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Wilmar International (WLIL.SI), founded in 1991 and headquartered in Singapore is one of the world's largest agribusinesses. It is involved in a wide range of businesses, mainly in oil palm cultivation, oilseeds crushing, edible oils refining, sugar milling and oleochemicals. It is the world's largest processor and merchandiser of palm and lauric oils and is the leading source of edible oils and specialty fats and oleochemicals to China, India and the Ukraine, east and southeast Africa. Wilmar International is listed on the Singapore stock exchange, and is one of the world's largest palm oil plantation owners and the largest palm oil refiner in Indonesia and Malaysia.
In 2012, Wilmar International revenue was USD45.6 billion, with net profit of USD1.3 billion. As of December 2012, the company owned 255,648 hectares of oil palm, 73 percent of which is located in Indonesia, 23 percent in East Malaysia and 4 percent in Africa - up 14 percent from its 2008 holdings of 223,000 hectares.. Wilmar International and its various subsidiaries also operated 97 palm and lauric oil refineries in 2012, 48 in China, 25 in Indonesia and 13 in Malaysia. Wilmar's total refining capacity for palm oil and soft oils stands at 25 million tons per year. Wilmar operates in more than 20 countries, employing 88,000 people and more than 300 processing plants, and sells its products in 50-plus countries.
In 2011 and 2012, Newsweek ranked Wilmar as the world's least sustainable company in terms of environmental performance (last among the 500 largest publicly traded companies in the world).
But in December 2013, it announced a comprehensive “No Deforestation, No Peat, No Exploitation” policy that required its suppliers to immediately cease any development of forests, including HCV and HCS lands, and peat of any depth. Wilmar has partnered with TFT to implement the policy, and issued its first compliance report in May 2014, and its second one in August 2014. However, with more than 400 suppliers, there have inevitably been serious challenges. Suppliers like Bumitama have continued to engage in deforestation despite commitments to cease land clearing. The independent Indonesian organization Greenomics has found that Kencana Agri, a company 20 percent owned by Wilmar, has recently engaged in deforestation in Sulawesi.
Divestment from Wilmar by the Norwegian Government Pension Fund Global (GPFG) In 2012, the Norwegian Government Pension Fund Global (GPFG) divested from Wilmar and 22 other palm oil companies.
Kuok Khoon Hong |
Wilmar was established in 1991 by Kuok Khoon Hong of Malaysia and Martua Sitorus of Indonesia. In June 2007, Wilmar International completed a major merger with the palm oil and edible oil operations of the Kuok Group. Major shareholders of the company include Kuok Khoon Hong, Robert Kuok and Martua Sitorus. Robert Kuok is currently the richest man in Malaysia and the 64th richest man worldwide.
Shareholders and banks are the most important financial stakeholders of Wilmar International. As of the end of 2012, shareholders financed 34.2 percent of its assets, while banks accounted for 52.4 percent, largely in the form of short-term loans. European and U.S. financial institutions own or manage 4 percent of Wilmar International’s outstanding shares, with a value of USD481 million. The pension funds hold USD71.75 million of Wilmar International shares.
Archer Daniels Midland owns 16 percent of shares in Wilmar.
Sumatra: in August 2010, Wilmar destroyed the small village of Sungai Beruang, located in the middle of a big palm oil plantation 40.000 hectares in size.
Indonesia Since 2007, three complaints have been submitted to the IFC Compliance Advisor Ombudsman (CAO) against Wilmar's operations in Indonesia for clearing land without appropriate community approvals, legally required permits, or the completion of Environmental Impact Assessment processes, in violation of national laws and Roundtable on Sustainable Palm Oil (RSPO) principles. The most recent complaint, filed in 2011, concerned Wilmar calling on government forces to dismantle a community settlement on disputed land. As of 2013, mediation continues unresolved.
In February 2013, Friends of Borneo, SAVE Wildlife Conservation Fund, Jakarta Animal Aid Network and others filed a complaint with the RSPO stating that Wilmar subsidiary PT Mekar Bumi Andalas is encroaching onto High Conservation Value Forests and building crude palm oil shipping stations in Balikpapan Bay, home to one of the five largest known populations of proboscis monkeys, as well as Irrawaddy dolphins, dugongs, green turtles, and unique coral reefs and sea grass beds.
In April 2013, controversy erupted around Bumitama Agri LTD, one of Wilmar's major suppliers (in 2011, Wilmar bought 56.8 percent of Bumitama's Crude Palm Oil and Palm Kernel Oil), and in which Wilmar holds roughly five percent of shares. Subsidiaries of Bumitama had cleared thousands of hectares of forest within protected forest areas, displaced endangered orangutans, and were revealed to hold at least 5,000 hectares of unpermitted plantation landbank. Wilmar continued to purchase palmoil from Bumitama Agri in 2014, which continued to operate a plantation without the necessary permits, thereby bringing illegal palm oil into the supply chain.
In June 2013, WWF published a report which documents how Asian Agri purchased palm oil fruit that was illegally grown within the boundaries of the Tesso Nilo Forest Complex, an area that includes Tesso Nilo National Park and surrounding forest concessions where it is illegal to plant palm oil.
In December 2013 a report detailed the conflicts on the concessions of subsidiary PT Permata Hijau Pasaman I (PT PHP I), where it is involved in land conflicts with the local Kapa community. It started land clearance and planting before it obtained environmental and land use licenses. PT PHP I is also not yet RSPO certified and has still to conduct a High Conservation Value. The same report also showed how Wilmar's subsidiary PT MS has still not solved all the conflicts with the local communities, despite the fact that it was awarded RSPO certification on 11th August 2010.
PT Sawindo Cemerlang and its subsidiary PT Sawit Tiara Nusa cleared primary forest belonging to indigenous forest communities in 24 villages in the West Popayato subdistrict of Gorontalo Province up until spring 2014. Wilmar affiliate PT Sawindo Cemerlang also took over land in the Batui Banggai subdistrict in the midst of active land conflict with local communities, effectively preventing them form obtaining a Community Forest Permit.
A Greenomics report from May 2015 shows that in the first quarter of 2015, Wilmar was buying CPO produced by PT Austindo Nusantara Jaya (ANJT), a company that continues to extensively clear high carbon stock (HCS) forest in West Papua province to date. According to a Mongabay article, Wilmar stopped sourcing from ANJT in April 2015.
On 11th May 2015 human rights and environmental organization Lingkaran Advokasidan Riset (LinkAR) Borneo delivered a complaint letter to the Roundtable on Sustainable Palm Oil (RSPO) alleging multiple violations of RSPO requirements (including landgrabbing, the lack of permits and the use of fire) by PT. Swadaya Mukti Prakarsa (PT. SMP) - a key Wilmar Group supplier and subsidiary of First Resources Group.
In Nigeria, in April 2014, Wilmar was grabbing forestland in the vicinity of Afi Wildlife Sanctuary, close to the Cross River National Park Okwangwo Division, which contains high-conservation value forest. This territory is a buffer zone to the wildlife sanctuary of the National Park and Afi Forest reserve.
There is no Environmental Impact Assessment on any of the concessions made to Wilmar, yet Wilmar has already deforested and bulldozed several thousand hectares of land in contravention of NIgeria's Act CAP E12.
Nigerian NGO Rainforest Resource and Development Centre (RRDC) made a formal complaint to the RSPO, accusing Wilmar of unlawful acquisition of land, failure to comply with national laws and regulations, encroachment on large portions of the Cross River National Park (CRNP) and the Ekinta forest reserve and lack of transparency. In 2013, RRDC filed a lawsuit against Wilmar in the Federal High Court of Nigeria.
In Uganda a large proportion of the palm oil plantations are in areas previsouly covered by natural forest, of which an estimated 3,600 have been destroyed to make way for palm oil plantations. Wilmar's joint venture Bidco Oil Refineries and its subsidiary Oil Palm Uganda Limited (OPUL) have violated several national land laws including the Ugandan Constitution, the Land Acquisition Act, and the National Environmental Act 1988. On 19 February 2015, a group of farmers filed a lawsuit against Bidco Uganda and Amos Ssempa, who leased the land to Opul.
Nigeria - As of May 2014 Wilmar had yet to sign a Memorandum of Understanding with any of the 20 host communities in the Cross River State area, where thousands of smallholder farmers are loosing their ancestral land. Local NGO RRDC filed a complaint to the RSPO in 2012.
Uganda - Several communities have been displaced, often with little or no compensation or alternative livelihood options. In February 2015, farmers filed a lawsuit against the joint venture co-owned by Wilmar.
Liberia - The concession agreements signed between CRC and the Government failed to recognise communities customary ownership of the land, do not stipulate the need for FPIC and inlcude provisions allowing involuntary resettlement. When communities protested the non-payment of wages by SIFCA, they suffered violence and illegal arrest at the hands of the paramilitary unit of Liberia National Police Emergency Response Unit.
Wilmar announces its no deforestation, no peat, no exploitation policy
On December 5 2013 Wilmar announced its No Deforestation, No Peat, No Exploitation Policy.
Note: In 2012 Norway's Government Pension Fund Global divested from Wilmar, after it revised its investment guidelines to include deforestation as a portfolio risk.
Sources mentioned above:
FoE Europe report (November 2015): The financing of Wilmar International – Update November 2015.
Friends of the Earth Commodity Crimes (November 2013): Commodity Crimes: Illicit land grabs, illegal palm oil, and endangered orangutans.