Multiple Suppliers (Tesso Nilo)
The Tesso Nilo landscape represents a microcosm of the challenges of those faced throughout Indonesia. Our diagnostic report on the Riau Province provides the background information.
Tesso Nilo National Park is a national park in the Riau Province, Sumatra, Indonesia. The Indonesian government declared it to be a national park and key conservation area (of about 38,000 hectares) in July 2004. The area was later expanded to around 83,000 hectares in October 2009.
The area suffers from encroachment and deforestation. EoF investigated the supply chain of illegally grown FFB inside or near Tesso Nilo National Park and Bukit Batabuh Tiger Corridor, both facing rapid deforestation.
(1) EoF report on 19 mills that could potentially be receiving illegal oil from inside or near the national park. Out of the 19 mills, 14 mills are listed as Musim Mas suppliers.
- PT Berlian Inti Mekar Rengal (BIM)
- PT Citra Riau Sarana 1
- PT Citra Riau Sarana 2
- PT Citra Riau Sarana 3
- PT Gemilang Sawit Lestari
- PT Inti Indosawit Subur Ukui 1
- PT Indi Indosawit Subur Ukui 2
- PT Makmur Andalan Sawit
- PT Mitra Unggul PUsaka Segati
- PT Peputra Supra Jaya (PSJ)
- PT Sumbar Andalas Kencana Muara Timpeh
- PT Sawakar Sawit Raya
- PT Tri Bakti Sarimas 1
- PT Tri Bakti Sarimas 2
The NGO coalition called upon major Palm Oil companies to conduct comprehensive monitoring to cease purchase from suppliers located in the national park.
(2) There are 14 suppliers (linked to known supplier groups) identified by EoF that purchased illegal FFB from Tesso Nilo from January – June 2017. Out of the 14 suppliers, two suppliers are listed as Musim Mas’ suppliers. The two suppliers are:
1) PT Gemilang Sawit Lestari
2) PT Makmur Andalan Sawit (MAS)
All stakeholders (local communities, local governments, etc.) need to be involved in the planning for forest protection. In the long term, the plan will also need to include social and other environmental considerations.
We do not purchase any FFB directly from the area mentioned in the report. We engaged 14 companies/ mills which are mentioned in the report to seek clarification on the allegations.
PT BIM replied that they do not have illegal sourcing policy in place.
PT PSJ acknowledged that there is FFB from the listed truck in the EoF report that went to their mill.
We followed up on the clarification provided by suppliers and planned for field verification in suppliers’ mill with third-party consultants.
02 June 2016
We had a multi-stakeholder meeting with EoF, WWF, and other Palm Oil majors in Singapore. The main points of the meeting were: third-party monitoring should be implemented to remove illegal FFBs from the supply chain, traceability efforts should lead to improved sustainability standards, and a task force, headed by the Indonesian government, EoF and WWF, would be established to address illegal farming and communities in the park.
28 July 2016
We had a multi-stakeholder meeting in Jakarta to follow up with the meeting in June.
10 August 2016
MM conducted a mill verification on PT BIM mill and the assessor cannot find the proof that they source from the protected area (Bukit Batabuh)
15 August 2016
A task force involving the Indonesian government and stakeholders was formed. The Tesso Nilo task force is headed by EoF and WWF. It is a multi-stakeholder programme involving government officials, the private sector and NGOs aiming to identify a solution to the issue of deforestation in the national park.
We conducted a mill assessment on PT PSJ. During the mill assessment, the mill management showed their effort to prevent the occurrence by conducting daily checks on incoming FFB, requiring every truck to state the source of the FFB. They also blacklisted the illegal FFB truck that sourced from the protected area.
21 November 2016
We attended a multi-stakeholder meeting in Jakarta, together with the officials from the central government in Indonesia.
We sought clarification from PT MAS regarding the truck that EoF team found sourcing FFB from the Tesso Nilo National Park.
We reduced our sourcing volume from the original 14 mills to five mills, as part of our Controlled Purchase process for this grievance.
We met up with stakeholders from WWF, EoF and the other Palm Oil companies mentioned in the report in Jakarta.
As a follow-up from July 2018’s meeting with stakeholders (WWF, EoF and the other Palm Oil companies), we continue to uphold our commitment on not receiving illegal palm fruit from the Tesso Nilo ecosystem. We will be supporting WWF’s upcoming initiatives in the Tesso Nilo landscape, via various measures, including through our membership in the Fire Free Alliance.
We have conducted Traceability to Plantation (TTP) training and exercise at PT MAS and PT BIM to map the FFB source, understand the supply chain profile, and identify the sourcing risks to the mill. The TTP has started in each mill by their management in late September 2018.
We signed on an agreement with WWF team to assure our commitment to the NGO ‘s plan for Tesso Nilo. There is a meeting scheduled in January 2019.
Currently, the suppliers in our supply chain are not linked to Tesso Nilo and Bukit Batabuh Tiger Corridor. While a few cases of sourcing from the affected areas have occurred, the suppliers have since socialised their purchasing requirement to FFB suppliers, conducted field investigations of their FFB sources and blacklisted errant FFB suppliers.
We believe that the solution involves a landscape-level approach with different stakeholders who can collaborate to achieve an impact on the ground. The Tesso Nilo landscape is one of our priority landscapes for our vision of transformation. We have been participating in the Tesso Nilo task force since 28 July 2016.
We conducted field verification on five suppliers’ mills which were mentioned in the report. Based on the sampling checking method, our suppliers did not source FFB from the conservation area.
To revitalise Tesso Nilo, the Indonesian government plans to relocate the Smallholders from the Tesso Nilo area to another area under the land-reform programme. The government will provide land for farmers inside Tesso Nilo to relocate and farmers who have cultivated land for 12 years are allowed to harvest their crop until one cycle of planting is over. To find out more, please click here.
PT MAS confirmed that the truck does not supply to their mill. They have assured us that since our last engagement, they have surveyed all their FFB suppliers and taken GPS coordinates. They sought the assistance of the department of the forestry and environment to assess if these plantations are located inside Tesso Nilo National Park or any forest area. We will be following up with PT MAS on their implementation and strengthen their procedures for traceability.
On the other hand, PT PSJ and PT BIM that was mentioned in the 2016 EoF report were not mentioned in EoF 2018 report.