Golden Agri-Resources: Sadly, No Longer a Green Tiger

Forest Heroes announced today that it was downgrading the Singapore-listed palm oil producer Golden Agri-Resources (GAR) in its Green Tiger rankings of environmental and social performance of major producers in response to violations of the company’s Forest Conservation Policy. As a result of serious and needlessly persistent issues, Forest Heroes is recommending to palm oil buyers and investors that GAR can no longer be considered a responsible supplier.

Back in 2010, in response to Greenpeace’s initial campaign, GAR took the first steps towards forest conservation in the palm oil industry – years before any of the other major players. But now, when it comes to conservation, the rest of the industry is passing GAR by.

One of the things that gave GAR’s 2010 efforts credibility was that they became members of The Forest Trust (TFT) and, with Greenpeace, pioneered the development of a methodology for protection of High Carbon Stock landscapes that has become the industry norm.

Unfortunately, over the last 18 months, GAR has undergone considerable backsliding according to a range of public and private reports. TFT today suspended GAR’s membership in response to these violations of its Forest Conservation Policy and Social and Community Engagement Policy. In addition, the Roundtable on Sustainable Palm Oil on May 8, 2015 took the serious step of banning the company from “acquiring or developing any new areas” after its complaints body investigated a grievance by the Forest People’s Programme related to a subsidiary operating in Kalimantan (Indonesian Borneo). The RSPO called the subsidiary’s HCV assessment “inadequate and potentially misleading.”

yellow_listCompany insiders and independent authorities have noted that there have been repeated problems in the company’s implementation. After GAR extended its Forest Conservation Policy to its third party suppliers in February, 2014, it has continued to do business with producers that other companies with No Deforestation policies have suspended – leading to questions about the sincerity of its commitment to this aspect of its responsibility policy as well.

Finally, insiders report that GAR has not taken seriously the joint industry initiative through the Indonesian Chamber of Commerce (Kadin) to support the Indonesian government’s efforts to improve forest governance, even as other companies have given it serious backing.

GAR’s regression comes despite tremendous overall progress in the industry. Its competitors Wilmar International, Cargill, Musim Mas, and Bunge have all adopted and are implementing No Deforestation policies; although some of these companies have faced challenges, none of those challenges have reached the level reported for GAR.

Forest Heroes has communicated at the highest levels the need for GAR to take immediate and substantial remedial steps, and encouraged customers and investors to immediately and seriously reevaluate any commercial relationships with GAR. The company only adopted its initial Forest Conservation Policy after Nestle, Burger King, BNP Paribas and others terminated relationships with the company. Unfortunately, it seems the company requires a dose of that harshest of medicines again.

Forest Heroes continues to monitor their performance. 

On May 19, 2015

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