Response to

Kuala Lumpur, 24 May 2017 – We refer to the article titled “Sime Darby required to end any further HCS forest clearing” reported by on 23 May 2017.

It is correct that in 2012, Sime Darby Plantation (SDP) acquired PT ISLM, a 10,045 ha area with an approved “Izin Usaha Pemanfaatan Hasil Hutan Kayu Pada Hutan Tanaman Industri” from the government of Indonesia with a view to establishing rubber plantations.

PT ISLM was acquired from SLT Capital Pte Ltd and PT Entete Mining and not the Salim Group as reported.

It is correct that SDP has cleared land in the area, totalling 2,500 ha out of a total of 10,000 ha. An area of 1,800 ha has been planted. In accordance with our commitments under the Responsible Agriculture Charter (RAC), development of land for all crops, other than oil palm, will be in areas with low carbon stock from 2018. However land clearing in the Belitung area has already stopped.

The area in and around PT ISLM was logged over several years ago and there are ongoing illegal mining and timber extraction activities. There is also the issue of scattered encroachment for pepper and other food crops by the communities in the area.

Although the intended land use was for rubber plantations, SDP has applied assessment systems used by the Roundtable on Sustainable Palm Oil (RSPO) to ensure compliance with our internal sustainability policies and standards. These include:
  • An independent High Conservation Value (HCV). This HCV assessment was conducted in 2013 to determine the areas that would be excluded from development. It was established that 1,347 ha are of high conservation value.
  • Obtaining Free, Prior and Informed Consent from the local communities. From 2014 to 2016 SDP engaged with communities in the area to obtain FPIC. 
  • Conducting a high carbon stock analysis. In August/September 2016, SDP’s Research & Development team conducted a carbon stock inventory study based on existing methodology. It was determined that the area has an average carbon stock of about 67 tC/ha. Since the total carbon stock for rubber planting is established at about 80tC/ha, it is thus estimated that the area would be carbon positive after 25 years of planting.
SDP is closely monitoring developments at Belitung. Currently all HCV areas are being reassessed. Our internal teams are also conducting Land Use Change Analysis on the HCS areas and will submit our HCS assessments to the High Carbon Stock Secretariat for peer review and assessment.

SDP is also mindlful of the fact that 400 members of the local community are expecting to be gainfully employed by PT ISLM.

SDP will be pleased to engage further with all other interested stakeholders.
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