A new report by Friends of the Earth US, WALHI (Friends of the Earth Indonesia), and Milieudefensie (Friends of the Earth Netherlands) alleges palm oil giant Astra Agro Lestari’s (AAL) operations in Indonesia to be indulged in prolonged land conflicts, governance lapses, and lack of accountability.
The report alleges extensive environmental and governance violations by AAL, including illegal palm oil cultivation within Indonesia’s forest estate, ongoing intimidation of environmental defenders, and operation of several subsidiaries without necessary permits.
Titled ‘Cultivating Conflict: How Astra Agro Lestari, Brands and Big Finance Capitalise on Indonesia’s Governance Gaps,’ the report also exposes how consumer brands, agribusiness traders, and financiers associated with AAL leverage Indonesia’s weak governance and administrative shortcomings to maintain business operations.
The report found that 17 AAL subsidiaries’ palm oil concessions overlap with 17,664 hectares of Indonesia’s forest estate. 74 percent of AAL’s concessions in the forest estate are in Sulawesi, where 7 AAL subsidiaries’ concessions overlap with more than 13,000 hectares of Indonesia’s forest estate.
It also highlights that at least 1,100 hectares of AAL’s palm oil plantations in Indonesia’s forest estate appear to be illegal and three AAL subsidiaries in Sulawesi are operating without the required cultivation permit (HGU).
The report revealed that agribusiness traders ADM, Bunge, Cargill, Olam, amongst others, continue to source palm oil from mills associated with implicated AAL subsidiaries. Also, at least 18 global consumer brands, including Unilever, Barry Callebaut, and General Mills, have a recent history of sourcing palm oil from AAL.
Also, as per the report, financiers including BlackRock, Vanguard, HSBC and Dutch pension fund ABP continue to provide substantial financing to AAL and its parent companies.
“AAL’s land grabbing, human rights abuses, and illegal operations should be a wake-up call,” said Uli Arta Siagian, Forest and Plantation Campaign Manager at WALHI National. “The Indonesian government should ensure the return of land to communities and farmers taken by AAL without consent. The Ministry of Agrarian Affairs and Spatial Planning should investigate AAL’s maps and permits and ensure open access to this data.”
This report comes two years after Friends of the Earth groups published evidence of AAL’s environmental and human rights violations, including violent land grabbing, criminalisation of environmental human rights defenders, and degradation of rivers. As a result, consumer brands and financiers have had to rethink their increasingly risky business relationships with AAL and ten consumer brands suspended palm oil sourcing from the company in some capacity.
