the Louis-Dreyfus Group, is a French company operating in the fields of agriculture, food processing, international shipping, and finance. The company owns and manages hedge fund businesses, ships, develops and operates telecommunications infrastructure, and is also involved in the development, management and ownership of real estate. Together with Archer Daniels Midland, Bunge, and Cargill, the Louis-Dreyfus Group is one of four “ABCD” companies that control around 10% of world agricultural product trade flows. Louis Dreyfus Company is headquartered in Rotterdam, Netherlands, while its parent company, Louis Dreyfus Holding B.V., is headquartered at the World Trade Center in Amsterdam. Louis Dreyfus Company is present in more than 100 countries, with 72 offices. Their main offices are in Geneva, London, Beijing, Buenos Aires, Paris, São Paulo, Singapore, New York and Connecticut.

Upfield
Dutch food company that owns various brands of margarines and plant-based foods, including Flora and Blue Band. Upfield is the world’s largest plant-based consumer packaged goods company, operating in 95 countries and was once part of Unilever before being sold to an investment firm Kohlberg Kravis Roberts (KKR) in 2018 for US$8.04 billion.

Indigenous People and Police on the Field

Kaoem Telapak and EIA had contacted these companies and informed them about the shooting tragedy that occurred in Seruyan, Central Kalimantan, and requested their immediate action in regards to this matter. From the undertaken process, the answers obtained from each buyer were;

  1. Barry Callebaut said that PT. HMBP and Best Group are not yet fully part of their supply chain. Both the palm oil company and the group are still listed as potential suppliers and currently under an assessment process. The shooting tragedy in Seruyan will be an important input that will influence the assessment process and will most likely not proceed to formal cooperation.

  2. LDC has confirmed that Best Group is indeed in their supply chain, and has been assessed as one of the high risk palm oil suppliers. Currently, LDC is internally issued a temporary order to suspend their trading activities and purchases while continuing the process towards official sanctions which will soon be announced to the public.

  3. From Upfield, we got clarity that PT. HMBP is an indirect supplier through Best Group, whose status has currently been suspended. The internal investigation process is ongoing and will be known to the public as soon as possible.

 

From the process of submitting complaints carried out by Kaoem Telapak and EIA UK to each palm oil buying company connected to the troubling palm oil plantation and their parent company such as PT. HMBP and Best Group, the surprising fact is that the supply chain seems to deliberately ignore the fact that the conflict had been going on for a long time before the shooting tragedy took place.

The main question that has not been clarified by these three palm oil buyers we mentioned above is why troubling palm oil plantation companies, which have long violated the rights of IPLCs communities, are still listed – or under consideration to be included – in their supply chains.

PT HMBP and BEST Group are no stranger to controversy. In 2020, they filed a criminal complaint which resulted in the arrest of three community members who were accused of stealing palm oil fruit, regardless of the fact that the land had been declared illegally planted by PT HMBP by the District Major and the company was ordered to hand it over back to the community.

However, instead of returning the long demanded land to the community, the company actually criminalised it by arresting villagers on charges of theft of their crops. Two residents were sentenced to 8 and 10 months in prison respectively, while another died while in custody.

In 2016, PT HMBP was also mentioned by Amnesty International for allegedly using child labour, applying unreasonable working hours and not complying with minimum wage requirements. This report prompted palm oil buying companies, such as Wilmar and Unilever, to exclude PT. HMBP and BEST Group from their supply chains and sever all related economic cooperation.

Continuing to purchase from troubling palm oil companies such as PT HMBP also violating the European Union’s Deforestation-free Regulations (EUDR) which will come into effect on 30 December 2024. One of the main requirements of this regulation is the obligation to ensure that palm oil production placed on the European Union market must be produced legally.

Andre Barahamin is Senior Campaigner di Kaoem Telapak, Siobhan Pearce is Forest Campaigner di EIA UK.

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