Photo Credit: Agence France-Presse (AFP)

Indonesian food and agriculture giant, Indofood Agri or “IndoAgri” is denying allegations of violations of the standards of the Roundtable on Sustainable Palm Oil (RSPO) and said that it had withdrawn its membership from the organization, preferring to focus on compliance to the Indonesian Sustainable Palm Oil (ISPO) standard.

“In summary, IndoAgri categorically denies these false allegations, regarding our human rights and labor practices. We fully comply with our Sustainable Palm Oil Policy, and we have 62 percent of our plantation division workforce as Union members, and no outstanding issues or complaints from our Unions,” an IndoAgri statement sent to the Palm Scribe from its Singapore office said.

The statement was sent following the publication on June 19, of an article in an investment newsletter “Valuewalk Premium”, which said that US-based financial giant Citigroup has canceled all financing to Indofood after the company had allegedly failed to address over 20 alleged violations of the RSPO standard. The newsletter also said that RSPO had also ousted Indofood from the organization.

“Our subsidiary, P.T. Salim Ivomas Pratama (SIMP) withdrew from the RSPO membership. We decided to focus our sustainability journey and practices on implementation of mandatory Indonesia Sustainable Palm Oil (ISPO) standards,” the IndoAgri statement said, rebutting the allegation by the newsletter that it was booted out of RSPO.

Another subsidiary, PT PP London Sumatra Indonesia, or Lonsum, had already withdrawn its membership in RSPO after it had been suspended in November last year for alleged core labor law violations.

As a company listed on the Singapore Stock Exchange, the company reassured stakeholders in the statement that it was fully complying with Indonesian laws and regulations as well as the company’s own Sustainability Policy which has key Commitments on No deforestation and conservation of High Conservation Value and High Carbon Stock areas, No planting on peat regardless of depth, No burning, Respect for Labour and Human Rights, including Freedom of Association and non- discrimination.

It pointed out that based on the 23 audits carried out by accredited RSPO auditors and all involving their stakeholders, all of IndoAgri’s mills in North Sumatra remained RSPO certified, as there were no material findings to substantiate allegations of violations. It said the company has addressed all Non-Conformities (NC’s) arising from the above audits.

It also cited an Executive Summary of RSPO’s Independent Verification Audit from June 4 to 7, 2018 that concluded that the company has adequate health and safety policies and operating manuals and procedures and generally adheres to the requirement for Personal Protective Equipment (PPE), and is compliant in terms of adhering to the Government regulation on periodical medical tests for workers.

The audit results also showed that the company also had also shown significant improvement in terms of its treatment of casual workers, and complied with the minimum wages set for permanent workers.

The RSPO investigation of oil palm plantations operated by Indofood’s subsidiaries had been sparked by a complaint jointly filed by Rainforest Action Network, the International Labor Rights Forum (ILRF) and the Indonesian labor rights organization OPPUK in October 2016.

“There is no evidence of child labor or the exploitation of children in either of the three estates or mill. The Company is compliant to the non-usage of paraquat as herbicide,” IndoAgri said, further adding that the company had completely phased out the chemical since late March 2018.

The IndoAgri statement, however, made no mention of the Citigroup’s decision on canceling the finance to Indofood.

With a market cap of $4billion, Indofood is Indonesia’s largest food company. It is also the core company in Indonesia’s Salim Group which controls a large oil palm land bank in the country.

Share This