Non-compliant palm products from Mr. Mahmudin, a smallholder operating in the Rawa Singkil Wildlife Reserve (RSWR) area allegedly entered Wilmar’s supply chain through its supplier, PT Runding Putra Persada (PT RPP) via a Fresh Fruit Bunch (FFB) dealer CV Buana Indah (CV BI).

Wilmar does not source from CV BI. However, our supplier, PT RPP was allegedly sourcing from CV BI. Wilmar immediately initiated engagement with PT RPP when allegations of their non-compliant sourcing within RSWR was brought to our attention in September 2022.  According to the report, Mr. Mahmudin was operating illegally within RSWR and was supplying to PT RPP via CV BI. 

On 31 October 2022, RAN published additional information on the case titled “Major Indonesian Palm Oil Suppliers Falsely Deny Sourcing Illegal Palm Oil” on the issue linked to Mr. Mahmudin’s farm that allegedly extends beyond the boundary of the RSWR. 

A series of meeting and engagement with PT RPP was carried out thereafter. A field verification from 7 to 15 November 2022 has been carried out to verify the allegation and to support the development of an action plan to address the issues identified. The field visit concluded that Mr Mahmudin has a certificate of ownership (SHM) covering an area of 29 hectares. However, he has further claimed ownership of additional 4 hectares within RSWR which has not yet been allocated SHM. In addition, Mr Mahmudin’s FFB collection point also lacks adequate traceability mechanism to map the FFB that are sourced from the local community farms around Mr Mahmudin's farm. It has been confirmed that CV BI is indeed PT RPP’s supplier, which they have started sourcing since April 2022.

The outcome of the investigation and the action plan were discussed with RAN on 1 December 2022. The final field verification report has also been shared with RAN on 21 December 2022.

In March 2023, a verification field visit was undertaken to assess the progress of the action plan.  It was found that PT RPP has made improvements to the traceability system but the supply chain data collection at CV BI and the handover of 4 hectares of Mr. Mahmudin's land inside RSWR were progressing slower than expected. In order to accelerate progress to meet the action plan targets by June 2023, further assistance will be extended to PT RPP on its traceability programme and our team will engage with Mr. Mahmudin and CV BI in May 2023.  The full report is available here.  

In May 2023, a follow up field visit was carried out.  PT RPP has achieved 94% Traceability to Plantation (TtP) and its staff have been trained on the traceability system.  After a delayed start on the traceability mapping process due to unforeseen circumstances, Koltiva began the traceability work on CV BI’s and Mr Mahmudin’s suppliers in March and May 2023 respectively. Thus, Koltiva has revised timeline for 100% TtP to September 2023. During this visit, the field team also discussed with Mr. Mahmudin on the progress of the land release of the 4 hectares. 

In early June 2023, our team met with Balai Konservasi & Sumber Daya Alam, BKSDA (Agency of Conservation and Natural Resources) as the authority for management and monitoring of RSWR, and Balai Pemantapan Kawasan Hutan, BPKH (Agency of Forest Area Consolidation Center) as the authority for boundary marking of RSWR, with the aim to understand the management and monitoring of RSWR, and process of releasing land occupied by community within the RSWR. 

In June 2023, another follow up field visit was carried out.  Mr. Mahmudin was not available to meet with field team during this field visit.  The field team was later informed that Mr. Mahmudin was not willing to sign the commitment letter to release the 4 hectares. Consequently, PT RPP and CV BI have issued a statement on 13 July 2023 to exclude Mr. Mahmudin from their supply chain. With this latest development, Wilmar has also included Mr. Mahmudin on its list of “high risk” FFB supplier, where all Wilmar direct suppliers operating within the 50km radius of the Leuser Ecosystem will be notified on the development of this case. Mr. Mahmudin’s FFB will only be allowed to enter their supply chain when the case is resolved to our satisfaction. 

AA Sawit is not a supplier to Wilmar. Our supplier, Jernih Kemboja, however is implicated due to their association with AA Sawit.  

Wilmar immediately initiated engagement with Jernih Kemboja when allegations of deforestation at PTD 4882, 4085, 4963, 4118, 4177 and 4121  by AA Sawit was brought to our attention in July 2022. A field investigation was carried in August 2022 to verify the allegations. Our field investigation as well as LUCA analysis on their concession maps thereafter has confirmed that there is non-compliance to the No Deforestation commitment to the NDPE Policy.

Wilmar’s last purchase from this supplier was in September 2022.

As of October 2023, Jernih Kemboja has met all the requirements stipulated in our re-entry criteria. This includes their commitment to the development of a Recovery Plan for Non-Compliant Land Clearing to the NDPE policy at group level, for activity that has taken place from January 2016 onwards. Based on the detailed review of documentation, reports and a letter of commitment from Jernih Kemboja, the Wilmar Suspension Committee has given due consideration of this progress and lifted the suspension of Jernih Kemboja in October 2023. 

• Environmental degradation and deforestation activities;
• Violence and harassment against community members, through local police;
• Lack of Free, Prior, Informed Consent (FPIC) prior to development of land;
• Decent accommodation and facility for employees living in company housing; and
• Workers’ health and safety.

• A field visit report by an independent consultant;
• Evidence of engagements between RH and GW since 2017;
• Landowner consent forms to ascertain FPIC and identify cultural sites that require protection;
• Voluntarily written statements by a landowner, contents of which were further corroborated by a statement given by a local ward councillor;
• Correspondence between Gilford Ltd and the Royal Papua New Guinea (PNG) Constabulary;
• Board meeting minutes by landowner companies; and
• A mediated agreement between Gilford Ltd and a landowner company issued by the PNG National Court.

Wilmar immediately initiated engagement with IOI when the allegations were brought to our attention in June 2021. Full details of this case is available on IOI’s grievance list.

We understand that Finnwatch has engaged with IOI since August 2020, where they have informed IOI of several allegations highlighted by a grievance raiser on behalf of five workers, consisting of:

On 2 June 2023, RSPO Complaint Panel who investigated the case has dismissed the case.

For more information on RSPO’s deliberation, please refer to the case tracker. 

1. Mistreatment from the estate’s supervisor
2. Inconsistency in issuance of Personal Protective Equipment (PPE)
3. Not allowing workers to speak to auditors
4. Dissatisfaction regarding housing facilities
5. Disagreement in wage payments
6. Alleged payment of recruitment fees

Following this, IOI immediately formed an internal investigation team to address the allegations.

On 11 September 2020, IOI updated Finnwatch on the matter of mistreatment, issuance of PPE and the worker being disallowed from speaking to auditors. In the update, IOI included explanations on the regular issuance of PPEs, and that in IOI, there was no restriction placed on auditors with regards to who they choose to interview during audits. IOI also disputed the allegation that workers were not allowed to speak with auditors. IOI further acknowledged that there was an incident of mistreatment of a worker by an estate employee and clarified that action had been taken by IOI management against the employee in question.  

On 14 October 2020, IOI provided supporting documents, photos and videos from its internal investigations to Finnwatch on the issue of wage disagreement, and dissatisfaction regarding housing facilities.

On 13 November 2020, IOI informed Finnwatch that on the issue of illegal payments made during recruitment by the aggrieved workers, IOI had made several attempts to contact the person involved but was not successful.

On 16 December 2020, IOI presented its “Guideline for Providing Basic Amenities to Workers” which ensures uniform implementation of amenities provided to all estate workers, and a guideline on “Worker’s Work Verification”, which enables workers to verify their working hours. IOI also shared updates with Finnwatch on progress made with regards to workers’ repatriation back to India. On the issue of recruitment fee, IOI provided reassurance to Finnwatch that investigations were ongoing on the matter, in line with IOI’s No Recruitment Fee policy.

On 23 February 2021, IOI informed Finnwatch that it had no way of confirming transactions that had occurred in India relating to recruitment fees. In response to the issue however, IOI suspended the recruitment agency involved as well as recruitment of workers from India, and added that it would be reporting the findings to authorities in India for further formal investigation.

On 28 June 2021, IOI reiterated that the issue of illegal monies collected from workers in India for recruitment was beyond their jurisdiction and would require cooperation from the Indian government.

On 2 July 2021, IOI published a Statement in Response to Finnwatch’s Report addressing the allegations. In the Statement, IOI also reaffirmed commitment to its “No Recruitment Fees Policy” since 2017, highlighted its “Guideline for Minimum Wage & Leave Pay” and “Worker’s Work Verification Guideline”, and mentioned that it will be undergoing an audit on its plantation operating units to ascertain non-compliance with its labour policies or unsatisfactory working conditions. 

On 21 July 2021, IOI published an update on its first virtual Sustainability Consultation Forum. IOI engaged BSR (Business for Social Responsibility) to develop and facilitate the Forum, which was held in May 2021 and attended by 40 of IOI’s internal and external stakeholders. Discussions at the Forum were centred around efforts to address current labour challenges faced by IOI and the Malaysian palm oil sector, with a specific focus on Responsible Recruitment Practices especially in Peninsular Malaysia and legalisation of undocumented workers in Sabah. An Executive Summary of the Forum can be found here.

On 13 January 2022, IOI published a further update on outcomes and action plans arising from the Forum, which includes active engagement with relevant stakeholders such as RSPO and ILO to develop solutions for responsible recruitment practices, and the setting up of a working group to discuss approaches to legalise undocumented workers in Sabah. Further details are available here.

On 2 June 2023, the RSPO Complaints Panel concluded its investigation into the allegations and dismissed the case.  For more information on RSPO Complaints Panel's deliberation, please refer to the case tracker.