Eagle High and Rajawali exposed for unsustainable palm oil cultivation

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Eagle High Plantations which is owned by the Peter Sondakh controlled Rajawali Group has not obtained its Roundtable on Sustainable Palm Oil (RSPO) certification despite publicly stating that it is working towards obtaining its first certification by 2016.

 

Additionally, Eagle High is also not following the mandatory Indonesian Sustainable Palm Oil (ISPO) Initiative, which was developed with the support of the United Nations Development Programme (UNDP) to help ensure that economic growth becomes sustainable and empowers the poor and the marginalized population of Indonesia. It has been reported that Eagle High, who is one of the larger producers of palm oil in Indonesia has selfishly disregarded the regulation for its own short-term profits.

 

Eagle High’s blatant disregard for these regulations will not bode well for them as rising concerns on deforestation and human rights violations has lead the European Union to pass a regulation in April 2017 stating that it will ensure that palm oil imported into the European Union come from sustainable sources and to only import sustainable palm oil after 2020. If Eagle High does not obtain its RSPO and ISPO certification soon, it will lose its entire European revenue stream, the loss of which will be to the tune of hundreds of millions of Euros.

 

A report alleging that PT Varia Mitra Andalan, a subsidiary of Eagle High has continued to clear high carbon stock forests up to March 2015, which is in breach of the sustainability commitments established by Cargill and Golden Agri-Resources (GAR), who are also signatories of the Indonesian Palm Oil Pledge (IPOP), a corporate commitment to eliminate deforestation from supply chains, has led to both companies launching an investigation into Eagle High’s practices. It is reported that both companies buy significant volumes of product from Eagle High and the loss of revenue from these companies will send a strong confirmation of Eagle High’s disregard for sustainable practices. This would further deter other large corporations from dealing with Eagle High for fear of backlash from the authorities and the public.

 

A New York Times report has stated that global warming concerns have put pressure on banks to not finance companies with unsustainable practices. Many banks have also developed sustainability pledges that specifically mention deforestation, which, moving forward would deter these banks from lending money to companies who do not have sustainable practices, such as Eagle High.

 

More alarmingly, the report names the Rajawali Group in particular, stating “Rajawali’s plantations have been accused by environmental and labour groups of deforestation and illegal burning. Indonesia is one of the world’s biggest palm oil producers, and forestry loss there and elsewhere ranks as one of the biggest single contributors to global warming.” The New York Times report also states that the Rajawali Group is accused of extensive forest and peatland destruction, illegal burning, use of child labour and the use of force against workers at plantations under its control (which has also resulted in the death of an employee of Eagle High).

 

Locally, a due diligence report by KPMG in relation to the Eagle High, which was sighted by IPOM, has also highlighted that as at March 2015, 60% of Eagle High’s trade payables were past due and key among these payables are amounts due to the PLASMA cooperatives for purchase of FFB, thereby denying the farmers a right to their hard-earned money. Despite these cashflow issues, interest free advances amounting to USD26 million was given to companies related to the Rajawali Group – the repayment of which may not be forthcoming according to the Management of Eagle High.

 

These various reports prove that Eagle High and Rajawali are run/owned by money hungry individuals whose only concern is lining their already fat pockets by any means necessary, regardless of how their practices impact the world and do not think twice about cheating their employees/stakeholders of their hard-earned money.

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