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.

http://wwf.panda.org/wwf_news/?246790

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
http://wwf.panda.org/what_we_do/footprint/agriculture/palm_oil/solutions/responsible_financing/finance_palm_oil/

[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.
http://www.theborneopost.com/2015/05/13/indonesia-extends-moratorium-on-forest-peatland-licences/

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.
http://sustainableresourcesdialogue.org/

Eye on Brazil: 5 million hectares of sustainable Amazon oil palm eyed, China $150 billion infra spend plan for Brazil, Petrobras' political corruption scandal

I was talking yesterday to Nicholas (Khor Reports research assistant) about Brazil oil palm. So since we've not really covered this here, I've gathered a few links below. It is fascinating to see China's infrastructure investment plans for Brazil to lower cost of bringing its product to market. That has been quite the bane of agriculture producers in Brazil interior. Brazil has identified a maximum 5 million hectares for oil palm, mostly for biodiesel purposes (imagine the cost savings of not having to transport diesel inland). How is this proceeding?

Also to note a key project is by Petrobras-Vale and the former is mired in a massive political corruption problems:
 

.............
China - Brazil $50 billion infrastructure investment plan

China to invest $50 billion in Brazilian infrastructure AFP By Damian Wroclavsky May 14, 2015 7:27 PM; Brasília (AFP) - China will invest $50 billion to help overhaul Brazil's aging infrastructure, Brasilia said Thursday, ahead of an official visit by Chinese Prime Minister Li Keqiang. "There are $50 billion in new projects," said Jose Graca Lima, Brazil's undersecretary of state, who oversees Asia and Oceania. "We shall have to await the end of the visit to expand upon which projects," he said, without providing details. Battling a fifth straight year of poor growth and mired in a bruising graft scandal involving state oil giant Petrobras, Brazil is seeking to revamp its sagging infrastructure ahead of next year's Rio Olympics, the first Games to be held in South America. A Brazilian government source said Brazil, Latin America's biggest economy, was determined to overhaul its dilapidated roads, railways, airports and ports ahead of the Olympics. The Chinese cash infusion is set to cover various sectors, including transport and energy. http://news.yahoo.com/china-invest-50-billion-brazil-212318218.html

China's ICBC, Brazil's Caixa to start $50 billion fund -sources Wed May 13, 2015 5:43pm EDT BRASILIA; May 13 Caixa Econômica Federal, Brazil's top mortgage lender, and the Industrial and Commercial Bank of China Ltd (ICBC) will create a $50 billion fund for Brazilian infrastructure investments, two government sources with knowledge of the plans said on Wednesday. The fund will be financed entirely by the ICBC, but both banks need to set up the regulatory framework to decide on the projects, said the Brazilian sources, who requested anonymity because the plan remains private. The plan will be formally announced when Chinese Premier Li Keqiang visits Brazil next week, they added. Caixa and ICBC will sign a memorandum of understanding during Li's visit in which the main terms for the fund will be outlined, the sources said. The governments agreed the fund will finance a railway link from Brazil's Atlantic coast to the Pacific Ocean in Peru as a way to reduce the cost of exports to China, said one of the sources. The fund will also finance a joint-venture to produce steel in Brazil. In January, Chinese President Xi Jinping pledged $250 billion in investment in Latin America over the next 10 years as part of a drive to boost resource-hungry China's influence in a region long dominated by the United States. Last year, China and Brazil agreed $7.5 billion in financing for Brazilian miner Vale SA, and the purchase of 60 passenger jets from planemaker Embraer SA. http://www.reuters.com/article/2015/05/13/caixa-ec-federal-icbc-fund-idUSL1N0Y41C020150513
..................

News links on Brazil oil palm topics

Oil palm set to take over from cattle ranching as the biggest threat to Brazil’s Amazon rainforest?  By Chris Lang 10 November 2014  Despite the reduction in deforestation in Brazil over the past decade, “the deforestation problem is far from solved”, notes Datu Research in a recent report about the beef industry and deforestation in Brazil. Datu describes the most effective tactic in reducing deforestation as “pressure from Western companies that demand deforestation-free supply chains”.  Demand for Brazilian beef is increasing. In August 2014, Russia announced a suspension of beef imports from several countries, including the USA, Australia, and the EU. Even before that announcement, demand was increasing. The Brazilian Beef Exporting Association reports that beef exports increased by more than 10% in the first eight months of 2014.  Datu argues that with the expansion of palm oil and other commodities, “it will become increasingly difficult to attribute deforestation to a specific commodity, making commodity-by-commodity enforcement methods less effective”. Instead, Datu and the Environmental Defense Fund (which paid for the report) suggest complementing deforestation-free supply chains with “enforcement and certification mechanisms focused not by commodity, but by jurisdiction”........ Datu is promoting a “zero net deforestation” approach, where forest can be cleared in some areas, “as long as other areas are sufficiently reforested to maintain net carbon density”. This raises the risk that biodiverse forests could be cleared, and “offset” by monocultures of fast-growing eucalyptus plantations.  Or even oil palm. Datu notes that the Brazilian government sees palm oil as a win-win opportunity: green fuel, green jobs, and a carbon sink “ideal for reforesting lost segments of the Amazon”. The report notes that REDD “has not yet been implemented at sufficient scale to have significant impact”. But with the jurisdiction approach, Datu writes that “the stage would be set” for REDD, “giving producers economic incentives”. In other words, payments from the sale of carbon credits that would allow greenhouse gas emissions to continue elsewhere.... http://www.redd-monitor.org/2014/11/10/oil-palm-set-to-take-over-from-cattle-ranching-as-the-biggest-threat-to-brazils-amazon-rainforest/

Oil Palm Changes Rural Culture in Brazilian Amazon By Fabiana Frayssinet; CONCORDIA DE PARÁ/MOJÚ/ACARÁ, Brazil , Nov 20 2013 (IPS) - Thousands of small farming families in Pará, in the Amazon jungle in northeast Brazil, have turned to the African oil palm as a new source of income, through contracts with biofuel companies. Strange bedfellows, which poses cultural and economic challenges. The small farm of Antônio de Oliveira smells like a mixture of oranges, black pepper and achiote or annatto (Bixa orellana), a shrub whose fruit is harvested for its seeds, which contain a natural dye that has coloured his farm red. “I didn’t know anything about oil palm…it’s really different to work with, it’s a queer bird, and complicated,” said Oliveira, who signed a contract with the biofuel company Biopalma three years ago to plant African oil palm (Elaeis guineensis), known as “dendê” in Brazil. Biopalma belongs to the Vale mining company, and has 60,000 hectares of oil palm of its own. In addition, it buys the output of small farmers through its Family Agriculture programme. The company plans to use palm oil to produce biodiesel to run the machinery and vehicles at its mines..... http://www.ipsnews.net/2013/11/oil-palm-changes-rural-culture-in-brazilian-amazon/

Petrobras, Vale May Join to Make Brazil Palm Oil and Biodiesel 'By'Stephan Nielsen 2:32 AM HKT  August 15, 2012 Aug. 14 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, and Vale SA are discussing a partnership to produce palm oil and biodiesel in the northern state of Para. Both companies are currently developing separate biodiesel projects in the state, Rio de Janeiro-based Petrobras said today in a statement. Petrobras’s biofuels unit said it will build a 230 million-liter (60.7 million-gallon) a year biodiesel facility in Para in its five-year plan for 2012-16, according to the statement. Vale plans to produce biodiesel from the palm oil in the region and mix it with regular diesel to fuel its Brazil operations from 2015, Petrobras said. http://www.bloomberg.com/news/articles/2012-08-14/petrobras-vale-may-join-to-make-brazil-palm-oil-and-biodiesel

Brazilian mining giant buys Amazon palm oil company  mongabay.com  February 03, 2011; Vale, a Brazilian mining giant, will buy palm oil producer Biopalma da Amazonia SA Reflorestamento Industria & Comercio, reports Bloomberg.  The deal, valued at $173.5 million, will enable the mining company to run more of its operations on palm oil biodiesel.  Vale began its palm oil push in 2009 when it formed a partnership with Biopalma. At the time Vale said the deal would save $150 million in fuel costs starting in 2014, with palm oil biodiesel replacing up to 20 percent of diesel consumption in the company's northern operations.  Biopalma has six oil palm plantations covering 18,400 hectares (45,467 acres) in Para, according to Vale. The company expects this to expand to 60,000 ha in 2013. The announcement comes less than a year after Brazil laid out plans to dramatically expand palm oil production in the Amazon. The initiative, called the Program for Sustainable Production of Palm Oil (O Programa de Produção Sustentável de Óleo de Palma), will provide $60 million to promote cultivation of oil palm in abandoned and degraded agricultural areas, including long-ago deforested lands used for sugar cane and pasture. ... http://news.mongabay.com/2011/0202-vale_biopalma.html

Brazil launches major push for sustainable palm oil in the Amazon by Rhett A. Butler, mongabay.com  May 07, 2010 "Sustainable" palm oil effort may pressure Malaysia and Indonesia on environmental performance of widely used vegetable oil. Brazilian President Lula da Silva on Thursday laid out plans to expand palm oil production in the Amazon while minimizing risk to Earth's largest rainforest, reports Globo and Terra Brasil. The plan, called the Program for Sustainable Production of Palm Oil (O Programa de Produção Sustentável de Óleo de Palma), will provide $60 million to promote cultivation of oil palm in abandoned and degraded agricultural areas, including long-ago deforested lands used for sugar cane and pasture. Brazilian officials claim up to 50 million hectares of such land exist in the country.... Although Embrapa, Brazil's agricultural research agency, has identified some 29 million hectares (71.6 million acres) of land suitable for oil palm cultivation in the Amazon and 2.8 m ha (6.9 m acres) outside the region — an area that would dwarf the 13 m ha of oil palm currently cultivated worldwide — Brazil says it will strictly limit development to less than 5 million hectares. The program specifically prohibits expansion at the expense of native forests, a major concern among environmental groups that have watched the relentless conversion of tropical forests across Malaysia and Indonesia for oil palm over the past 25 years. The palm oil program marks a new focus for Brazil, which currently produces about 110,000 metric tons of crude palm oil per year, a fraction of the amount produced by market leaders Indonesia (16.9 million metric tons in 2008) and Malaysia (15.8 m tons), according to the FAO. But Brazilian growers could see a boost in the international market if they can cost-effectively produce palm oil without driving direct or indirect deforestation, a concern that has dogged Malaysian and Indonesian producers. Brazil says it will rely on its world-class satellite monitoring system to ensure that expansion does not cause deforestation.  Read more at http://news.mongabay.com/2010/0507-amazon_palm_oil.html#Ap41ACGGl564lQL5.99


Trade policy on palm oil: Fratini Vergano- WTO Environmental Goods Agreement does not include "green by definition, such as commodities...'; WHO Interim Report on Ending Childhood Obesity calls for taxes and marketing restrictions to tackle child obesity


Subject: Trade Perspectives by FratiniVergano - European Lawyers Date: 3 Apr 2015 02:54
Issue No. 7 of 2 April 2015
*             The Environmental Goods Agreement negotiations continue to progress despite the lack of participation by key countries
*             Trade facilitation developments to take place at the multilateral and regional levels by the end of 2015
*             WHO Interim Report on Ending Childhood Obesity calls for taxes and marketing restrictions to tackle child obesity
*             Recently Adopted EU Legislation

The Environmental Goods Agreement negotiations continue to progress despite the lack of participation by key countries; During the week of 16 March 2015, representatives from the 17 WTO Members that are currently taking part in the negotiations for an Environmental Goods Agreement (hereinafter, EGA), gathered in Geneva to participate in the fifth round of negotiations. These negotiations are directed to the conclusion of a new plurilateral agreement aimed at promoting green growth and sustainable development by liberalising trade in environmental goods..... EGA negotiations intend to build on the efforts made in the context of the Asia-Pacific Economic Cooperation (hereinafter, APEC), where, already back in 2012, its 21 Member Economies agreed on a list of 54 environmental goods for which they would reduce import tariffs to 5 percent ad valorem or less by 2015. The APEC list focusses on machinery and electronic products used for environmental protection (such as parts and components of various ‘green’ manufacturing items, products related to waste processing or disposal, and instruments for testing and analysing samples) and is based on 6-digit level HS codes (see Trade Perspectives Issue No. 14 of 11 July 2014). Apart from its limited coverage, the APEC list appears to be of limited accuracy, to the extent that it includes machinery and high-tech goods that, although designed for environment-friendly uses, may not necessarily be the result of an environment-friendly production process. In order to ensure that the list of covered products under the EGA does not suffer from the same shortcomings as the APEC list, it appears necessary that additional criteria (possibly relating to the very products’ sustainability) be established.........The EGA will apply on a most-favoured nation (i.e., MFN) basis, meaning that all WTO Members (including those which did not participate to the negotiating process) will benefit from the agreed tariff reductions once a ‘critical mass’ of WTO Members has agreed to participate. Negotiations were triggered in July 2014 by 14 WTO Members (i.e., Australia, Canada, China, Chinese Taipei, Costa Rica, the EU, Hong Kong China, Japan, New Zealand, Norway, Republic of Korea, Singapore, Switzerland and the US). As of March 2015, 3 more WTO Members (i.e., Iceland, Israel and Turkey) have joined the negotiations, and are, therefore, in a position to drive the process.
The fifth negotiating round reportedly concluded with a compilation of the proposals put forward by most EGA participants on the products that should benefit from duty-relief. In total, countries have proposed that the EGA cover around 600 tariff lines, divided into a number of categories (relating to, inter alia, air pollution control, waste management, environmental remediation and clean-up, noise and vibration abatement, cleaner renewable energy, energy efficiency and environment monitoring assessment). In practice, these categories include goods as diverse as bicycles, windmills, solar panels, LED monitors, hydro-electric generating equipment, isolation material, water treatment chemicals, and advanced products for waste management and air pollution mitigation. Against this background, it is, at the very least, surprising that the proposed goods do not include goods that are ‘green’ by definition, such as commodities (e.g., palm oil, soybeans, sugarcane and rapeseed) that are available in nature and which can be used, inter alia, for renewable energy production (such as biofuels, which provide for substantial emission reductions when compared to fossil fuels)...........

WHO Interim Report on Ending Childhood Obesity calls for taxes and marketing restrictions to tackle child obesity; In March 2015, the World Health Organisation (hereinafter, WHO) released an Interim Report through its Commission on Ending Childhood Obesity, which calls for taxation and restricted marketing of ‘unhealthy’ foods and drinks to children, in order to help cut childhood obesity. The purview of ‘unhealthy’ foods includes foods that are high in saturated fats, trans fats and salt, as well as sugar-sweetened non-alcoholic beverages and energy-dense, nutrient-poor foods. The WHO Report outlines potential policy options that governments could consider through fiscal policies (such as taxes to reduce the intake of ‘unhealthy’ foods and sugar-sweetened non-alcoholic beverages), the increased intake of healthy foods, and the promotion of physical activity in children and adolescents. The WHO Report further indicates that governments could also take action to implement restrictions on the marketing of ‘unhealthy’ foods to children and adolescents.
According to the WHO Report, addressing childhood obesity requires attention to both developmental (i.e., life-course) and environmental considerations. With respect to the latter, important factors include exposure to inappropriate infant and young child feeding, and the influence of the marketing of ‘unhealthy’ foods directly to children. The WHO considers that no single intervention can halt the rise of the growing obesity epidemic. Therefore, actions that address both the so-called ‘obesogenic’ environment and developmental factors are required.........

The Corporate Capture of Sustainable Development by Leslie Sklair

Why sustainability doesn't really work?

The Transnational Capitalist Class and the Discourse of Globalization By Leslie Sklair Cambridge Review of International Affairs 2000;

The Corporate Capture of Sustainable Development......Thus, the negative environmentalism that had forced industries to respond to specific challenges on pollution and toxic hazards gave way to more general conceptions of ˜sustainable growth' and ˜sustainable development', entirely compatible concepts in the corporate analysis. Corporate environmentalism, therefore, both as a social movement and as a discourse, co-existed easily with this moderate conception of sustainability. From this powerful conceptual base big business successfully recruited much of the global environmental movement in the 1990s to the cause of sustainable global consumerist capitalism. This achievement is an object lesson in how dominant classes incorporate potential enemies into what Gramsci called new historical blocs.... The sustainable development historical bloc began in earnest in the period leading up to the Earth Summit in Rio in 1992. The close relationship between Maurice Strong, the virtual CEO of the Earth Summit, and Stephan Schmidheiny is a matter of public record. The environmental arm of the ICC, the Business Council for Sustainable Development, represented big business in Rio and was successful in keeping any potential criticism of the TNCs off the official agenda. There was, as a consequence, formidable corporate input into the formation of the UN Commission on Sustainable Development (CSD), the major institutional result of UNCED..........Sustainable consumption and production are essentially two sides of the same coin. Sustainable consumption addresses the demand side, examining how the goods and services required to meet peoples' needs and improve the quality of life, can be delivered in a way that reduces the burden on the Earth's carrying capacity. The emphasis of sustainable production is on the supply side, focussing on improving environmental performance in key economic sectors such as agriculture, energy, industry, tourism and transport........From the ecological point of view this approach is based on a series of fallacies. The first is the anthropocentric approach itself, where sustainability for people and societies takes precedence over sustainability for the planet. The second fallacy is the idea that 'sustainable consumption' and 'sustainable production' are essentially two sides of the same coin, For ecologists, the real issue is not 'sustaining' production and consumption, but reducing them absolutely....The combination of the discourse of sustainable development with that of national and international competitiveness provides powerful weapons for the transnational capitalist class. Globalization is not a 'Western' but a globalizing capitalist ideology, whose discourse and practices are necessary to negate the growing class polarization and ecological crises characteristic of this latest stage in the long history of capitalism.... https://www.globalpolicy.org/globalization/defining-globalization/27656-the-transnational-capitalist-class-and-the-discourse-of-globalization.html

The Transnational Capitalist Class by Leslie Sklair ISBN: 978-0-631-22462-4 352 pages October 2000, Wiley-Blackwell; Description: The Transnational Capitalist Class provides theoretically informed empirical research to explain the process of globalization from the viewpoint of the corporations themselves. Through personal interviews with executives and managers from over eighty Fortune Global 500 corporations, Sklair demonstrates how globalization works from the perspective of those who control and oppose the major globalizing corporations and their allies in government and the media. Sklair's unique approach brings a fresh perspective to what has become a key debate of our time
http://as.wiley.com/WileyCDA/WileyTitle/productCd-0631224629,subjectCd-GE2B.html

Democracy and the Transnational Capitalist Class By LESLIE SKLAIR, ANNALS, AAPSS, 581, May 2002; ABSTRACT: While globalization means many different things to
many different people, there is growing consensus that capitalist globalization is its most powerful contemporary form. This article argues that capitalist globalization, and thus effective power in the global system, is increasingly in the hands of a transnational capitalist class (TCC) comprising four fractions: those who own and control the major corporations and their local affiliates, globalizing bureaucrats and politicians, globalizing professionals, and consumerist elites. The TCC engages in a variety of activities that take place at all levels, including community, urban, national, and global politics, and involve many different groups of actors. Two sets of questions are addressed: (1) What forms do these activities take? and (2) Do they enhance or undermine democracy? The role of the TCC is analyzed through brief case studies on Codex Alimentarius and the global tobacco industry.... http://www.uni-muenster.de/PeaCon/global-texte/r-m/144sklair.pdf

Indonesia policy & regulations (update 7): The Indonesian National Carbon Accounting System (INCAS); mood for provincial autonomy grows in PNG ; RSPO-Guardian - Local and national interests clash in Indonesia's palm oil industry, "bupatis... take decision in best interest of (Singapore or Jakarta) companies.. rather than communities... there is low level oppressions and sometimes violence...it’s a simmering human rights issue" says EIA and “There are rogue operators who are playing the corruption game with the local authorities.... A big problem is the overlapping land rights, which causes a lot of conflict... there is an increasingly wealthy middle class who see land as an investment for the future..." says CIFOR

26 April 2015: The Indonesian National Carbon Accounting System (INCAS); mood for provincial autonomy grows in PNG

Indonesia has a new tool against climate change  13 Apr 2015 BY Center for International Forestry Research; JAKARTA, Indonesia—It has one of the world’s largest forest estates …. and one of the highest rates of deforestation and degradation. The government of Indonesia has a serious target: reducing greenhouse gas (GHG) emissions by 26 percent by 2020, and – if international assistance is forthcoming – by 41 percent during that same period. To assist in that aim, a monitoring system to track the country’s GHG emissions has been developed by the Indonesian government.
The Indonesian National Carbon Accounting System (INCAS) will serve as the basis for the country’s measurement, reporting, and verification (MRV) system for the land sector.
MRV is required under the UN Framework Convention on Climate Change  (UNFCC).
The Minister of Environment and Forestry, Siti Nurbaya formally endorsed INCAS, at a recent public seminar in Jakarta. .........INCAS uses a Tier 3 approach for forestland that includes a carbon mass balance model, and a Tier 2 type approach for peatlands. Both tiers use nationally specific data.... "The INCAS is an open, transparent, and continually improving framework, which is designed to incorporate new data, and technology as it becomes available,” says Harvey. ........Central Kalimantan province was the first to demonstrate the use of INCAS before it extends nationally. The data – gathered between 2000 and 2011 – showed significant annual variations in GHG emissions and removals in Central Kalimantan, which are indicative of issues around historical land management, current practices, and weather patterns – like dry years and high incidents of fire. The year with greatest GHG emissions was 2006 with 195 million t CO2 –e. The lowest year was 2010 with 74 million t CO2 -e. Biological oxidation of peatlands was generally the largest single source of emissions, although peat fires in 2006 and 2009 greatly contributed to the elevated emissions in those years.......The interim results are the first time that a GHG emissions profile has been broken down into its “constituent elements of forest carbon stock change, non-CO2 emissions from biomass burning, CO2 and non-CO2 emissions from mineral soil, as well as biological oxidation and direct N2 O, dissolved organic carbon and CH4 emissions from disturbed peat, and CO2 and non-CO2 emissions from peat fire”.....http://blog.cifor.org/27790/indonesia-has-a-new-tool-against-climate-change#.VTxfAp2wpD8

Mood for provincial autonomy grows in PNG by Johnny Blades, Radio New Zealand International - johnny.blades@radionz.co.nz Updated at 1:06 pm on 20 April 2015;  While the call for more devolution of powers from central government to the provinces is not new, PNG's continued development struggles mean more provinces are talking about autonomy. And throwing a cat among the pigeons, PNG's opposition leader has now proposed the idea that PNG's four main regions could be given autonomy The growing skyline of the capital Port Moresby reflects PNG's unprecedented economic growth of the past decade. It's been forged mainly through a boom in the mining, oil and gas sectors. But the majority of people in the country have seen few tangible benefits, and PNG is languishing near the bottom in the United Nations Human Development Index world rankings.
The governor of New Ireland province claimed that PNG risks breaking up if it continued with the inefficiency of central government machinery. Sir Julius Chan, who is a former Prime Minister, said Waigani takes 90% of provincial revenues yet had failed to adequately manage basic service delivery to provinces......... "Everything comes from Port Moresby and Port Moresby is the worst, most inefficient organisation in PNG today," he said. "If we continue to allow a very disorganised group or people running the rest of the country, it's sure to break up."...... Sir Julius said the time is right for provinces to take on more powers of taxation, over natural resources, education, health and other sectors. This feeling was echoed at a recent summit of PNG's 22 provincial governors, many of whom were frustrated at the lack of control their administratrions have over development in their provinces....... Meanwhile, the autonomous Bougainville government has started laying the groundwork for a referendum to be held on possible independence from PNG. As provided for in the peace agreement negotiated after the Bougainville civil war, that vote has to occur by 2020 at the latest. As the former president of the autonomous Bougainville government James Tanis explained, this lead-up was a key focus for the new parliament to be elected next month........ To date, PNG's national government has shown little appetite for granting more autonomy to the provinces. However, increased discussion about the issue among the nation's leaders shows that momentum is gathering for change on this front.,,,,,http://www.radionz.co.nz/international/pacific-news/271640/mood-for-provincial-autonomy-grows-in-png

24 April 2015: RSPO-Guardian - Local and national interests clash in Indonesia's palm oil industry, "bupatis... take decision in best interest of (Singapore or Jakarta) companies.. rather than communities... there is low level oppressions and sometimes violence...it’s a simmering human rights issue" says EIA and “There are rogue operators who are playing the corruption game with the local authorities.... A big problem is the overlapping land rights, which causes a lot of conflict... there is an increasingly wealthy middle class who see land as an investment for the future..." says CIFOR

Local and national interests clash in Indonesia's palm oil industry - Political unrest intensifies as largely autonomous district authorities put the interests of palm oil developers and investors first
Sponsored by: RSPO, by Oliver Milman @olliemilman Thursday 23 April 2015 15.43 BST
The industry of palm oil, the product found in everything from chocolate to lipstick that is habitually reviled by environmentalists, is facing new challenges due to unrest in key producing regions.
It was reported by the Cameroonian Association of Oil Refineries this month that the export of refined products including palm oil from several African nations, including Nigeria and Cameroon, has been “virtually at a standstill” for several months due to a spate of murders and kidnappings committed by Islamic militant group Boko Haram. The unexpected slowdown in palm oil production in Africa, seen as a key growth area for the product, comes as political tensions are heightening in Indonesia, the world’s leading producer of palm oil............Following the end of Suharto’s 31-year dictatorship in 1998, Indonesia went through a process of decentralising power. Much of the power over land allocation flowed to bupatis (little kings) who preside over districts and have been accused of widespread corruption in the way they hand out logging concessions. “They take decisions in best interest of companies, often from Singapore or Jakarta, rather than communities,” said Tomasz Johnson, forests campaigner at the Environmental Investigation Agency (EIA). The EIA conducted an in-depth investigation into the palm oil industry last year and found multiple instances of corruption and lax law enforcement. Violations included the flouting of plantation licensing laws, attempts by a palm oil firm to bribe police to drop an investigation into its activities and regional governments transferring community resources to private firms. “When companies come up against opposition from communities, bupatis will mobilise state forces against them,” says Johnson, whose research has focused on the central Kalimantan area. “There is low level oppression and sometimes violence. In Kalimantan it’s rare that you go into community where there’s conflict. Often, communities have given up hope of holding onto their land. “We went to see one concession where the community believes someone was killed by security forces that were employed by a palm oil company. These people just can’t win, it’s a simmering human rights issue.” ..........President Joko Widodo has warned: “We mustn’t allow our tropical rainforest to disappear because of monoculture plantations like oil palm.”.... David Gaveau, a scientist at the Center for International Forestry Research, said: “The central government is now trying to pull back that power and recentralise things. They realised it all went too far. It’s uncertain which way things will go, but there’s certainly a lot of tension around it............. “There are rogue operators who are playing the corruption game with the local authorities,” said Gaveau. “They get land through dodgy deals and they are totally under the radar, they basically do what they want while the big companies are trying to clean up their acts.
“A big problem is the overlapping land rights, which causes a lot of conflict. When you don’t have any power, someone can come in and clear your land, even though that goes against the country’s constitution. While Indonesia is largely an agrarian society, there is an increasingly wealthy middle class who see land as an investment for the future.”
http://www.theguardian.com/sustainable-business/2015/apr/23/corruption-indonesia-palm-oil-industry-communities

3 April 2015: Conditional suspension for 1 April 2015 mandatory L/C rule

Govt provides conditional suspension for mandatory use of L/C Linda Yulisman, The Jakarta Post, Jakarta | Business | Wed, April 01 2015, 8:55 PM .box-profile {font-size:12px;font-face:verdana;background-color:#000;color:#fff;padding:1px 5px;float:left;margin:2px;} .box-profile:hover {background-color:#ff0000;} Business News Streak of strong US hiring likely extended into March Govt to build new port in Subang or Indramayu Rupiah rises 70 points to Rp 12,978 at opening The government has offered flexibility for exporters who still cannot comply with the obligatory use of letters of credit (L/C), which took effect starting from Wednesday.The L/C rule governs four primary commodities: coal; palm oil and palm-kernel oil; oil and gas; and minerals, including tin.Trade Minister Rachmat Gobel said that the suspension could apply to exporters who obtained exclusions from either the Energy and Mineral Resources Ministry or the Agriculture Ministry.“This is intended to give time for exporters to adjust and revise contracts made and signed before the Trade Ministry Regulation No. 04/2015 [on mandatory L/C use] was issued so that it will not hamper their exports,” he said in a statement. Following the suspension, an audit will be carried out to decide whether the exporters are eligible to be excluded temporarily from the obligation, according to Trade Ministry Regulation No. 26/2015 that specifies the suspension.Apart from that, the L/C term can be carried out later through export financing institutions to be set up by the government in addition to foreign-currency banks. - See more at: http://www.thejakartapost.com/news/2015/04/01/govt-provides-conditional-suspension-mandatory-use-lc.html#sthash.ISuoH0n5.dpuf

14 March 2015: BI to take action to halt bond sell-off, push for development of more agro-industrial estates, biogas facilities and rural electrification

BI to take action to halt bond sell-off Satria Sambijantoro, The Jakarta Post, Jakarta | Headlines | Fri, March 13 2015, 7:09 AM; Bank Indonesia (BI) promised on Thursday to conduct market operations to protect government bonds and the rupiah following a massive withdrawal of foreign funds from the bonds market, totalling to Rp 10 trillion (US$759 million), over the past two weeks.BI Senior Deputy Governor Mirza Adityaswara said Thursday that the central bank would intervene to stabilize yields of government bonds to prevent further sell-off in the bond market.....Massive foreign fund outflows have recently hit Indonesia as indicated by the sharp drop in foreign investors’ ownership of Indonesian bonds. The foreign investors’ ownership was roughly 40 percent of the total tradable bonds at Rp 509.3 trillion earlier this month, but this figure shrunk by about Rp 10 trillion to Rp 499.3 trillion as of March 10, according to Finance Ministry data.In the same period, total government bonds held by BI declined slightly from Rp 53 trillion to Rp 52.7 trillion, suggesting that the central bank has not yet bought enough bonds to counteract the outflow.Renewed concerns of interest-rate hikes in the US have drained assets stashed in emerging markets, including Indonesia, with both the rupiah and Indonesian bonds suffering the hardest hits.This month, the rupiah led losses in Asia as it depreciated by more than 2 percent to hit 13,176 per dollar on Thursday, according to the Jakarta Interbank Spot Dollar Rate (JISDOR).Meanwhile, the yields for the benchmark 10-year rupiah bonds have risen 78.4 basis points month-to-date to 7.84 percent. Yields move in the opposite direction of prices such that bonds with higher yields are rated as cheaper assets among investors. - See more at: http://www.thejakartapost.com/news/2015/03/13/bi-take-action-halt-bond-sell.html#sthash.L0Y7t8eZ.dpuf

Agro-industrial estates outside Java in pipeline Linda Yulisman, The Jakarta Post, Jakarta | Business | Thu, March 12 2015, 5:57 AM..... The government is set to start construction on three agro-based industrial estates outside Java to bolster industrial growth in Southeast Asia’s largest economy.Development of two estates, to be located in Palu, Central Sulawesi, and in Bitung, North Sulawesi, may begin by mid-year, to serve as centers of coconut and fishery processing and the manufacturing of cocoa derivatives and rattan-based products, respectively.Another estate, to be situated in Kuala Tanjung, North Sumatra, and concentrate on palm-oil-based industries, will be built next year, according to industry officials.... The government’s minor stake in industrial zones has contributed to uncontrollable land prices and rents nationwide.“Right now it is hard for us to control the price of land in industrial estates owned and run by the private sector. Land issues are often a major deterrent to new investment,” he told reporters on the sidelines of an agro-industry meeting. The central government would cooperate with regional administrations to execute the projects with a possibility of jointly managing the zones once they were operating, Heru added. The Indonesian government is involved in 6 percent of existing industrial estates in the country, a far cry from the 78 percent engagement by the Malaysian government and 48 percent by the Thai government.The three new agro-based industrial estates are among 14 planned to be established by 2019 outside Java — where most industrial estates are located — with the majority of finance coming from private investors.....
 http://www.thejakartapost.com/news/2015/03/12/agro-industrial-estates-outside-java-pipeline.html#sthash.KpkodPPg.dpuf

Regulating access to palm oil-based biogas facilitates rural electrification by Ade Cahyat and Daddy Ruhiyat, Samarinda | Opinion | Mon, March 09 2015, 6:40 AM; The administration of Joko “Jokowi” Widodo has ambitious targets for both the electrification ratio and the renewable energy share in the energy mix. According to the mid-term development plan (RPJMN) 2014-2019 — the official document outlining the president’s development targets — by the end of his tenure the electrification ratio should reach 96.6 to 100 percent while the share of renewable energy of the national energy mix should be 10 to 16 percent.The achievement of these two targets is interdependent when it comes to rural electrification. Most of the households without electricity — between eight and 11 million households — are located in remote rural areas, where renewables are the most efficient resources for small-scale, decentralized power generation....Biogas from palm oil mill effluent (POME) is among the least cost renewable and is available in some remote rural areas in palm oil producing regions. The high organic content effluent — produced alongside with the crude palm oil production, which is mainly located in remote rural areas — results in a high volume of biogas. A palm oil mill processing fresh fruit from 10,000 ha to 15,000 ha of mature oil palm estates can produce biogas that is sufficient to fuel biogas engines with an installed capacity of more than 1 megawatt (MW), enough to electrify 2,000 households with 24 hours of electricity.In the case of East Kalimantan, for example, each of 12 potential — out of the total 62 — mills could generate 1 MW or more, all of which are close to villages with enough inhabitants to absorb the additional produced power. Those villages currently have no electricity or have less than 15 hours of supply per day from diesel generators. The marginal cost to generate a kWh of power from POME biogas is less than half of that from diesel.... http://www.thejakartapost.com/news/2015/03/09/regulating-access-palm-oil-based-biogas-facilitates-rural-electrification.html#sthash.9rpa8Jtb.dpuf

5 March 2015: Indonesia to crack down on tax avoidance - transfer pricing in coal, palm oil, cocoa and other commodities a problem, includes some major companies; greater effort to prosecute agroforestry companies

Indonesia to Crack Down on Corporate Tax Avoidance By Gayatri Suroyo & Eveline Danubrata on 09:16 pm Feb 24, 2015; Jakarta. The government plans to crack down on corporate tax avoidance via transfer pricing this year to try and recoup Rp 200 trillion ($15.6 billion) in lost state income, mainly in the commodities sector, the new head of the tax office said.... President Joko Widodo’s administration is planning to double its infrastructure spending this year to build ports, power plants and other projects, and the tax office figure for lost income would cover more than two-thirds of that spending... As a proportion of gross domestic product, Indonesia has one of the lowest tax takes in the region, trailing behind Malaysia, Singapore, Thailand and the Philippines, according to the World Bank.... Sigit Priadi Pramudito, director general of taxes, said in an interview with Reuters late on Monday that many Indonesian firms, particularly those in the coal, palm oil, cocoa and other commodities sectors, were avoiding corporate taxes by using transfer pricing.... He declined to give names, but said some of them were major companies.... http://thejakartaglobe.beritasatu.com/business/indonesia-crack-corporate-tax-avoidance/

Govt ramps up efforts to prosecute agroforestry firms Hans Nicholas Jong, The Jakarta Post, Jakarta | National | Sat, February 21 2015, 7:05 AM; With forest fires in Sumatra challenging the country’s aim to reduce greenhouse gas emissions by 26 percent to 41 percent by 2020, the government has rolled out a plan to boost law-enforcement measures against agroforestry firms.The Environment and Forestry Ministry said on Friday that it would step up its oversight of agroforestry firms as well as monitoring of legal proceedings involving companies that were alleged to have started forest fires. Environment and Forestry Minister Siti Nurbaya Bakar previously expressed her disappointment over the Bengkalis State Court’s decision to declare two executives of PT National Sago Prima (NSP) not guilty of burning forests in Riau.... “The judges did not apply Law No. 18/2013 on the prevention and eradication of forest damage,” she said during a recent visit to Pekanbaru, Riau. “We [also] found that the three judges did not have environmental credentials [on their resumes].”PT NSP was found guilty earlier of burning forested land that had destroyed thousands of hectares of sago plantations in the Meranti Islands regency.... http://www.thejakartapost.com/news/2015/02/21/govt-ramps-efforts-prosecute-agroforestry-firms.html#sthash.BeneCCdb.dpuf

24 Feb 2015: Tax amnesty proposed, palm oil businessmen sentenced for bribing Riau governor

Jokowi political and police-KPK tussles? Jokowi adds on tax amnesty offer to commodity export LC requirement to shift money flows and expand Indonesia capital market; Singapore observations. /khorreports-palmoil/2014/11/eye-on-president-jokowi-asks-china-aiib.html

Palm oil businessman gets 3 years for bribing governor Haeril Halim, The Jakarta Post, Jakarta | National | Tue, February 24 2015, 6:57 AM; The judge said Gulat, who is chairman of the Indonesian Oil Palm Farmers Association (Apkasindo) Riau chapter, had violated Article 5 of the 1999 Corruption Law on bribery of state officials, which carries a maximum sentence of five years.... Supriyono said that evidence and witness testimonies during the two month trial had confirmed that Gulat had paid Annas $166,100 for his service obtaining a land conversion permit for a total of 1,188 hectares of land in Kuantan Sengingi regency and 1,214 hectares in Rokan Hilir regency belonging to Gulat and his friends. This was part of the 1,638,249 hectare forest conversion proposed by the Riau administration to the Forestry Ministry last year...... http://www.thejakartapost.com/news/2015/02/24/palm-oil-businessman-gets-3-years-bribing-governor.html#sthash.jwSU27zU.dpuf
 
 
8 Feb 2015: According to Jakarta sources (including bankers), the LC issue is significant. Big volumes leave the country without LC. The issues at hand include transfer pricing, offshore booking centers and tax issues. In recent years, commodity trading has been specifically targeted with lower taxes and declining tax rates on higher volumes by key centers. Producers may also be public listed in other countries. Does this hamper Indonesia's effort to expand and widen it's tax base? Notable too is Jokowi speaking of "dangerous inequality" in this. Tax loyalty of rising interest? Watch out for compliance. Tax issues for multinationals and individuals are increasingly under the microscope in the  USA, Europe and elsewhere.
 
L/C required for exports of key commodities Linda Yulisman, The Jakarta Post, Jakarta | Business | Fri, January 16 2015, 9:18 AM . A new regulation set to take effect in April will require exporters of the country’s key commodities to use letters of credit (L/C) in their overseas shipments, a move that will help generate a reliable record of export earnings. The rule, issued by the Trade Ministry last week, is set to affect four primary commodities: coal; palm oil and palm-kernel oil; oil and gas; and minerals, including tin. On average these items accounted for 41 percent of overall exports in the five years from 2009 to 2013 with an average of US$71.04 billion a year, according to the ministry’s statistics.“By demanding the application of L/C in exports, we want to increase export earnings and at the same time get accurate records, particularly from sales of natural resources,” Trade Minister Rachmat Gobel said in a press conference on Wednesday evening. Based on the rule, the prices in the L/C should reflect actual transaction value. It also stipulates that without the letters, overseas delivery cannot be executed. http://www.thejakartapost.com/news/2015/01/16/lc-required-exports-key-commodities.html#sthash.O0IKDRbH.dpuf
 
4 Feb: M&A and public listing for 100,000ha limit?
Regulatory loophole, weak prices spur Indonesia palm oil takeovers by Reuters, Wednesday, 4 February 2015; JAKARTA: Some Southeast Asian agri-companies are exploiting a regulatory loophole and turning to takeovers to expand their oil palm acreage in top exporter Indonesia just as weak demand for the edible oil makes smaller producers more open to deals....  Under a 2013 law, companies can only plant up to 100,000 hectares with oil palms, a limit put in place mainly to protect the smallholders that account for about 40 percent of Indonesia's palm oil output....  The restriction, however, exempts listed companies majority owned by the public, which makes some of the 11 palm oil firms listed on the Jakarta stock exchange potential takeover targets for others seeking to expand their land bank. Nine of these listed companies have a market value of less than $1 billion, according to Thomson Reuters data....  "The local regulations do indeed provide strong impetus for private owners to consolidate and list their plantation holdings on the Indonesian stock exchange or inject into a listed company," Le Sa Cheah, head of Indonesia equity capital market for Singapore's DBS Bank, told Reuters.... Malaysian firm Sime Darby Bhd, one of the world's biggest palm oil producers, recently said it may list its palm oil assets in Indonesia or launch a reverse takeover of an Indonesian firm. Smaller local firm PT Sawit Sumbermas Sarana Tbk has also said it plans to acquire two firms for 1.5 trillion rupiah ($119 million) this year....  Some agri-conglomerates that have already reached their acreage limit in Indonesia, however, are unwilling to test the regulations and are looking elsewhere, such as in Africa, where land is still abundant and companies are less restricted in increasing their acreage.... http://www.thestar.com.my/Business/Business-News/2015/02/04/Regulatory-loophole-weak-prices-spur-Indonesia-palm-oil-takeovers/?style=biz