Indonesia: South Korean company, Posco Intl, adopts no deforestation policy; vows to compensate indigenous communities
"South Korea's POSCO vows zero deforestation in Papua palm oil operation," 05 March 2020
Environmental watchdogs have welcomed a zero-deforestation pledge by South Korean trading giant POSCO International with regard to its palm oil operations in Indonesia’s Papua province, following years of razing the land.
Under its “No Deforestation, No Peatland, No Exploitation” policy, or NDPE, announced on March 1, POSCO says it will prohibit new plantation development in areas of high conservation value (HCV), high carbon stock (HCS), and peatlands.
It has also promised to protect and respect the rights of local indigenous communities, assist in their economic development, and compensate for the deforestation caused by its activities in Papua.
Mighty Earth, a U.S.-based environmental advocacy group that has long campaigned against POSCO’s deforestation in Papua, welcomed the adoption of the NDPE policy.
Mighty Earth, which provided input for a draft version of the policy, said POSCO’s decision was particularly important because Papua was home to the third-largest expanse of tropical rainforest in the world, after the Amazon and the Congo Basin, but had quickly become “the next frontier for palm oil and agribusiness expansion in Indonesia.”
While other palm oil, pulpwood and logging companies operating in Indonesia have also adopted NDPE policies, POSCO’s is different in that it commits to compensating for environmental damage that has already been done.
Norway’s sovereign pension fund and its Dutch counterpart, the ABP, have both divested from POSCO on the grounds of deforestation. But two South Korean public financial institutions — the Korean National Pension Service (NPS) and the Export-Import Bank of Korea (KEXIM) — continue to finance POSCO. The NPS holds a more than 5% stake in POSCO, while KEXIM has provided loans for BIA’s operations.
Last December, NGOs from Indonesia and South Korea filed a complaint with South Korea’s National Contact Point (NCP) at the Organization for Economic Cooperation and Development (OECD) against POSCO, the NPS and KEXIM.
The NGOs — Korean Transnational Corporations Watch (KTNC Watch), Yayasan Pusaka, Walhi Papua and SKP KAMe — accused POSCO of violating the OECD Guidelines for Multinational Enterprises by adversely impacting the environment and indigenous communities through its palm oil operation in Papua.
...POSCO said it would soon publish the full version of its NDPE policy and an implementation plan on its website. It said it would also publish annual progress reports.
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Note: Business & Human Rights Resource Centre has been following the OECD Guidelines complaint filed against POSCO, the Korean National Pension Service, and the Korean export-import bank (KEXIM) for alleged human rights violations in palm oil plantations in Papua in Indonesia.