Thursday, May 21, 2015

Palm traceability sector (update 3a): GAR/Sinar Mas back in NGO focus, TFT suspends Golden Agri takes (and hours later a new chief sustainability officer is appointed for the plantation giant - Agus Purnomo)


21 May 2015: TFT suspends Golden Agri takes (and hours later a new chief sustainability officer is appointed for the plantation giant - Agus Purnomo)
 
Key issues and questions arising from Golden Agri / PT Smart's present situation:
  • Despite innovative industry attempts to promote traceability as a more inclusive solution (versus RSPO which struggles to include small producers and independent smallholders) while heightening key pledges such as "no deforestation, no peat and no exploitation," recent events raise the question of whether producers can live up to promises ("hastily made" according to many key industry players). 
  • Is palm oil entering a renewed phase of boycott risks? At the SIIA Singapore Dialogue, several IPOP members sat on a panel where Wilmar made a public pledge that it would (if told by other IPOP members) stop buying from any "errant suppliers" who were unable to make the necessary upgrade moves (and if it found such, it would stop buying; tell its fellows and request they would do likewise). Other panelists suggested more focus on constructively working with suppliers for improvement rather than boycott. If agreed, the IPOP "supplier boycott" proposal should give some teeth to the group. But it seems that IPOP members are not clear of the boycott risk themselves; with Golden Agri, a lead member itself now facing RSPO censure and TFT suspension.
  • Many industry players regard the shift to TFT B2B traceability as part of a processor-trader led move to find a more business-ready solution (that now seeks to shift the centre of gravity to refinery "supply sheds"; away from the RSPO mill and supply base P&C and RSPO's relatively costly physical supply chain SCCS outlook). The palm oil supply chain has since the mid 2000s been spending time and effort via NGO service providers, auditors and their newly established sustainability teams.
  • Industry watchers have been concerned about how widely known implementation gaps among the top highly rated traceable plantation groups will be treated by the broader NGO sector. Clearly, business life is hardly straight forward and the current issues suggest that there is no place for over-confidence and complacency while using new solutions. It seems we are entering a "third wave" where social issues and implementation will be primary - but have the big plantation groups put in enough resourcing to upgrade their implementation efforts to their pledges?  
Some background on IPOP group here: Tuesday, October 7, 2014 Indonesia Palm Oil Pledge (IPOP) http://khorreports-palmoil.blogspot.com/2014/10/indonesia-palm-oil-pledge.html. At the SIIA dialogue we had a useful chat with a Catapult Campaigns staffers who confirmed their key role in the New York Declaration and IPOP. On the risk of large dominant players establishing boycotts on smaller suppliers (raising question on economic interest suppression), there was no answer. A key consideration is on campaign advocacy efficiency and impact.

News link:

Golden Agri takes another hit as sustainability guru suspends its membership by Philip Jacobson May 20, 2015; The charity that Indonesia's Golden Agri-Resources has enlisted to devise and implement its zero-deforestation and community-engagement commitments suspended its cooperation with the palm oil giant yesterday, following "several breaches" of the policies they had designed together, according to The Forest Trust (TFT), which helps companies run responsible supply chains. A few hours after TFT announced the suspension, Singapore-listed Golden Agri said in a statement that its chief sustainability officer, Peter Heng, had resigned "to pursue new career opportunities." His replacement is Agus Purnomo, who has headed one of Golden Agri's Indonesian subsidiaries, Sinar Mas Agro Resources and Technology (Smart). Smart's own subsidiary, Kartika Prima Cipta, became the subject of a formal complaint against its operations last year after Golden Agri filed to expand its plantations in 18 of its subsidiaries including Kartika Prima, despite evidence that Kartika Prima had taken community land without residents' informed consent, failed to properly conduct a high-conservation value (HCV) assessment and more. The grievance was lodged by the Forest Peoples Programme (FPP), a UK-based NGO, with the Roundtable on Sustainable Palm Oil (RSPO), the industry's largest voluntary certification scheme. Though TFT was vague in its announcement, the suspension is almost certainly a response to what is apparently seen as Golden Agri and Smart's lackluster handling of the RSPO complaint, which takes on additional importance because Kartika Prima is piloting Golden Agri's sustainability commitments. The RSPO upheld the complaint in March and earlier this month prohibited Golden Agri from "acquiring or developing any new areas" pending its resolution.... Read more: http://news.mongabay.com/2015/0520-jacobson-tft-suspends-golden-agri.html#ixzz3aj9U4zFv


16 May 2015: It's not plain sailing for plantations who've gone in with the "second wave" of heightened "three nos" on peat, deforestation and exploitation

It's not plain sailing for plantations who've gone in with the "second wave" of heightened "three nos" on peat, deforestation and exploitation. Sector risk is of a "third wave" of rather tough to resolve social issues, which may be heightened due to the HCS / high carbon stock regimes coming into play.

The Roundtable on Sustainable Palm Oil (RSPO) has prohibited Golden Agri-Resources (GAR), one of its most prominent members, from "acquiring or developing any new areas" pending the resolution of a formal complaint against the palm oil giant in Indonesia's West Kalimantan province.  The decision by the RSPO, the world's largest voluntary certification scheme for palm oil, is a stern directive from an organization that has been criticized for failing to take action against companies that flout its standards....  Read more: http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj<<a%20href=>">http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj

16 Jan 2014:

Khor Reports comment: Plantation partnership deals with some NGOs does not preclude good implementation and monitoring by other NGOs. GAR/Sinar Mas had faced boycotts and enlisted TFT-Greenpeace to help (Wilmar is now also signed up on TFT-Greenpeace HCS Approach and other principles). Now, plantation planners should prepare for larger set-aside areas for their new plantings.

The latest news on GAR from a study by Forest Peoples Program / FPP (see news links) highlights some problems of high carbon stock (HCS)/social implementations of the new policies of TFT-Greenpeace for GAR. GAR said, “We thank FPP for their additional findings which have assisted our own full field audit of PT KPC, conducted in partnership with The Forest Trust.” Separately, APRIL and RGE are under pressure from Greenpeace.
News: http://www.eco-business.com/news/golden-agri-april-under-fresh-scrutiny-unsustainable-practices/ 


Wednesday, May 20, 2015

ESG / socially responsible investing (update 1a): RGE/APRIL and Roger Federer-Credit Suisse, Singapore Urges SEA Lenders to Better Screen Palm Oil Investment, Conservation International and Hollywood stars

Environmental and social governance or socially responsible investing is becoming an increasingly important topic as NGO advocacy campaigning on this steps up. We attended a recent talk in Singapore. Not surprisingly as the financial center for Southeast Asia, it was a core topic.

Read here: Singapore Dialogue (update 1a): SIIA / Simon Tay dialogue in Singapore centered on palm oil sustainability, Indonesia extends moratorium, ASEAN banks under WWF spotlight http://khorreports-palmoil.blogspot.com/2015/05/attended-siia-simon-tay-dialogue-in.html

Key recent reports include:
  • WWF: ASEAN regional banks and investors behind on Environmental, Social and Governance standards Posted on 13 May 2015; Singapore – A WWF report finds an alarming gap between regional ASEAN financial institutions and the environmental, social and governance (ESG) standards adopted by their international counterparts. 
  • TUK-Profundo report on top 25 tycoon-owned Indonesia palm oil groups and their financiers.
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20 May 2015: Singapore Urges SEA Lenders to Better Screen Palm Oil Investment; Roger Federer-Credit Suisse answer on RGE/APRIL funding query and it's also important to note that USA NGOs have become more active in the soft commodity sector of Southeast Asia with notable Conservation International campaign with Hollywood stars as spokespersons.

Singapore Urges SEA Lenders to Better Screen Palm Oil Investment By Erwida Maulia on 09:07 pm May 17, 2015; Singapore. The Singaporean government has called on financial institutions operating in Southeast Asia to exercise caution in funneling funds to palm oil producers, saying scrutiny on the sector continues to intensify with recurring problems in transboundary haze. Banks have acted as an important source of capital for the region’s palm oil industry, Singapore’s Minister for the Environment and Water Resources Vivian Balakrishnan said last week. Citing a 2010 report by BankTrack, he said lenders provided an estimated 24 percent of the total financing needed for the sector globally, with more than $50 billion invested in the Malaysian and Indonesian palm oil sectors alone during the decade prior to the release of the study. “The number has grown significantly since then. And this includes local sources of capital from within Indonesia and Malaysia,” Balakrishnan said in a keynote speech during the second annual Singapore Dialogue on Sustainable World Resources held last Wednesday. With the recurring issue of transboundary haze, he added, calls have intensified for companies and individuals “all the way down” the supply chain to be held accountable for deforestation — the main culprit behind recurring forest fires in Indonesia and haze affecting neighbors Singapore and Malaysia. “Due to the environmental scrutiny and the campaigns by environmental NGOs, banks have now also become part of the watch list,” the minister said. “And my plea to you, therefore, is please pay attention to this and remember the questions will be asked not only of the companies involved, but also of the financiers and the banks behind the industry.” Balakrishnan added that lenders and other financial institutions are now expected to be more responsible in conducting background checks on palm oil companies. It is not enough to merely see whether their clients would be able to pay their loans and interest rates, he said. How the companies derive their resources, their methods of production, the environmental, social and even political risks they face all must be assessed before banks decide whether they should invest in the business. “These [steps] have to become part and parcel of standard due diligence,” Balakrishnan said.......
http://thejakartaglobe.beritasatu.com/news/singapore-urges-sea-lenders-implement-eco-friendly-policies/

Roger Federer encourages rainforest campaigners 19.05.2015; Tennis star asks Credit Suisse to review the bank’s business relationship with Indonesian pulp and paper group RGE/APRIL (BASEL, SWITZERLAND / PULAU PADANG, RIAU, INDONESIA) Tennis star Roger Federer is calling on Credit Suisse, the Swiss bank, to review their business relationship with RGE/APRIL, an Indonesian pulp and paper group that is responsible for the wide-spread clearcutting of rainforests in the Indonesian province of Riau (Sumatra). Federer was approached last month by Isnadi Esman and Woro Supartinah, two Indonesian activists who had travelled to Switzerland to protest against a 50 million Euro loan granted by Credit Suisse to RGE/APRIL.  “I have learnt about your letter to me, outlining the difficult rainforest situation in Riau”, Federer writes to the Indonesian campaigners. “I take your concerns seriously. In response to your letter and as ambassador for Credit Suisse, I would like to emphasize that I will advocate for and have complete trust that they analyse such issues thoroughly, evaluate all options and that their decisions are well thought out.” The tennis star continues: “Additionally, I encourage you to continue the ongoing dialogue with Credit Suisse in order to minimize any sustainability issues and increase the common understanding.” On 24 April 2015, Isnadi and Woro informed Credit Suisse’s top management on RGE/APRIL’s conduct in Riau at the bank’s annual general meeting in Zurich. The bank’s Chief Risk Officer, Joachim Oechslin, promised to personally vet every potential future transaction with the Indonesian group. RGE/APRIL has been accused of illegal logging, peatland clearing and numerous human rights violations in their operations in Riau. Credit Suisse, together with a number of Chinese banks, are the Indonesian group’s main financial backers.
 http://www.bmf.ch/en/news/roger-federer-encourages-rainforest-campaigners


Conservation International. US NGO with Hollywood stars. Published on 5 Oct 2014: Julia Roberts, Harrison Ford, Kevin Spacey, Edward Norton, Penélope Cruz, Robert Redford and Ian Somerhalder all join forces to give nature a voice. Watch the films and take action at http://natureisspeaking.org Youtube vids here: https://www.youtube.com/results?search_query=conservation+international
  • Nature Is Speaking – Edward Norton is The Soil | Conservation International (CI) by ConservationDotOrg 317,373 views 1:26
  • Nature Is Speaking – Penélope Cruz is Water | Conservation International (CI)   by ConservationDotOrg  208,102 views 1:29 
  • Nature Is Speaking – Kevin Spacey is The Rainforest | Conservation International (CI)   by ConservationDotOrg  405,505 views 1:46 
  • Nature Is Speaking – Harrison Ford is The Ocean | Conservation International (CI)   by ConservationDotOrg  550,312 views 2:04 
  • Nature Is Speaking – Lupita Nyong'o is Flower | Conservation International (CI)   by ConservationDotOrg  439,588 views 1:36 
  • Nature Is Speaking – Robert Redford is The Redwood | Conservation International (CI)   by ConservationDotOrg  145,790 views
  • Nature Is Speaking – Ian Somerhalder is Coral Reef | Conservation International (CI)   by ConservationDotOrg  285,954 views 1:37 
  • Nature Is Speaking – Julia Roberts is Mother Nature | Conservation International (CI)   by ConservationDotOrg  1,380,592 views 1:59 
  • Nature Is Speaking: Tang Wei is Flower - 大自然在說話:湯唯聲演「花」| 保護國際基金會 (CI)   by ConservationDotOrg  5,727 views




Saturday, May 16, 2015

Singapore Dialogue (update 1a): SIIA / Simon Tay dialogue in Singapore centered on palm oil sustainability, Indonesia extends moratorium, ASEAN banks under WWF spotlight

Yesterday, I attended the Singapore Dialogue run by Simon Tay's SIIA. Full day event on 13 May 2015 (but I couldn't stay on past 5pm as had to catch a flight) with well-rounded selection of speakers, mostly on palm oil, but also from a Kalimantan 100,000 ha carbon bank project (but not REDD+ carbon market, but seeking funding from Clinton Foundation, Google etc) and also some insights from the timber/pulp & paper sector (including swamp forest timber). Lots of interesting insights on how NGO and big corporate thinking on palm oil sustainability is evolving. More on this in due course. I also had a fascinating chat on a timber eucalyptus-rice paddy margin project with over 1.5 million trees planted and more to come.

Banks such as OCBC and HSBC also reported on their approach to sustainability - good data insights revealed by HSBC and TUK# also pointed out some of their latest data on banks role in funding the oil palm tycoons. WWF has report out on ASEAN banks (Singapore, Indonesia, Malaysia) financing of forestry-linked agro-industries - which financial institutions have policies or not.

Singapore is picking up the role as regional center to work on sustainability issues. Singapore stock exchange (SGX) also looking to setting up policy for compulsory sustainability reporting (policy due end 2015). A few years ago, it was noticeable Singapore started to bring in the big NGOs to have an office in the island state. Notable at past conference were big US NGOs flew in, and now I see they have presence in Singapore. The palm oil sustainability issue has also evolved from Europe centric (Europe NGOs) to presence of US NGOs too, some with ties to Europe (well, UK), example Forest Heroes / Catapult links with TFT to work on Indonesia Palm Oil Pledge (6 members and seeking 6 more) - UN New York Declaration. Singapore clearly seeking a meaningful role in the regional sustainability markets; so far it has the Transboundary Haze Bill, and Vivian Balakrishnan, Minister for Environment spoke vividly of opportunities for Singapore-based companies including timber verification technology and more.

For palm oil sustainability: interesting updates on sustainability policy views updates from Greenpeace Indonesia, Wilmar and insights from many more.

However, not all NGOs agree with the current approach with UN links to corporate approaches: UN bodies putting smallholders' livelihoods at risk; http://www.foodnavigator-asia.com/Policy/UN-bodies-putting-smallholders-livelihoods-at-risk

And some argue that peat technical issues need to be reviewed, rather than just jettisoning the peat zones without more scientific consideration: Sarawak to host 15th International Peat Congress 2016; http://khorreports-palmoil.blogspot.com/2015/05/sarawak-to-host-15th-international-peat.html

And it's not plain sailing for plantations who've gone in with the "second wave" of heightened "three nos" on peat, deforestation and exploitation. Sector risk is of a "third wave" of rather tough to resolve social issues, which may be heightened due to the HCS / high carbon stock regimes coming into play.

The Roundtable on Sustainable Palm Oil (RSPO) has prohibited Golden Agri-Resources (GAR), one of its most prominent members, from "acquiring or developing any new areas" pending the resolution of a formal complaint against the palm oil giant in Indonesia's West Kalimantan province.  The decision by the RSPO, the world's largest voluntary certification scheme for palm oil, is a stern directive from an organization that has been criticized for failing to take action against companies that flout its standards....  Read more: http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj<<a%20href=>">http://news.mongabay.com/2015/0508-jacobson-rspo-complaint-gar-fpp.html#ixzz3a19AYBFj

#TUK-Profundo report on top 25 tycoon-owned Indonesia palm oil groups and their financiers:http://www.tuk.or.id/2015/02/kuasa-taipan-kelapa-sawit-di-indonesia/  and English language data summary paper here, http://www.tuk.or.id/wp-content/uploads/2015/02/Tycoons-in-the-Indonesian-palm-oil-sector-140828-Tuk-Summary.pdf and screenshot of page 13 with Figure 10 Banks providing loans to tycoon-controlled groups, 2009-2013and Figure 11 Banks underwriting share and bond issuances of tycoon-controlled
groups, 2009-2013:



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Links to financing of palm oil issues - key NGOs

WWF: ASEAN regional banks and investors behind on Environmental, Social and Governance standards Posted on 13 May 2015; Singapore – A WWF report finds an alarming gap between regional ASEAN financial institutions and the environmental, social and governance (ESG) standards adopted by their international counterparts.  Moreover, WWF reports a similar shortfall exists between regional financial regulations on responsible lending guidelines and corporate sustainability disclosure requirements as compared to their counterparts in Brazil, China, South Africa and Hong Kong. The report, released today at the Singapore Institute of International Affairs’s 2nd Singapore Dialogue on Sustainable World Resources, assesses to what degree regional capital providers are factoring sustainability issues into their lending and investment activities. It argues strongly for regional financiers to act in their own long-term interests and adopt ESG practices with urgency. It also calls for sustainable banking guidelines and more prescriptive sustainability disclosure requirements to be issued by regulatory authorities across ASEAN.

http://wwf.panda.org/wwf_news/?246790

Responsible palm oil financing and investment - WWF has developed a practical handbook to help financial institutions develop and implement a responsible palm oil financing and investment policy.
Many of the environmental problems caused by oil palm plantations can be avoided through the application of best management practices.  However, in many cases there are incentives for palm oil production that lead to the conversion of natural habitats, and misguided investments that support environmentally destructive forest conversion. http://wwf.panda.org/what_we_do/footprint/agriculture/palm_oil/solutions/responsible_financing/

Financial institutions & palm oil - What are some of the major global financial institutions doing about palm oil sustainability issues? And what risks are they reducing in the process? Commercial banks are sharpening their palm oil and timber risk assessment policies plantations. Why? To avoid negative environmental and social impacts of their lending and investment activities. Some have developed written statements on palm oil.
Bank Palm oil policy: 
- Rabobank Stand-alone palm oil policy
- HSBC Part of broader Forest Land and Forest Products Sector Guideline
Financial institutions that have joined the RSPO: ANZ Banking Group Ltd, Co-operative Insurance Society, HSBC Bank Malaysia Berhad, HSBC Indonesia, International Finance Corporation, Rabobank
http://wwf.panda.org/what_we_do/footprint/agriculture/palm_oil/solutions/responsible_financing/finance_palm_oil/

[Joint Statement] Briefing to banks and potential investors on the ongoing risks and outstanding social conflicts in the palm oil agribusiness sector. Briefing to banks and potential investors on the ongoing risks and outstanding social conflicts in the palm oil agribusiness sector: Golden Agri-Resources (GAR) bond offering... http://www.tuk.or.id/2015/04/joint-statement-briefing-to-banks-and-potential-investors-on-the-ongoing-risks-and-outstanding-social-conflicts-in-the-palm-oil-agribusiness-sector/?lang=en

Banktrack: http://www.banktrack.org/
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Links on the moratorium and SIIA/ Simon Tay's Singapore Dialogue

Indonesia extends moratorium on forest, peatland licences Posted on May 13, 2015, Wednesday
SINGAPORE: Indonesia, through a Presidential Instruction, has extended the moratorium on new licences for the utilisation of primary forest and peatland, which expires today.
Its Deputy Minister for Environment Degradation Control and Climate Change, Ministry of Environment and Forestry, Arief Yuwono said the instruction would enable the forestry ecosystem to recover while allowing improvements to be made on its governance.
“The instruction is an instrument which will help the government to focus actions on preventive measures on forest fires, controlling the fires and improve on the law enforcement.
“I believe the enacted instruction that has been approved today for the next two years, can continue to help combat the forest fires and issues relating to it that is causing the haze,” he told reporters on the sidelines of the 2nd Singapore Dialogue on Sustainable World Resources here today.
http://www.theborneopost.com/2015/05/13/indonesia-extends-moratorium-on-forest-peatland-licences/

Sustainability: A New Profit Driver?
Southeast Asia is one of the world’s largest producers of soft commodities including palm oil, rubber, and wood pulp. With Asia’s populations expected to soar, demands for these valuable resources are set to grow, leading to higher pressure on land use and climate change.
How can we cope with this explosive growth without jeopardising nature, public health and the way of life of some indigenous communities? How can we encourage more industry players – from plantation owners to processors and buyers – to address these concerns? What is the responsibility of those who trade and invest in these resources? Should governments in Asia pursue a bigger regulatory role collectively?
At the second Singapore Dialogue on Sustainable World Resources, the Singapore Institute of International Affairs will bring together leading voices from relevant stakeholders – including governmental and non-governmental organisations and companies- to present a business case for sustainable production, harvesting and financing. Centring on the mega market of Asia, the conference aims to feature the best practices in corporate sustainability, and foster more collaborations among forward-looking players.
http://sustainableresourcesdialogue.org/

Eye on Brazil: 5 million hectares of sustainable Amazon oil palm eyed, China $150 billion infra spend plan for Brazil, Petrobras' political corruption scandal

I was talking yesterday to Nicholas (Khor Reports research assistant) about Brazil oil palm. So since we've not really covered this here, I've gathered a few links below. It is fascinating to see China's infrastructure investment plans for Brazil to lower cost of bringing its product to market. That has been quite the bane of agriculture producers in Brazil interior. Brazil has identified a maximum 5 million hectares for oil palm, mostly for biodiesel purposes (imagine the cost savings of not having to transport diesel inland). How is this proceeding?

Also to note a key project is by Petrobras-Vale and the former is mired in a massive political corruption problems:
 

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China - Brazil $50 billion infrastructure investment plan

China to invest $50 billion in Brazilian infrastructure AFP By Damian Wroclavsky May 14, 2015 7:27 PM; Brasília (AFP) - China will invest $50 billion to help overhaul Brazil's aging infrastructure, Brasilia said Thursday, ahead of an official visit by Chinese Prime Minister Li Keqiang. "There are $50 billion in new projects," said Jose Graca Lima, Brazil's undersecretary of state, who oversees Asia and Oceania. "We shall have to await the end of the visit to expand upon which projects," he said, without providing details. Battling a fifth straight year of poor growth and mired in a bruising graft scandal involving state oil giant Petrobras, Brazil is seeking to revamp its sagging infrastructure ahead of next year's Rio Olympics, the first Games to be held in South America. A Brazilian government source said Brazil, Latin America's biggest economy, was determined to overhaul its dilapidated roads, railways, airports and ports ahead of the Olympics. The Chinese cash infusion is set to cover various sectors, including transport and energy. http://news.yahoo.com/china-invest-50-billion-brazil-212318218.html

China's ICBC, Brazil's Caixa to start $50 billion fund -sources Wed May 13, 2015 5:43pm EDT BRASILIA; May 13 Caixa Econômica Federal, Brazil's top mortgage lender, and the Industrial and Commercial Bank of China Ltd (ICBC) will create a $50 billion fund for Brazilian infrastructure investments, two government sources with knowledge of the plans said on Wednesday. The fund will be financed entirely by the ICBC, but both banks need to set up the regulatory framework to decide on the projects, said the Brazilian sources, who requested anonymity because the plan remains private. The plan will be formally announced when Chinese Premier Li Keqiang visits Brazil next week, they added. Caixa and ICBC will sign a memorandum of understanding during Li's visit in which the main terms for the fund will be outlined, the sources said. The governments agreed the fund will finance a railway link from Brazil's Atlantic coast to the Pacific Ocean in Peru as a way to reduce the cost of exports to China, said one of the sources. The fund will also finance a joint-venture to produce steel in Brazil. In January, Chinese President Xi Jinping pledged $250 billion in investment in Latin America over the next 10 years as part of a drive to boost resource-hungry China's influence in a region long dominated by the United States. Last year, China and Brazil agreed $7.5 billion in financing for Brazilian miner Vale SA, and the purchase of 60 passenger jets from planemaker Embraer SA. http://www.reuters.com/article/2015/05/13/caixa-ec-federal-icbc-fund-idUSL1N0Y41C020150513
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News links on Brazil oil palm topics

Oil palm set to take over from cattle ranching as the biggest threat to Brazil’s Amazon rainforest?  By Chris Lang 10 November 2014  Despite the reduction in deforestation in Brazil over the past decade, “the deforestation problem is far from solved”, notes Datu Research in a recent report about the beef industry and deforestation in Brazil. Datu describes the most effective tactic in reducing deforestation as “pressure from Western companies that demand deforestation-free supply chains”.  Demand for Brazilian beef is increasing. In August 2014, Russia announced a suspension of beef imports from several countries, including the USA, Australia, and the EU. Even before that announcement, demand was increasing. The Brazilian Beef Exporting Association reports that beef exports increased by more than 10% in the first eight months of 2014.  Datu argues that with the expansion of palm oil and other commodities, “it will become increasingly difficult to attribute deforestation to a specific commodity, making commodity-by-commodity enforcement methods less effective”. Instead, Datu and the Environmental Defense Fund (which paid for the report) suggest complementing deforestation-free supply chains with “enforcement and certification mechanisms focused not by commodity, but by jurisdiction”........ Datu is promoting a “zero net deforestation” approach, where forest can be cleared in some areas, “as long as other areas are sufficiently reforested to maintain net carbon density”. This raises the risk that biodiverse forests could be cleared, and “offset” by monocultures of fast-growing eucalyptus plantations.  Or even oil palm. Datu notes that the Brazilian government sees palm oil as a win-win opportunity: green fuel, green jobs, and a carbon sink “ideal for reforesting lost segments of the Amazon”. The report notes that REDD “has not yet been implemented at sufficient scale to have significant impact”. But with the jurisdiction approach, Datu writes that “the stage would be set” for REDD, “giving producers economic incentives”. In other words, payments from the sale of carbon credits that would allow greenhouse gas emissions to continue elsewhere.... http://www.redd-monitor.org/2014/11/10/oil-palm-set-to-take-over-from-cattle-ranching-as-the-biggest-threat-to-brazils-amazon-rainforest/

Oil Palm Changes Rural Culture in Brazilian Amazon By Fabiana Frayssinet; CONCORDIA DE PARÁ/MOJÚ/ACARÁ, Brazil , Nov 20 2013 (IPS) - Thousands of small farming families in Pará, in the Amazon jungle in northeast Brazil, have turned to the African oil palm as a new source of income, through contracts with biofuel companies. Strange bedfellows, which poses cultural and economic challenges. The small farm of Antônio de Oliveira smells like a mixture of oranges, black pepper and achiote or annatto (Bixa orellana), a shrub whose fruit is harvested for its seeds, which contain a natural dye that has coloured his farm red. “I didn’t know anything about oil palm…it’s really different to work with, it’s a queer bird, and complicated,” said Oliveira, who signed a contract with the biofuel company Biopalma three years ago to plant African oil palm (Elaeis guineensis), known as “dendê” in Brazil. Biopalma belongs to the Vale mining company, and has 60,000 hectares of oil palm of its own. In addition, it buys the output of small farmers through its Family Agriculture programme. The company plans to use palm oil to produce biodiesel to run the machinery and vehicles at its mines..... http://www.ipsnews.net/2013/11/oil-palm-changes-rural-culture-in-brazilian-amazon/

Petrobras, Vale May Join to Make Brazil Palm Oil and Biodiesel 'By'Stephan Nielsen 2:32 AM HKT  August 15, 2012 Aug. 14 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, and Vale SA are discussing a partnership to produce palm oil and biodiesel in the northern state of Para. Both companies are currently developing separate biodiesel projects in the state, Rio de Janeiro-based Petrobras said today in a statement. Petrobras’s biofuels unit said it will build a 230 million-liter (60.7 million-gallon) a year biodiesel facility in Para in its five-year plan for 2012-16, according to the statement. Vale plans to produce biodiesel from the palm oil in the region and mix it with regular diesel to fuel its Brazil operations from 2015, Petrobras said. http://www.bloomberg.com/news/articles/2012-08-14/petrobras-vale-may-join-to-make-brazil-palm-oil-and-biodiesel

Brazilian mining giant buys Amazon palm oil company  mongabay.com  February 03, 2011; Vale, a Brazilian mining giant, will buy palm oil producer Biopalma da Amazonia SA Reflorestamento Industria & Comercio, reports Bloomberg.  The deal, valued at $173.5 million, will enable the mining company to run more of its operations on palm oil biodiesel.  Vale began its palm oil push in 2009 when it formed a partnership with Biopalma. At the time Vale said the deal would save $150 million in fuel costs starting in 2014, with palm oil biodiesel replacing up to 20 percent of diesel consumption in the company's northern operations.  Biopalma has six oil palm plantations covering 18,400 hectares (45,467 acres) in Para, according to Vale. The company expects this to expand to 60,000 ha in 2013. The announcement comes less than a year after Brazil laid out plans to dramatically expand palm oil production in the Amazon. The initiative, called the Program for Sustainable Production of Palm Oil (O Programa de Produção Sustentável de Óleo de Palma), will provide $60 million to promote cultivation of oil palm in abandoned and degraded agricultural areas, including long-ago deforested lands used for sugar cane and pasture. ... http://news.mongabay.com/2011/0202-vale_biopalma.html

Brazil launches major push for sustainable palm oil in the Amazon by Rhett A. Butler, mongabay.com  May 07, 2010 "Sustainable" palm oil effort may pressure Malaysia and Indonesia on environmental performance of widely used vegetable oil. Brazilian President Lula da Silva on Thursday laid out plans to expand palm oil production in the Amazon while minimizing risk to Earth's largest rainforest, reports Globo and Terra Brasil. The plan, called the Program for Sustainable Production of Palm Oil (O Programa de Produção Sustentável de Óleo de Palma), will provide $60 million to promote cultivation of oil palm in abandoned and degraded agricultural areas, including long-ago deforested lands used for sugar cane and pasture. Brazilian officials claim up to 50 million hectares of such land exist in the country.... Although Embrapa, Brazil's agricultural research agency, has identified some 29 million hectares (71.6 million acres) of land suitable for oil palm cultivation in the Amazon and 2.8 m ha (6.9 m acres) outside the region — an area that would dwarf the 13 m ha of oil palm currently cultivated worldwide — Brazil says it will strictly limit development to less than 5 million hectares. The program specifically prohibits expansion at the expense of native forests, a major concern among environmental groups that have watched the relentless conversion of tropical forests across Malaysia and Indonesia for oil palm over the past 25 years. The palm oil program marks a new focus for Brazil, which currently produces about 110,000 metric tons of crude palm oil per year, a fraction of the amount produced by market leaders Indonesia (16.9 million metric tons in 2008) and Malaysia (15.8 m tons), according to the FAO. But Brazilian growers could see a boost in the international market if they can cost-effectively produce palm oil without driving direct or indirect deforestation, a concern that has dogged Malaysian and Indonesian producers. Brazil says it will rely on its world-class satellite monitoring system to ensure that expansion does not cause deforestation.  Read more at http://news.mongabay.com/2010/0507-amazon_palm_oil.html#Ap41ACGGl564lQL5.99


Sunday, May 3, 2015

Trade policy on palm oil: Fratini Vergano- WTO Environmental Goods Agreement does not include "green by definition, such as commodities...'; WHO Interim Report on Ending Childhood Obesity calls for taxes and marketing restrictions to tackle child obesity


Subject: Trade Perspectives by FratiniVergano - European Lawyers Date: 3 Apr 2015 02:54
Issue No. 7 of 2 April 2015
*             The Environmental Goods Agreement negotiations continue to progress despite the lack of participation by key countries
*             Trade facilitation developments to take place at the multilateral and regional levels by the end of 2015
*             WHO Interim Report on Ending Childhood Obesity calls for taxes and marketing restrictions to tackle child obesity
*             Recently Adopted EU Legislation

The Environmental Goods Agreement negotiations continue to progress despite the lack of participation by key countries; During the week of 16 March 2015, representatives from the 17 WTO Members that are currently taking part in the negotiations for an Environmental Goods Agreement (hereinafter, EGA), gathered in Geneva to participate in the fifth round of negotiations. These negotiations are directed to the conclusion of a new plurilateral agreement aimed at promoting green growth and sustainable development by liberalising trade in environmental goods..... EGA negotiations intend to build on the efforts made in the context of the Asia-Pacific Economic Cooperation (hereinafter, APEC), where, already back in 2012, its 21 Member Economies agreed on a list of 54 environmental goods for which they would reduce import tariffs to 5 percent ad valorem or less by 2015. The APEC list focusses on machinery and electronic products used for environmental protection (such as parts and components of various ‘green’ manufacturing items, products related to waste processing or disposal, and instruments for testing and analysing samples) and is based on 6-digit level HS codes (see Trade Perspectives Issue No. 14 of 11 July 2014). Apart from its limited coverage, the APEC list appears to be of limited accuracy, to the extent that it includes machinery and high-tech goods that, although designed for environment-friendly uses, may not necessarily be the result of an environment-friendly production process. In order to ensure that the list of covered products under the EGA does not suffer from the same shortcomings as the APEC list, it appears necessary that additional criteria (possibly relating to the very products’ sustainability) be established.........The EGA will apply on a most-favoured nation (i.e., MFN) basis, meaning that all WTO Members (including those which did not participate to the negotiating process) will benefit from the agreed tariff reductions once a ‘critical mass’ of WTO Members has agreed to participate. Negotiations were triggered in July 2014 by 14 WTO Members (i.e., Australia, Canada, China, Chinese Taipei, Costa Rica, the EU, Hong Kong China, Japan, New Zealand, Norway, Republic of Korea, Singapore, Switzerland and the US). As of March 2015, 3 more WTO Members (i.e., Iceland, Israel and Turkey) have joined the negotiations, and are, therefore, in a position to drive the process.
The fifth negotiating round reportedly concluded with a compilation of the proposals put forward by most EGA participants on the products that should benefit from duty-relief. In total, countries have proposed that the EGA cover around 600 tariff lines
, divided into a number of categories (relating to, inter alia, air pollution control, waste management, environmental remediation and clean-up, noise and vibration abatement, cleaner renewable energy, energy efficiency and environment monitoring assessment). In practice, these categories include goods as diverse as bicycles, windmills, solar panels, LED monitors, hydro-electric generating equipment, isolation material, water treatment chemicals, and advanced products for waste management and air pollution mitigation. Against this background, it is, at the very least, surprising that the proposed goods do not include goods that are ‘green’ by definition, such as commodities (e.g., palm oil, soybeans, sugarcane and rapeseed) that are available in nature and which can be used, inter alia, for renewable energy production (such as biofuels, which provide for substantial emission reductions when compared to fossil fuels)...........

WHO Interim Report on Ending Childhood Obesity calls for taxes and marketing restrictions to tackle child obesity; In March 2015, the World Health Organisation (hereinafter, WHO) released an Interim Report through its Commission on Ending Childhood Obesity, which calls for taxation and restricted marketing of ‘unhealthy’ foods and drinks to children, in order to help cut childhood obesity. The purview of ‘unhealthy’ foods includes foods that are high in saturated fats, trans fats and salt, as well as sugar-sweetened non-alcoholic beverages and energy-dense, nutrient-poor foods. The WHO Report outlines potential policy options that governments could consider through fiscal policies (such as taxes to reduce the intake of ‘unhealthy’ foods and sugar-sweetened non-alcoholic beverages), the increased intake of healthy foods, and the promotion of physical activity in children and adolescents. The WHO Report further indicates that governments could also take action to implement restrictions on the marketing of ‘unhealthy’ foods to children and adolescents.
According to the WHO Report, addressing childhood obesity requires attention to both developmental (i.e., life-course) and environmental considerations. With respect to the latter, important factors include exposure to inappropriate infant and young child feeding, and the influence of the marketing of ‘unhealthy’ foods directly to children.
The WHO considers that no single intervention can halt the rise of the growing obesity epidemic. Therefore, actions that address both the so-called ‘obesogenic’ environment and developmental factors are required.........

Friday, May 1, 2015

The Corporate Capture of Sustainable Development by Leslie Sklair

Why sustainability doesn't really work?

The Transnational Capitalist Class and the Discourse of Globalization By Leslie Sklair Cambridge Review of International Affairs 2000;

The Corporate Capture of Sustainable Development......Thus, the negative environmentalism that had forced industries to respond to specific challenges on pollution and toxic hazards gave way to more general conceptions of ˜sustainable growth' and ˜sustainable development', entirely compatible concepts in the corporate analysis. Corporate environmentalism, therefore, both as a social movement and as a discourse, co-existed easily with this moderate conception of sustainability. From this powerful conceptual base big business successfully recruited much of the global environmental movement in the 1990s to the cause of sustainable global consumerist capitalism. This achievement is an object lesson in how dominant classes incorporate potential enemies into what Gramsci called new historical blocs.... The sustainable development historical bloc began in earnest in the period leading up to the Earth Summit in Rio in 1992. The close relationship between Maurice Strong, the virtual CEO of the Earth Summit, and Stephan Schmidheiny is a matter of public record. The environmental arm of the ICC, the Business Council for Sustainable Development, represented big business in Rio and was successful in keeping any potential criticism of the TNCs off the official agenda. There was, as a consequence, formidable corporate input into the formation of the UN Commission on Sustainable Development (CSD), the major institutional result of UNCED..........Sustainable consumption and production are essentially two sides of the same coin. Sustainable consumption addresses the demand side, examining how the goods and services required to meet peoples' needs and improve the quality of life, can be delivered in a way that reduces the burden on the Earth's carrying capacity. The emphasis of sustainable production is on the supply side, focussing on improving environmental performance in key economic sectors such as agriculture, energy, industry, tourism and transport........From the ecological point of view this approach is based on a series of fallacies. The first is the anthropocentric approach itself, where sustainability for people and societies takes precedence over sustainability for the planet. The second fallacy is the idea that 'sustainable consumption' and 'sustainable production' are essentially two sides of the same coin, For ecologists, the real issue is not 'sustaining' production and consumption, but reducing them absolutely....The combination of the discourse of sustainable development with that of national and international competitiveness provides powerful weapons for the transnational capitalist class. Globalization is not a 'Western' but a globalizing capitalist ideology, whose discourse and practices are necessary to negate the growing class polarization and ecological crises characteristic of this latest stage in the long history of capitalism.... https://www.globalpolicy.org/globalization/defining-globalization/27656-the-transnational-capitalist-class-and-the-discourse-of-globalization.html

The Transnational Capitalist Class by Leslie Sklair ISBN: 978-0-631-22462-4 352 pages October 2000, Wiley-Blackwell; Description: The Transnational Capitalist Class provides theoretically informed empirical research to explain the process of globalization from the viewpoint of the corporations themselves. Through personal interviews with executives and managers from over eighty Fortune Global 500 corporations, Sklair demonstrates how globalization works from the perspective of those who control and oppose the major globalizing corporations and their allies in government and the media. Sklair's unique approach brings a fresh perspective to what has become a key debate of our time
http://as.wiley.com/WileyCDA/WileyTitle/productCd-0631224629,subjectCd-GE2B.html

Democracy and the Transnational Capitalist Class By LESLIE SKLAIR, ANNALS, AAPSS, 581, May 2002; ABSTRACT: While globalization means many different things to
many different people, there is growing consensus that capitalist globalization is its most powerful contemporary form. This article argues that capitalist globalization, and thus effective power in the global system, is increasingly in the hands of a transnational capitalist class (TCC) comprising four fractions: those who own and control the major corporations and their local affiliates, globalizing bureaucrats and politicians, globalizing professionals, and consumerist elites. The TCC engages in a variety of activities that take place at all levels, including community, urban, national, and global politics, and involve many different groups of actors. Two sets of questions are addressed: (1) What forms do these activities take? and (2) Do they enhance or undermine democracy? The role of the TCC is analyzed through brief case studies on Codex Alimentarius and the global tobacco industry.... http://www.uni-muenster.de/PeaCon/global-texte/r-m/144sklair.pdf