Singapore Dialogue (update 1a): SIIA / Simon Tay dialogue in Singapore centered on palm oil sustainability, Indonesia extends moratorium, ASEAN banks under WWF spotlight

Yesterday, I attended the Singapore Dialogue run by Simon Tay's SIIA. Full day event on 13 May 2015 (but I couldn't stay on past 5pm as had to catch a flight) with well-rounded selection of speakers, mostly on palm oil, but also from a Kalimantan 100,000 ha carbon bank project (but not REDD+ carbon market, but seeking funding from Clinton Foundation, Google etc) and also some insights from the timber/pulp & paper sector (including swamp forest timber). Lots of interesting insights on how NGO and big corporate thinking on palm oil sustainability is evolving. More on this in due course. I also had a fascinating chat on a timber eucalyptus-rice paddy margin project with over 1.5 million trees planted and more to come.

Banks such as OCBC and HSBC also reported on their approach to sustainability - good data insights revealed by HSBC and TUK# also pointed out some of their latest data on banks role in funding the oil palm tycoons. WWF has report out on ASEAN banks (Singapore, Indonesia, Malaysia) financing of forestry-linked agro-industries - which financial institutions have policies or not.

Singapore is picking up the role as regional center to work on sustainability issues. Singapore stock exchange (SGX) also looking to setting up policy for compulsory sustainability reporting (policy due end 2015). A few years ago, it was noticeable Singapore started to bring in the big NGOs to have an office in the island state. Notable at past conference were big US NGOs flew in, and now I see they have presence in Singapore. The palm oil sustainability issue has also evolved from Europe centric (Europe NGOs) to presence of US NGOs too, some with ties to Europe (well, UK), example Forest Heroes / Catapult links with TFT to work on Indonesia Palm Oil Pledge (6 members and seeking 6 more) - UN New York Declaration. Singapore clearly seeking a meaningful role in the regional sustainability markets; so far it has the Transboundary Haze Bill, and Vivian Balakrishnan, Minister for Environment spoke vividly of opportunities for Singapore-based companies including timber verification technology and more.

For palm oil sustainability: interesting updates on sustainability policy views updates from Greenpeace Indonesia, Wilmar and insights from many more.

However, not all NGOs agree with the current approach with UN links to corporate approaches: UN bodies putting smallholders' livelihoods at risk; http://www.foodnavigator-asia.com/Policy/UN-bodies-putting-smallholders-livelihoods-at-risk

And some argue that peat technical issues need to be reviewed, rather than just jettisoning the peat zones without more scientific consideration: Sarawak to host 15th International Peat Congress 2016; /khorreports-palmoil/2015/05/sarawak-to-host-15th-international-peat.html

And it's not plain sailing for plantations who've gone in with the "second wave" of heightened "three nos" on peat, deforestation and exploitation. Sector risk is of a "third wave" of rather tough to resolve social issues, which may be heightened due to the HCS / high carbon stock regimes coming into play.

The Roundtable on Sustainable Palm Oil (RSPO) has prohibited Golden Agri-Resources (GAR), one of its most prominent members, from "acquiring or developing any new areas" pending the resolution of a formal complaint against the palm oil giant in Indonesia's West Kalimantan province.  The decision by the RSPO, the world's largest voluntary certification scheme for palm oil, is a stern directive from an organization that has been criticized for failing to take action against companies that flout its standards....  Read more: http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj<<a%20href=>">http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj

#TUK-Profundo report on top 25 tycoon-owned Indonesia palm oil groups and their financiers:http://www.tuk.or.id/2015/02/kuasa-taipan-kelapa-sawit-di-indonesia/  and English language data summary paper here, http://www.tuk.or.id/wp-content/uploads/2015/02/Tycoons-in-the-Indonesian-palm-oil-sector-140828-Tuk-Summary.pdf and screenshot of page 13 with Figure 10 Banks providing loans to tycoon-controlled groups, 2009-2013and Figure 11 Banks underwriting share and bond issuances of tycoon-controlled
groups, 2009-2013:

Links to financing of palm oil issues - key NGOs

WWF: ASEAN regional banks and investors behind on Environmental, Social and Governance standards Posted on 13 May 2015; Singapore – A WWF report finds an alarming gap between regional ASEAN financial institutions and the environmental, social and governance (ESG) standards adopted by their international counterparts.  Moreover, WWF reports a similar shortfall exists between regional financial regulations on responsible lending guidelines and corporate sustainability disclosure requirements as compared to their counterparts in Brazil, China, South Africa and Hong Kong. The report, released today at the Singapore Institute of International Affairs’s 2nd Singapore Dialogue on Sustainable World Resources, assesses to what degree regional capital providers are factoring sustainability issues into their lending and investment activities. It argues strongly for regional financiers to act in their own long-term interests and adopt ESG practices with urgency. It also calls for sustainable banking guidelines and more prescriptive sustainability disclosure requirements to be issued by regulatory authorities across ASEAN.


Responsible palm oil financing and investment - WWF has developed a practical handbook to help financial institutions develop and implement a responsible palm oil financing and investment policy.
Many of the environmental problems caused by oil palm plantations can be avoided through the application of best management practices.  However, in many cases there are incentives for palm oil production that lead to the conversion of natural habitats, and misguided investments that support environmentally destructive forest conversion. http://wwf.panda.org/what_we_do/footprint/agriculture/palm_oil/solutions/responsible_financing/

Financial institutions & palm oil - What are some of the major global financial institutions doing about palm oil sustainability issues? And what risks are they reducing in the process? Commercial banks are sharpening their palm oil and timber risk assessment policies plantations. Why? To avoid negative environmental and social impacts of their lending and investment activities. Some have developed written statements on palm oil.
Bank Palm oil policy: 
- Rabobank Stand-alone palm oil policy
- HSBC Part of broader Forest Land and Forest Products Sector Guideline
Financial institutions that have joined the RSPO: ANZ Banking Group Ltd, Co-operative Insurance Society, HSBC Bank Malaysia Berhad, HSBC Indonesia, International Finance Corporation, Rabobank

[Joint Statement] Briefing to banks and potential investors on the ongoing risks and outstanding social conflicts in the palm oil agribusiness sector. Briefing to banks and potential investors on the ongoing risks and outstanding social conflicts in the palm oil agribusiness sector: Golden Agri-Resources (GAR) bond offering... http://www.tuk.or.id/2015/04/joint-statement-briefing-to-banks-and-potential-investors-on-the-ongoing-risks-and-outstanding-social-conflicts-in-the-palm-oil-agribusiness-sector/?lang=en

Banktrack: http://www.banktrack.org/

Links on the moratorium and SIIA/ Simon Tay's Singapore Dialogue

Indonesia extends moratorium on forest, peatland licences Posted on May 13, 2015, Wednesday
SINGAPORE: Indonesia, through a Presidential Instruction, has extended the moratorium on new licences for the utilisation of primary forest and peatland, which expires today.
Its Deputy Minister for Environment Degradation Control and Climate Change, Ministry of Environment and Forestry, Arief Yuwono said the instruction would enable the forestry ecosystem to recover while allowing improvements to be made on its governance.
“The instruction is an instrument which will help the government to focus actions on preventive measures on forest fires, controlling the fires and improve on the law enforcement.
“I believe the enacted instruction that has been approved today for the next two years, can continue to help combat the forest fires and issues relating to it that is causing the haze,” he told reporters on the sidelines of the 2nd Singapore Dialogue on Sustainable World Resources here today.

Sustainability: A New Profit Driver?
Southeast Asia is one of the world’s largest producers of soft commodities including palm oil, rubber, and wood pulp. With Asia’s populations expected to soar, demands for these valuable resources are set to grow, leading to higher pressure on land use and climate change.
How can we cope with this explosive growth without jeopardising nature, public health and the way of life of some indigenous communities? How can we encourage more industry players – from plantation owners to processors and buyers – to address these concerns? What is the responsibility of those who trade and invest in these resources? Should governments in Asia pursue a bigger regulatory role collectively?
At the second Singapore Dialogue on Sustainable World Resources, the Singapore Institute of International Affairs will bring together leading voices from relevant stakeholders – including governmental and non-governmental organisations and companies- to present a business case for sustainable production, harvesting and financing. Centring on the mega market of Asia, the conference aims to feature the best practices in corporate sustainability, and foster more collaborations among forward-looking players.

Singapore approves anti-haze bill and Jokowi eyes drones to stop land misuse (update 2)

Khor Reports: While a study quoted in Nature.com debunks the view that palm oil plantations are the key culprit in Indonesia deforestation (blame fibre plantations!), Singapore passes its anti-haze bill. Jokowi, Indonesia's next president speaks of embarking on a more balanced development approach, to protect forests and challenge land misuse with the use of drones. The Jokowi-Jusuf Kalla manifesto has an interesting new approach laid out in it. This calls to mind the expanding efforts by Brazil to change its approach to rein in its rates of deforestation (read our blog posting on it here: /khorreports-palmoil/2014/07/how-brazil-clamped-down-on-deforestation.html)

Update 2 - adds on Malaysia planned usage of drones.

News links:

Singapore approves bill to fine companies that cause air pollution, Aug 5 — "Singapore’s parliament passed a bill today proposing fines for companies that cause haze pollution regardless of whether the companies operate on the island. Last year, Singapore suffered its worst haze on record, as smoke from forest clearing in neighbouring Indonesia shrouded the city. Some of the forest clearing was believed to have been done by plantation companies with Singapore connections. The bill will go to the president who will sign it into law.... Under the bill, companies found guilty of causing haze could be fined up to S$100,000 (RM255,837) for each day they pollute, with the maximum aggregate amount being S$2 million. They will also be subject to civil claims from parties who say they have suffered damage caused by haze.... The bill targets entities directly or indirectly involved in slash-and-burn, and grants use of circumstantial evidence to prosecutors, such as satellite images or maps from non-government organisations. Defendants will bear the onus to prove the evidence wrong.The law is designed to have extra-territorial reach, meaning it could be applied to culprits outside Singapore, though enforcement might be difficult.... Lawmakers hope overseas companies will comply to retain access to Southeast Asia’s banking and business hub. A number of palm oil and forestry companies are listed on the Singapore Exchange...." http://www.themalaymailonline.com/world/article/singapore-approves-bill-to-fine-companies-that-cause-air-pollution

Fibre production drives deforestation in Indonesia - Study debunks belief that palm-oil plantations are main culprit. by Natasha Gilbert 21 July 2014; "Palm-oil plantations are generally though to be the main driver of deforestation in Indonesia, which is home to the world’s third-largest tropical forest and has the highest rate of forest loss. But fibre plantations — where species such as Acacia mangium are grown for use in pulp and paper production — now seem to be the main culprit.... Of the 14.7 million hectares of forest destroyed between 2000 and 2010, 12.8% was removed for fibre plantations, 12.5% for logging and 6.8% for palm-oil plantations; the remainder was removed for mixed concessions and mining1. All told, 45% of forest loss during the period occurred on land leased to industry..." http://www.nature.com/news/fibre-production-drives-deforestation-in-indonesia-1.15589#%2Fb1.

Reference to Abood, S. A., Lee, J. S. H., Burivalova, Z., Garcia-Ulloa, J. & Koh, L. P. Conserv. Lett. http://dx.doi.org/10.1111/conl.12103 (2014): "We found that the four industries accounted for ~44.7% (~6.6 Mha) of forest loss in Kalimantan, Sumatra, Papua, Sulawesi, and Moluccas between 2000 and 2010. Fiber plantation and logging concessions accounted for the largest forest loss (~1.9 Mha and ~1.8 Mha, respectively). Although the oil palm industry is often highlighted as a major driver of deforestation, it was ranked third in terms of deforestation (~1 Mha), and second in terms of carbon dioxide emissions (~1,300 – 2,350 Mt CO2). Crucially, ~34.6% (~26.8 Mha) of Indonesia’s remaining forests is located within industrial concessions, the majority of which is found within logging concessions (~18.8 Mha). Hence, future development plans within Indonesia’s industrial sectors weigh heavily on the fate of Southeast Asia’s remaining forests and carbon stocks...."

Haze Fines Win Indonesia’s Support With Caveats: Southeast Asia, By Brian Leonal and Fitri Wulandari  Jul 30, 2014 12:55 PM GMT+0800; "Joko Widodo, the Jakarta governor known as Jokowi who won this month’s presidential election, agrees that companies implicated in unlawful fires may be fair game for Singapore’s enforcers. The sticking point is the sovereignty of Indonesia, where “incredibly prickly” officials have yet to join other ASEAN nations in signing a transboundary-haze pact, according to the Jakarta office of Control Risks Group. ... “We should have some detailed protocols to guarantee the sovereignty of Indonesia,” said Sonny Keraf, Indonesia’s environment minister from 1999-2001 and adviser to Jokowi. “But we do appreciate the commitment of the government in Singapore to penalize these companies’ activities,” he said in an interview this month.... Singapore’s new fines will require Indonesia to cooperate with gathering evidence in its territories, which may be seen as infringement, said Eugene Tan, an associate professor of law at Singapore Management University. The city would need “watertight” evidence to win in local courts, he said. By pursuing culprits in Indonesia, Singapore may risk retaliation, said Alan Khee-Jin Tan of the National University of Singapore Law School. “There is a likelihood of Indonesian lawmakers enacting retaliatory laws that target individuals or entities in Singapore for infringing Indonesian law,” Tan said. “That would be diplomatically messy.”.... Jokowi will push to extend the ASEAN pact beyond haze to include other environmental threats, Keraf said. Jokowi also plans to continue a moratorium on new permits to develop peatlands and primary forests. The ban, set to expire in 2015, was part of an agreement for $1 billion in aid from Norway.... The next president wants a network of drones to help monitor and stop land misuse across an archipelago of 17,000 islands that would stretch from New York to Alaska. “Drones are not only for the military but also for the economy, like for illegal logging,” Jokowi said in an interview on July 21...."

About drones usage: Ecologist Lian Pin Koh makes a persuasive case for using drones to protect the world's forests and wildlife. These lightweight autonomous flying vehicles can track animals in their natural habitat, monitor the health of rainforests, even combat crime by detecting poachers via thermal imaging. Added bonus? They're also entirely affordable. TEDGlobal 2013  ·  13:30  · Filmed Jun 2013; https://www.ted.com/talks/lian_pin_koh_a_drone_s_eye_view_of_conservation

Malaysia: Command centre to fight illegal deforestation; Updated: Wednesday August 6, 2014 MYT 7:47:17 AM; "A command centre, under the Natural Resources and Environment Ministry, will be set up to manage and patrol forest areas to deter unscrupulous people from clearing land here. “We will streamline and have a systematic approach to patrol the forest areas to try to catch and stop people from burning and cutting down trees,” ministry secretary-general Datuk Seri Zoal Azha Yusoff told the media yesterday.... “At the moment, we have 10 to 15 officers involved and they will be conducting the patrols,” he said, adding that unmanned aerial drones would be used to capture photographs of culprits in action. Palanivel said he would discuss with Agriculture and Agro-based Industry Minister Datuk Seri Ismail Sabri Yaakob on issuing temporary occupation licences (TOLs) to certain farmers to stop them from clearing new land. “We can’t evict them. Agriculture is important. But the farmers need to follow regulations,” said Palanivel, who is Cameron Highlands MP...."

Palm sustainability news

Fibre production drives deforestation in Indonesia - Study debunks belief that palm-oil plantations are main culprit by Natasha Gilbert, 21 July 2014; http://www.nature.com/news/fibre-production-drives-deforestation-in-indonesia-1.15589#%2Fb1; "....Palm-oil plantations are generally though to be the main driver of deforestation in Indonesia, which is home to the world’s third-largest tropical forest and has the highest rate of forest loss. But fibre plantations — where species such as Acacia mangium are grown for use in pulp and paper production — now seem to be the main culprit.
Of the 14.7 million hectares of forest destroyed between 2000 and 2010, 12.8% was removed for fibre plantations, 12.5% for logging and 6.8% for palm-oil plantations; the remainder was removed for mixed concessions and mining1. All told, 45% of forest loss during the period occurred on land leased to industry. “Palm-oil agriculture has borne the brunt of the blame for causing deforestation in Indonesia,” says Lian Pin Koh, a conservation ecologist at the University of Adelaide...."

The world’s largest palm oil players commit to funding High Carbon Stock Study, Kuala Lumpur, 30 July 2014 - "The world’s largest palm oil players are jointly funding a comprehensive 12-month study that will:
  • clearly define what constitutes a High Carbon Stock (HCS) forest;
  • provide practical guidance on how to delineate HCS forests on the ground; and
  • establish thresholds for HCS that take account of regional socio-economic conditions and opportunities.
Malaysian companies IOI Corporation Berhad, Kuala Lumpur Kepong Berhad and Sime Darby Plantation, Indonesia’s Asian Agri and Musim Mas Group, and global agribusiness groups Cargill and Wilmar International, are funding the study and have committed to adopt the study’s findings in all their operations and supply chains..... The HCS study is a key component of the Sustainable Palm Oil Manifesto, which was signed by oil palm growers Sime Darby Plantation, IOI Corporation Berhad, Kuala Lumpur Kepong Berhad, Musim Mas Group, and Asian Agri, as well as global palm oil trader Apical and global agribusiness group Cargill. The Manifesto includes a commitment to no deforestation, creating traceable and transparent supply chains, and protecting peat areas, while ensuring economic and social benefits for the local people and communities where oil palm is grown.... To oversee this Study, a Steering Committee has been set up, independently co-chaired by Sir Jonathon Porritt, and Chief Research Scientist from Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO), Dr John Raison......"

Some critique of the Manifesto group here by RAN:

Palm oil productions threatens African apes by Maanvi Singh · NPR ·  Jul 11, 2014; http://www.mprnews.org/story/2014/07/12/palm-oil-productions-threatens-african-apes; ".....Now it seems palm oil production in Africa is picking up, too. And the new farms there are threatening great ape populations in West and Central Africa, according to a study published Thursday in the journal Current Biology.... "Africa seems to be the new frontier," says Serge Wich, a primate biologist at Liverpool John Moores University and the lead author of the report. Sixty percent of African oil palm concessions — or land that's been set aside for the development of oil plantations — overlaps with the ape habitats...."

Will other Asian consumer giants follow as Kao goes forest-friendly? GreenpeaceGreenpeace challenges Asian consumer companies such as India’s Godrej and ITC and China’s Liby and Nice to make similar commitments as the Japanese beauty products maker commits to forest-friendly policy; http://www.eco-business.com/news/will-other-asian-consumer-giants-follow-kao-goes-forest-friendly/

Australia resource industries seek ban of market boycotts (update 1)

3 May 2014:

Ben & Jerry's referred to consumer watchdog over save-the-reef campaign; theguardian.com, Friday 2 May 2014 06.58 BST; http://www.theguardian.com/environment/2014/may/02/ben-jerrys-referred-to-consumer-watchdog-over-save-the-reef-campaign; Ice-cream company’s ‘mistruths could cost jobs’, says Queensland LNP senator elect who has written to the ACCC; "Queensland LNP senator elect Matthew Canavan said he wrote to the Australian Competition and Consumer Commission (ACCC) on Tuesday to consider the company’s conduct... “Australia has strict laws to protect consumers against misleading and deceptive behaviour,” he said. “These mistruths could cost jobs and development in regional Queensland. It’s irresponsible behaviour from a company that should know better.”.. The Queensland premier Campbell Newman also said on Thursday: “The World Wildlife Fund can make such false assertions, so be it. But a company is bound by consumer law and can’t make false and misleading statements and they are making false and misleading statements when it comes to this.”...

3 April 2014

Australian government may ban environmental boycotts; Guardian Australia: Parliamentary secretary says there is 'an appetite' for removing environmental groups' exemption from secondary boycotts ban; Thursday 3 April 2014; http://www.theguardian.com/environment/2014/apr/02/coalition-review-of-consumer-laws-may-ban-environmental-boycotts: "Coalition MPs and industry groups are using a review of competition laws to push for a ban on campaigns against companies on the grounds that they are selling products that damage the environment, for example by using old-growth timber or overfished seafood....  Groups including the Australian Forest Products Association and parts of the seafood industry are also preparing submissions to the review arguing that environmental campaigns against companies selling products made from native timbers or “unsustainable” fishing amount to a “secondary boycott” and should be unlawful....  But the new state Liberal government intends to undo the forest “peace deal”, expand sawlog production and stop environmental campaigns through tough new state laws aimed at protesters. It is also lobbying the federal government for a change to competition laws to stop market-based campaigns.... Colbeck said he would be suggesting a further change to competition law to increase the power of the Australian Competition and Consumer Commission to police general claims made by environmental groups about particular types of products “to ensure that they are truthful”.... “They can say what they like, they can campaign about what they like, they can have a point of view, but they should not be able to run a specific business-focused or market-focused campaign, and they should not be able to say things that are not true,” he said.... Groups like GetUp! and Markets for Change are currently exempt from section 45D of the Consumer and Competition Act which prohibits actions that stop a third person buying goods from another....

Tasmanian forests set for logging as Liberals push ahead with repeal; State government unveils plan to tear up historic deal between industry and greens protecting 400,000 hectares of forest; Australian Associated Press; theguardian.com, Tuesday 8 April 2014; http://www.theguardian.com/environment/2014/apr/08/tasmanian-forests-logging-liberals-repeal

Khor Reports comment: Interesting to see a possible push back from Australia industry, state and federal government over market boycott campaigns by domestic NGOs. In contrast, palm oil has been facing significant market campaigns, but at a transnational level. Actions have been taken by palm oil producers in the French trade tribunal, for instance, but negative market actions continued and the number of products affected continued to rise. Also interesting that this is the second time in as many months that we read of a competition act possibly used in relation to the sustainability issue.