In a June 26 report, WWF Indonesia found that over 52,000 hectares in a national park have already been converted into illegal palm oil plantations and that this oil has made its way into the global market. Read more below about this report and what WWF says needs to be done.

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Illegal palm oil expansion inside Indonesia’s Tesso Nilo National Park is threatening protected forests and the reputation of two companies who claim to be sources of sustainably-produced palm oil, says a new WWF-Indonesia report.

In its June 26 report, “Palming Off a National Park,” WWF-Indonesia found that over 52,000 hectares of natural forests in the area have already been illegally converted into palm oil plantations. And fruits from the illegal plantations have made their way into the supply chains of at least two global companies – Asian Agri and Wilmar.

WWF-Indonesia urged all parties to take immediate action to stop the encroachment, including through implementation of what it called a “win-win solution” – a voluntary relocation program for smallholders already operating illegally inside the park, which was recently proposed by the local government of Pelalawan district and the Ministry of Forestry.

The report documented encroachment inside the Tesso Nilo forest complex, a 167,618-hectare area in Indonesia’s Riau province that includes the national park and two logging concessions – areas zoned for timber exploitation but not for plantation development. Up until 2012, over 52,000 hectares of natural forest in the Tesso Nilo forest complex had already been illegally converted to palm oil plantations, the report found, including over 15,000 ha inside the national park itself.



Tesso Nilo forest complex encroachment in Sumatra. Map courtesy of WWF. Click to enlarge.

By examining the chain-of-custody of the illegally-produced palm oil fruits – tracking fresh fruit bunches (FFBs) through the supply chain from the smallholder farmers to the processors – WWF found that Asian Agri and Wilmar, both members of the Roundtable on Sustainable Palm Oil (RSPO), had allowed fruits from illegal plantations inside the national park to enter their supply chain. Both companies have since responded to the situation and said they are no longer purchasing fruits from suppliers inside the national park.

“WWF welcomes immediate responses taken by Asian Agri and Wilmar in the area. As dutiful members of RSPO they are obliged to make improvements to tackle this problem,” said Irwan Gunawan, deputy director for WWF-Indonesia’s market transformation initiative.

However, Irwan added, this is not an isolated problem. By looking at just 10 of the 50 mills surrounding the Tesso Nilo forest complex, WWF was able to find evidence that two global companies were using illegally-grown FFBs, indicating that palm oil exported from Indonesia to the global market has likely been contaminated with fruits grown illegally and linked to tropical forest destruction. WWF called on companies to develop more transparent supply chains, track fruits from smallholder plantations to their mills and conduct internal verification to ensure that they are not using fruits from illegal palm oil plantations.

“This problem is not restricted to these companies or the Tesso Nilo area alone,” Irwan said. “Responsible palm oil companies should implement such procedures throughout their whole operations.”

WWF also encouraged the Indonesian government to immediately take steps to end encroachment in Tesso Nilo. In February 2013, after WWF shared a draft of the report with Indonesia’s Ministry of Forestry, the ministry announced that it would provide financial support to tackle the encroachment problem, including to help voluntarily relocate encroachers to land outside the Tesso Nilo forest complex. The local government of Pelalawan district has also made similar commitments, pledging funds to relocate people residing inside the national park. And while most encroachers in Tesso Nilo are migrants from other provinces, for those smallholders with “adat” or customary rights to the land inside the forest complex, WWF said it will work with these communities to ensure existing plantations are managed sustainably and will advocate for their legal land rights.