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Indonesia’s Salim Ivomas Withdraws RSPO Membership

PT Salim Ivomas Pratama Tbk Withdraws RSPO Memberships

JAKARTA (TheInsiderStories)PT Salim Ivomas Pratama Tbk (IDX: SIMP), which is engaged in palm oil production in Indonesia, has withdrawn from the Roundtable on Sustainable Palm Oil (RSPO) membership. The decision has been taken followed by failing to address serious problems with its production standards and company plans to improve standards of compliance with the inRSPO environment and workforce.

Through the letter dated Feb. 8, unit of giant food producer PT Indofood Sukses Makmur Tbk (IDX: INDF), expressed its official position to left RSPO membership. The RSPO then responded by approving the SIMP request on Feb. 28, ending a two-year investigation into practice.

In November 2018, the RSPO ordered Salim Ivomas to take corrective action to address more than 20 violations of its standards, requiring SIMP to submit a plan to resolve the issue until Feb. 8. Instead, at the end of January SIMP said to would like withdraw from the RSPO system.

Through its letter dated Feb. 8, SIMP was disappointed with the attitude of the RSPO, which had rushed to impose a sentence without considering the company’s commitment to improve compliance and fulfill the legal requirements proposed by RSPO.

In addition, RSPO didn’t take note or include its comments on the draft audit report, including documentary evidence to verify its compliance with Indonesian Regulation.

According to the Salim Ivomas Group Head of the Sustainability Muhammad Waras, the Compliants Panel have not replied to its question to explain the material inconsistency in finding between the verification audit carried out from June 4 to 7, 2018, and the previous 23 RSPO accredited audit as mentioned in its previous correspondence.

“We have been repeadly denied the opportunity to have a formal meeting with the CP to discuss the draft audit report and our comments,” he said in an official statement.

Then, on Feb. 26, SIMP highlights the main findings of the RSPO verification audit of cases submitted to its subsidiary PT PP London Sumatra Indonesia Tbk (IDX: LSIP).

Salim Ivomas stated that the company has an adequate health and safety policy as well as operating and procedural manuals and generally complies with the requirements for Personal Protective Equipment  and is compliant in compliance with Government regulations regarding periodic medical tests for workers.

In addition, the company has shown a significant increase in treatment of freelancers and management complies with minimum wages for permanent workers and there is no evidence of child labor or child exploitation in one of three plantations or factories and adheres to non-use of paraquat as an herbicide.

In fact, based on the audit report issued for the Turangie plant and its supply base, which was received on Feb. 13, it’s ensured that the company fully complies with the RSPO Principles and Criteria for Sustainable Palm Oil Production and Supply Chain Certification Standards.

The company was even very surprised and disagreed with the findings of the audit conducted from June 4-7, 2018, because the RSPO had previously conducted an audit since the issuance of the initial alleged report in June 2016.

Based on 23 RSPO audits, all factories in North Sumatra remained RSPO certified, because there were no material findings to support these allegations, and the company had implemented all Non-Conformities arising from the audit.

Salim Ivomas questioned, could the RSPO provide an explanation of the inconsistency of the material in the findings between the verification audits conducted on June 4-7, 2018, and 23 audits previously mentioned.

Therefore, the producer firm to resign from RSPO membership because of disappointment with the way CP handled the case of London Sumatra.

This Salim Ivomas’ pullout is certainly a separate blow for RSPO because the company is the fourth largest company in RSPO membership, which balances increasing pressure to improve environmental and social standards in the palm oil supply chain with the body’ voluntary membership policy.

RSPO Chief Executive Datuk Darrel Webber said he was concerned about the attitude of the company that took a withdrawal policy from the membership of the RSPO.

But, he acknowledged that RSPO has rules that must be obeyed by each member. Therefore, the decision of the CP that the rules have been violated, then the company’s membership must be terminated.

Vice versa, Indofood said it was very disappointed with the CP’s process and decision, and insisted that many of the original allegations surrounding the employment conditions on oil palm plantations were false.

“Therefore we have decided to focus our journey and sustainability practices on the mandatory implementation of Indonesia’s Sustainable Palm Oil (ISPO) standard,” company’ senior officer cleared.

Written by Daniel Deha, Email: daniel@theinsiderstories.com