As reported by Chain Reaction Research and written by Albert ten Kate (Aidenvironment), Gabriel Thoumi, CFA, FRM (Climate Advisers) and Eric Wakker (Aidenvironment), PT Sampoerna Agro Tbk (SGRO) is part of Sampoerna Strategic, which also owns businesses in finance, telecom, property and timber. Putera Sampoerna and his family are the controlling shareholders of Sampoerna Strategic. Michael Sampoerna is the present CEO.
SGRO grows oil palm, and to a lesser extent sago and rubber. By Q3 2016, its oil palm planted area comprised 84,000 ha excluding plasma smallholders. SGRO’s oil palm plantations are located in South Sumatra, Central Kalimantan, and West Kalimantan.
Sustainability Policy and Recent Practices
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SGRO does not have a No Deforestation, No Peat, No Exploitation (NDPE) policy. It claims to preserve High Conservation Value areas, yet the company does not make the amount of ha preserved public.
- 2015 oil palm revenue: IDR 2,900 billion
- 2015 CPO-production: 388,000 tons
- Sustainability policy and recent practices: high risk
- 2016 No Deforestation, No Peat, No Exploitation (NDPE) CPO buyers: Golden Agri-Resources, Louis Dreyfous, Wahana Citra Nabati
- 2016 NDPE buyers percent revenue: 60%
- High-risk exposure due to lack of NDPE policies
SGRO is a member of the RSPO. So far only 5,000 ha of the company’s planted area have been RSPO certified. SGRO has never submitted a New Planting proposal to the RSPO. The company expects to achieve 100 percent RSPO certification for its own operations by 2021.
Since 2014, it has added 14,000 ha to its planted area of 70,000 ha.
On August 11, 2016 judges of the South Jakarta District Court ordered SGRO to pay $80 million (IDR 1.07 trillion) for compensation and environmental restoration. The Indonesian Ministry of Environment and Forestry had started a civil lawsuit against SGRO’s subsidiary PT National Sago Prima because of forest fires on 3,000 ha in Riau province it was responsible for. According the ministry, PT National Sago Prima did not do anything to prevent wildfires. It had not built fire lookout towers and had no fire fighting teams available. In February and March 2014, fires spread in and outside its sago concession. In 2014, there were 883 hotspots recorded inside the concession. As shown in Figure 1 below, June 2014 hotspots are visible via satellites.
|Figure 1: Recorded hotspots 2014 in SGRO’s subsidiary PT National Sago Prima concession.|