Some of the world’s biggest buyers have stopped trading with Korindo after the emergence of footage claiming to show illegal burning in Papua province

A Korean palm oil company has been dropped by buyers after footage emerged that allegedly shows the illegal burning of vast tracts of tropical forest on lands it holds concessions for in Indonesia.

Some of the world’s biggest palm oil trading producers including Wilmar, Musim Mas and IOI have stopped using palm oil sourced from Korindo, much of which is destined to meet European demand.

Korindo’s alleged deforestation of pristine woodland in Papua province also threatens to destroy the last sanctuary of several birds of paradise and the tree kangaroo, according to a report by a new environmental alliance called Mighty.

The group has collected evidence from drones, remote sensors, GPS satellites, and videographers and photographers on the ground, which it says proves that Korindo has flouted Indonesia’s no-burning laws and violated responsible sourcing requirements.

Bustar Maitar, Mighty’s campaign director in Papua, told the Guardian: “Korindo is clear-cutting forests and then starting fires to clear the land of remaining biomass. That is forbidden by Indonesia’s regulations but during last year’s forest fires, most of the blazes in the Papua region happened in Korindo’s concessions.”

“There are a lot of animal species and flora here that haven’t even been discovered yet,” Maitar added. “If these kinds of land clearing activities continue, they may never be.”

But Koh Gyeong Min, Korindo’s head of sustainability, denied that the firm had been responsible for any illegal forest burning. “It is not true actually,” he said. “We followed all of the Indonesian regulations and acquired all the proper licences from the government for all areas of operation within our group.”

“I also would like to ask: do the local NGOs or residents have any evidence about our company that they have brought to the Indonesian government or the local courts? As far as I know there have been no cases of that.”

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The allegations come as south-east Asia’s 2016 burning season is just beginning. On 30 August, the Indonesian government warned that haze from fires on Sumatra and Kalimantan could reach Malaysia and Singapore in the days ahead.

More than 3,000 hotspots have been detected in the Indonesian archipelago in the last month, with maps released by Greenpeace of Riau and West Kalimantan showing that many are occurring on industrial plantation concessions in the same areas that burned last year.

Yuyun Indradi, Greenpeace Indonesia’s forest campaigner said: “Companies that refuse to take steps to prevent fires have not just ash, but blood on their hands.”

Wildfires in Indonesia’s tropical forests last year are thought likely to have contributed to the premature deaths of more than 100,000 people, and to have emitted more CO2 than the whole of the UK that year.

Facebook Twitter Pinterest Native forest cleared for palm oil plantations. Photograph: Yerimia Leo/Mighty

Korindo is active in Indonesia’s north Malaku region as well as Papua, holding around 620 square miles of forest concessions in total. The company, whose promotional video calls on viewers to “make the Earth green”, has already cleared around 193 square miles of forest.

Maitar said that Korindo had not responded to letters sent by the new alliance, and that the new report was aimed at putting pressure on the Indonesian government.

Several major buyers of Korindo’s palm oil acted to cut the firm out of their supply chains after hearing of the allegations.

A spokeswoman for Musim Mas told the Guardian that it wanted to see Korindo engage with civil society groups and adopt a “No Deforestation, No Peat, No Exploitation” (NDPE) policy. “During this period we will continue to stop buying the palm oil temporarily and monitor Korindo’s progress,” she said.

NDPEs have become a palm oil industry standard in south-east Asia but the Mighty campaign argues that they are not working. Glenn Hurowitz, Mighty’s US campaign director, said that Korindo had been able to deforest 113 square miles of land since 2013, despite clearly visible satellite evidence of 894 hotspots in that period.

“This investigation shows the true face of the palm oil industry in Indonesia even after No Deforestation policies,” Hurowitz said. “The current, mostly confidential company-by-company system is inadequate. We urgently need a transparent, systematic approach, as well as further action by government and prosecutors.”

One of Malaysia’s largest palm oil companies, IOI – which was itself suspended from a sustainability scheme for not doing enough to prevent deforestation - said that its third party suppliers had also “decided to temporarily stop sourcing from Korindo” after hearing the allegations.

Facebook Twitter Pinterest Korindo’s alleged deforestation of pristine woodland in Papua province also threatens to destroy the last sanctuary the tree kangaroo. Photograph: Tim Laman/NG/Getty Images

The palm oil giant Wilmar told the Guardian that it too had contacted Korindo after a heads up about the new evidence. “Due to a lack of progress from the supplier, and in view of the serious allegations, Wilmar has ceased procuring from Korindo with effect from June 2016,” a spokeswoman said.

None of the companies would reveal how much money they spent on ensuring that third-party palm oil suppliers did not cause environmental damage.

Gyeong Min said that after a demand from Wilmar earlier this year, Korindo began a “high-carbon stock assessment” which would be published later this month. “We also announced a temporary moratorium for our remaining plantation area,” he said.

Last month, a Korindo subsidiary called PT Tunas Sawa Erma declared a three-month suspension of new forest clearings across 25,000 hectares of territory, while it developed a NDPE policy.

But Mighty says that the moratorium did not extend to all Korindo operations. “A couple of months ago we visited their concessions and the land clearing was still happening,” Maitar said. “In our experience with other companies, all activities involving the cutting down of forests should be stopped, while they are doing these sorts of assessments.”</s>Korean firm burns rainforest for palm oil in Indonesia, report says

JAKARTA, Sept 2 (Reuters) - A South Korean-owned company is cutting down primary rainforests for timber and then setting fires to clear the land to plant oil palm in apparent violation of Indonesian law, according to an investigation by environmental groups.

The investigation points to "systematic and widespread use of fire" by the Jakarta-based Korindo Group PT, which adds to the pall of smoky haze choking large parts of Southeast Asia during the annual dry season, the environmental groups said in a report published on Thursday.

Korindo has already cleared more than 50,000 hectares (193 square miles) of tropical lowland forest for palm oil plantations in the remote provinces of Papua and Maluku, and at least 75,000 hectares are at "immediate risk" of being cleared, the report said.

"I've never seen evidence so strong to prove that a company intentionally burned," AidEnvironment Indonesia senior consultant Erik Wakker told Reuters in a telephone interview.

One of Korindo's main customers, Wilmar International Ltd. , told Reuters the company has stopped buying palm from Korindo for violating it's "no deforestation" policy, the company said in an emailed statement.

Korindo blamed local people living near its timber concession area for "lighting fires for hunting wild animals living in the forests".

"Accusations that the Korindo Group were a big contributor to the smoke and haze in 2015 and consequently had an impact on the economy and damaged the environment in Indonesia are not true," the company said in a statement.

Indonesia's environment ministry has sent a team to Papua "to collect material and information", after they were presented with the findings from the report, the ministry's law enforcement director Muhammad Yunus told Reuters.

Indonesia is home to the world's third-largest area of tropical forests. It is also the world's fifth-largest emitter of the greenhouse gases widely blamed for global warming, largely due to deforestation.

Korindo holds a total of 160,000 hectares (619 square miles) of oil palm concessions in eight areas of Papua and Maluku, according to the report, and an estimated 900,000 hectares of logging areas that could also be converted. It is one of the largest plantation companies in eastern Indonesia.

Around 90 percent of the world's palm oil crop grows in Malaysia and Indonesia. Indonesia's President Joko Widodo in April imposed a moratorium on expanding palm oil plantations, with the industry under mounting pressure from global companies that use palm oil in products, ranging from soups to soaps and chocolates, to adhere to environmentally sustainable plantation practices.

Consumer giants, such as Unilever and Kellog, are increasingly demanding "sustainability certification" from watchdog groups, including no use of fire to clear land, before buying products from palm oil producers.

Last year's forest fires in Indonesia burned 2.5 million hectares, an area the size of Great Britain, causing total economic losses of $16 billion, a World Bank report said.

Many forest communities throughout Indonesia practice "slash and burn" agriculture, using fire to clear land. But the World Resources Institute, which runs an extensive database on forest fires in Indonesia, says more than a third of the fires last year were on pulp wood concessions, and a good proportion of the rest were on palm oil plantations.

Under Indonesian law, a company found guilty of clearing land by burning can be fined up to 10 billion rupiah ($735,000), and the management faces up to 10 years in jail. Companies that fail to control fires started elsewhere but which spread into their concession land also face punishment.

Korindo Group employs around 20,000 people across 30 affiliated companies mainly involved in plywood, paper and pulp and palm oil, according to the company's website. It is majority-owned by South Korea's Seung family.

The sparsely populated province of Papua is the Indonesian half of an island shared by Papua New Guinea, and home to indigenous communities.

Mighty Southeast Asia director Bustar Maitar said plantation companies like Korindo compensate Papuan communities for clearing the forests that once provided them with food.

"They get some compensation and they finish their money at markets. They want to go hunting again but there's no more forest. And then because they have no more money and they can't go hunting they go back to complain to the company. So social conflicts keep going because the community no longer has a way to support themselves from day to day."

The environmental groups used satellite images that recorded "hot spots" and infrared pictures showing fires, along with photos and videos taken on the ground, the report said.

During a trip to Korindo's concessions in Papua this year, Maitar said researchers found extensive stacking, a process used to heap woody debris leftover from land clearing into long piles that serve as a pathway for fires.

"Once it's dry, they set it alight," Maitar said.

Wakker at AidEnvironment said the Korindo case poses a challenge for President Widodo after his moratorium on clearing new land for plantations.

"The big question is whether (the president) will have those permits withdrawn or not," said Wakker. "If he allows them to continue clearing that land it's going to be the largest deforestation project in Indonesia."</s>KUALA LUMPUR, Sept 1 (Reuters) - Malaysia aims to "harmonise" its palm oil export duty plan with the more competitive Indonesian levies in a bid to win global market share, a Malaysian minister said in first ever official remarks on what the country's palm sector has long been seeking.

Malaysia has always trailed Indonesia as the world's No.2 producer and exporter of palm oil mainly because of lower land and labour costs in its larger Southeast Asian neighbour.

This gap widened further after Indonesia in 2015 imposed levies on shipments that both improved downstream margins and increased its dominance of major markets like India and China.

Indonesian refined, bleached and deodorised crude palm olein has this year been selling at a discount of around $10 to average Malaysian prices, hurting refiners in Malaysia and prompting calls for a common export policy from them.

"I have suggested harmonizing the tax duty structure (to Indonesia)... It's not good competing with one another. It's a lose-lose situation to keep undercutting (one another)," Mah Siew Keong, Malaysia's minister of plantation industries and commodities, told Reuters in an interview on Thursday.

"The market has changed. China used to be our biggest market, now it is number three," said Mah, adding Malaysia needed to hunt for new markets and diversify.

Chinese imports of Malaysian palm plunged 49 percent in the first half of 2016 from a year ago to 0.6 million tonnes, while its purchases from Indonesia only fell 0.2 percent to 1.2 million tonnes.

Malaysia will look to win back market share in China and enter markets such as Africa, Korea and Japan, said Mah. The Malaysian Palm Oil Board is also working from Iran to target Central Asian countries, he said.

Having more oleochemical plants built abroad would also add value to Malaysia's downstream palm industry, said Mah.

"In Europe we are quite represented. In America, we have not gone there aggressively enough," he added.

Mah expects Malaysia's palm oil output to climb to 20 million tonnes in 2017 if weather normalises for the rest of this year, recovering from a projected drop in 2016 due to the impact of dryness linked to an El Nino weather event.

Analysts expect Malaysian palm oil output to slip to 19 million tonnes in 2016, from 19.96 million tonnes in 2015.

The drop in production this year will, however, not be as drastic as the 16 percent decline seen in the first half, said Mah, as output has picked up over July and August.

Mah retained his palm price forecast of 2,500-2,600 ringgit per tonne for 2017. Benchmark prices are currently near a three-week low of 2,487 ringgit ($610.46).
A South Korean palm oil company is accused of causing the wildfires in Indonesia.