Kuala Lumpur Kepong (KLK), which has a landbank of 300,000 ha and a market cap of $5.5 billion, has been the focus of major NGO campaigns over the years, but despite more the company making progress on its sustainability policies, it still remains in the supply chains of deforesters, such as Felda Global Ventures, TH Plantations, United Malaaca, and others. Also, the company has seen high exposure to possible fires in its supply chain.
At the end of 2016, after years of NGO pressure, Kuala Lumpur Kepong (KLK) finally withdrew from a portion of indigenous customary owned forest in Collingwood Bay, Papua New Guinea. Nonetheless, KLK has not clarified its overall plans either for its $8.7 million investment in Collingwood Plantations Pte, which has a total land bank of 44,342 ha in the region, or for its 37,000 ha plantation deal in Sepik Province, Papua New Guinea. KLK’s claims conflict with the rights of the nine tribes that live in the area, whose members have vehemently contested KLK’s right to destroy their forests and establish palm oil plantations. Both PNG Courts and the Roundtable on Sustainable Palm Oil have ordered KLK to stop work in the area.
In January 2015, KLK made some progress by announcing it would employ the industry standard for High Carbon Stock forests. But the policy was widely criticized for not addressing the company’s suppliers, trading partners, or joint ventures, and for not committing to using the standard High Carbon Stock approach. KLK has since committed to the standard High Carbon Stock methodology, but its policy still does not bind KLK’s suppliers and partners to any No Deforestation practices, making it significantly weaker than other companies. In 2014, an executive at PT ADEI Plantation, a subsidiary 92 percent owned by KLK, was jailed for burning forests.
KLK is a member of the Roundtable on Sustainable Palm Oil. Batu Kawan Bhd, also a palm oil producer but not an RSPO member, is the top shareholder in KLK, owning 47 percent.