PT Ladang Sawit Mas (LSM) is an oil palm plantation company under the ownership of Bumitama Agri.
LSM was awarded its Plantation Business Permit in May 2006, before having obtained a Location Permit (in June 2006) and long before it had obtained an Environmental Permit (on 27th January 2010). Further, the total land bank specified in the Location Permit (8,300 hectares) is smaller than the land bank specified in the Plantation Business Permit (9,300 hectares).
According to LSM’s 2008 Environmental Impact Assessment (EIA) report, 8,075 hectares, or nearly the entire concession area, is covered with natural forest. The EIA failed to note the proximity of the LSM concession to the Sentap Kancang Forest Reserve and the Gunung Tarak Forest Reserve and the Gunung Palang National Park. This was a serious oversight, especially given the significant population of orangutans both within the forest reserves and in the buffer zones surrounding them, which fall within LSM’s concession area.
In May 2012 LSM commissioned subcontractors to begin clearing land within the concession area it had acquired near the Sentap Kancang and Gunung Tarak Forest Reserves and the Gunung Palang National Park in West Kalimantan.
In March 2013, International Animal Rescue and BKSDA (Agency for Natural Resources conservation) Ketapang rescued four orangutans from land clearing sites in the Ladang Sawit Mas concession. Those orangutans were translocated, after the recommendation by LSM, to an adjacent area to LSM belonging to Bumitama (GMS area).
On 8th April, International Animal Rescue (IAR) and Friends of Borneo filed a formal complaint to the Roundtable on Sustainable Palm Oil (RSPO) against PT LSM (subsidiary of Bumitama Agri Group) about the violation of RSPO principle 5 and 7.
On April 18, 2013, in response to the RSPO complaint, Bumitama stated that it would not recommence operations in LSM before High Conservation Value/Social Impact Assessment studies were completed. However, the company failed to keep its promise: satellite imagery over the period May to September 2013 shows that more than 460 hectares of land – mostly peat swamp and forest – was cleared during this period.
On September 24 2013 – five months after the initial complaint filed by International Animal Rescue – RSPO reached an agreement with the company regarding planned improvements. RSPO and Bumitama issued a common joint statement where Bumitama committed to collaborate with IAR on monitoring the existence and conditions of orangutans in the concession area and compliance with RSPO’s New Planting Procedures. But, notably, the violations cited above occurred while the stated agreement was being negotiated, and appear to have escaped the notice of the RSPO, revealing Bumitama’s utter disregard for the authority of the RSPO.
Wilmar International is an important partner of Bumitama Agri. In 2011, Wilmar bought 56.8 percent of Bumitama’s total Crude Palm Oil (CPO) and Palm Kernel Oil (PKO) production.
Wilmar officials acknowledge that the company buys palm oil from Bumitama and say they are working to eliminate deforestation and exploitation from the company’s supply chain. Wilmar’s response to the Bumitama case will be a critical test of this claim.