IOI Group reaches settlement with Aidenvironment issues
KUCHING: IOI Corporation Bhd (IOI Group) has reached a settlement over the complaint raised by consultancy firm, Aidenvironment with regards to the group’s plantation estate in Ketapang, West Kalimantan in Indonesia.
IOI Group in a joint statement with Aidenvironment declared to have achieved agreement in closing the Ketapang complaint case.
These include overplanting by its subsidiary PT Berkat Nabati Sawit (PT BNS), and new planting procedure required by the Roundtable on Sustainable Palm Oil (RSPO).
To recap, IOI Group in a statement in October 2016 that it received a letter from the Indonesian Kementerian Lingkungan Hidup dan Kehutanan (KLHK) or Ministry of Environment and Forestry of Indonesia dated October 11, 2016.
The letter stated there was a change from non-forestry land to forestry land in December 2013 pursuant to the decision of the Minister of Forestry.
Following a re-survey, it was confirmed in September 2014 that out of a total area of 11,800 hectares of land applied for by PT BNS, there was an overlap with Danau Manis Mata Production Forest amounting to 1,638 hectares.
Thus, Aidenvironment and IOI Group’s joint analysis subsequently confirmed that the overlap comprises of 1,204 hectares (723 hectares of oil palm plantations and 481 hectares of other land) which was abandoned in year 2011 and another 434 hectares of land, cleared and planted between 2010 and 2014, was still managed by PT BNS during the joint field visit of September 2 to September 6, 2016.
In line with the instruction issued by KLHK, PT BNS will immediately abandon the 434 hectares until such a time as there are new Ministerial instructions regarding the said land.
On the new planting procedure by RSPO, a joint analysis of the chronology of land development confirmed that land development in its subsidiary PT Sukses Karya Sawit (PT SKS) and PT BNS which began in 2009, had straddled the RSPO new planting procedure (NPP’s) ‘cut-off date’ of January 1, 2010
As a result, IOI Group was required by RSPO to only comply with “on-going planting” NPPs.
The company noted that if it had agreed with Aidenvironment to follow the full NPP requirements, it would likely have revealed at a much earlier stage the noncompliances occurring at that time.
Thus, IOI Group said it regretted not having taken necessary actions to be in full compliance with RSPO’s rules at all times.
IOI Group agreed to settle the outstanding issues with Aidenvironment in view of the company’s commitment to break with the past.
“Aalthough IOI Group will certify PT BNS and PT SKS under the RSPO time- bound plan, it undertakes not to market the palm oil produced from PT BNS and the affected areas of PT SKS3 with the RSPO certification claims for the duration of one planting cycle,” it detailled in the statement.
In the meantime, Aidenvironment said it has raised all other matters with IOI Group for perusal and declared that it has no further standing issues with IOI Group related to the Ketapang case.
Thedeclarationhasbeenachieved with IOI Group, independent of RSPO’s decisions.
Hence, IOI Group said it will continue to disclose on progress after the declaration, along with other developments of interest to its stakeholders.