Major Islamic financier singled out for deforestation in Indonesia

New research into the activities of a major Malaysian financial institution has raised questions over the efficacy of major brands’ policies against buying from firms engaged in deforestation. In a recent report by climate coalition Chain Reaction Research, Lembaga Tabung Haji, whose publicly traded palm oil firm TH Plantations controls 32 estates in Indonesia and Malaysia spanning 1,600 square kilometers (620 square miles), was accused of actively clearing forest and peatland. The report’s authors amassed evidence that THP had cleared hundreds of hectares of forest at its PT Persada Kencana Prima and Hydroflow Sdn Bhd plantations in 2017 in violation of some of its buyers’ No Deforestation, No Peat, No Exploitation (NDPE) policies. The logging had already led to a suspension by palm oil giant IOI and engagement by Wilmar, it notes; moves that have managed to halt new deforestation at the sites. THP also supplies other major brands, including AAK, ADM, Musim Mas, Olam, Nestlé and Unilever. But the report suggests that Lembaga Tabung Haji’s PT Synergy Oil Nusantara (PT SON) is also an active “replacement” buyer for two firms that were suspended by other traders for NDPE violations, raising the prospect that companies could still suffer reputational risk if they buy palm oil from the Malaysian company. The Chain Reaction Research report singles out Felda Global Ventures (FGV), an agri-commodities company and joint-venture partner with THP, as being particularly at risk. FGV did not respond to a request for comment from Mongabay. A Wilmar spokesperson said that many…

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