Banks urged to act as major Indonesian corporations are found failing on Indigenous Rights

New report evaluates ten of the largest Indonesian corporate groups in the forest-risk sector and finds them all failing to ensure free, prior, and informed consent (FPIC). Financial powerhouses are urged to require their suppliers or clients to do more to prove full compliance with laws, regulations, and best practices for FPIC processes.

San Francisco, CA – A new report released today by Rainforest Action Network (RAN) calls out ten of the largest corporate groups involved in the forest-risk commodities of timber, palm oil, and pulp and paper for failing to have adequate policies and procedures in place to ensure that Indigenous and local community rights are respected in the process of agricultural development. The report evaluates the published policies and standard operating procedures against best practices for fulfillment of FPIC rights and finds that the policy commitments from these ten major players in the agribusiness sector are “nothing more than empty promises”.

“Indonesia’s contribution to the interconnected global crises of deforestation, attacks on Indigenous communities, and climate change is significant,” said Gemma Tillack, Forest Policy Director for Rainforest Action Network (RAN). “And these forestry and agribusiness giants are, in many ways, driving it ever forward through their failure to fulfil FPIC rights in their operations and supply chains. Many of these corporate groups have made commitments to cut deforestation and the violation of Indigenous Peoples’ rights out of their business practices. All of them are failing to achieve this, regardless, but they are also failing to even clearly disclose how they acquire lands from Indigenous Peoples and communities on the frontlines of forestry and plantation expansion.”

The ten corporate groups evaluated are Best Industry Group, Genting Group, Jardine Matheson Group, Korindo Group, Rajawali Corpora, Royal Golden Eagle, Salim Group, Sinar Mas Group, Triputra Group, and Wilmar International. The report finds that none of the published policies and standard operating procedures of the ten corporate groups are adequate in order to demonstrate that the rights of affected communities to give or withhold their Free, Prior and Informed Consent (FPIC) to proposed and existing oil palm and pulp plantation development, or forestry operations, on land that communities own and use, are being upheld.

Over five million hectares of Indonesia’s lands are managed by this powerful collection of forestry and agribusiness giants, including stands of rainforests and peatlands that remain ‘undeveloped’ within areas allocated to them by the government, or set-aside as conservation areas. Collectively this group of companies has a huge forest footprint and an enormous impact on the Indigenous Peoples and local communities of Indonesia.

The report calls on the multinational brands and banks doing major business with these ten corporate groups, including fast-moving consumer goods companies Colgate-Palmolive, Ferrero, Kao, Mars, Mondeléz, Nestlé, Nissin Foods, PepsiCo, Procter & Gamble, and Unilever, and the financial powerhouses of Mitsubishi UFJ Financial Group (MUFG), Bank Negara Indonesia (BNI), CIMB, Industrial and Commercial Bank of China (ICBC), DBS, ABN Amro, and JPMorgan Chase, to require their suppliers or clients to do more to prove full compliance with laws, regulations, and best practices for FPIC processes. The banks’ and brands’ sustainability claims must be able to demonstrate, through the use of credible independent verification mechanisms, that the rights of affected Indigenous Peoples and local communities are being fully respected, especially their right to give or withhold their free, prior, and informed consent to proposed and existing developments that affect them and the customary lands that they own and use and that we all depend on. Responses received from the ten corporate groups following notification of this evaluation of their FPIC policies and standard operating procedures are available at www.ran.org/FPICevaluation.

This article was originally published by RAN