Eagle High Plantations which is owned by the Peter Sondakh controlled Rajawali is 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. ISPO, which is applicable to all oil palm growers in Indonesia, was developed to address industry sustainability at a national level.
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. Additionally, Eagle High Plantations 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.
Historically, palm oil exports to the European Union have fallen significantly since 2014. A major factor is the commitment by the Netherlands, which accounted for 60% of Indonesian and Malaysian palm oil imports in 2012, to only use certified sustainable palm oil, causing imports from the two countries to halve between 2012 and 2016.
Further in April 2017, a regulation was passed stating that the European Union will ensure that palm oil imported into the European Union come from sustainable sources and to only import sustainable palm oil after 2020. Eagle High’s blatant disregard for these regulations will not bode well for them as without the RSPO and ISPO certifications, it will lose its entire European revenue stream, the loss of which will be to the tune of hundreds of millions of Euros.
It is no secret that Eagle High’s practices have been marred in controversy due to its unsustainable palm oil cultivation practices, its blatant disregard for regulations in the name of short-term profits for its stakeholders, illegal burning, human rights violations and so on which has resulted in them not being able to obtain the relevant certifications.
Unless Eagle High drastically improves its practices to comply with these mandated standards, it will most likely lose its European revenue stream as developed countries are now focussing on purchasing only sustainable palm oil. This will result in Eagle High losing business to companies which are able to comply with mandated standards.