In secret tapes, palm oil execs disclose corruption, brutality

In secret tapes, palm oil execs disclose corruption, brutality

The police drove into the village of Watwat in SUVs during a rainstorm. It was late on a July night in 2019, and they'd come through the rainforest, armed with guns and metal bars.

Men and teenage boys were dragged out of bed, beaten and thrown into the mud. Some were arrested, held for weeks and interrogated about vandalizing palm trees, according to an investigative report by the advocacy group Global Witness.

 

One Watwat resident told investigators that the SUVs were owned by one of the companies that runs the local plantation.

"The company has a lot of money," she said. "They are able to give it to the police."

Global Witness said it did not name the villager to protect her safety. The Washington Post did not speak to the woman directly, but learned details of her identity from two Global Witness investigators, who interviewed her.

Global Witness's two-year investigation is a rare behind-the-scenes look at the corruption, labor abuses and destructive environmental practices in an industry that is clearing carbon-rich rainforests and emitting greenhouse gases at a rate that has become a growing concern for climate scientists. The world's most common vegetable oil has spawned vast fortunes, while coming under scrutiny for its labor practices and environmental impact.

 

The report includes recordings of oil-palm managers detailing corruption and labor abuses to investigators posing as commodity traders. The investigation has already provoked a response from 17 corporations, some of which have pledged to remove the palm oil companies the advocacy group identified as their suppliers.

"A pattern of coercion and violence right across PNG has denied local people the traditional use of forests integral to their culture and livelihoods," the authors of the report write. "Huge areas of tropical forests have been deforested, and much more remains at risk unless action is taken."

The group's undercover investigators taped an executive from a Papua New Guinea-based company called Tobar Investment Ltd. seemingly confirming the Watwat resident's account of the police raid of the village, which came in response to the destruction of palm trees on the plantation.

Edward Lamur, the executive, told investigators in a secretly recorded online meeting that his company had approached police after vandalism to get them to send a message to local residents. He said that a close friend of his ran the "special operation police" and that he could call the officer "whenever we want assistance."

"They did some bashing up," he said. "They know we are owners now."

The secretly recorded conversations with Lamur and others were broadcast Thursday in Britain as part of a story on Channel 4 News.

Lamur, who is a founding director of Tobar and a former deputy provincial administrator of East New Britain province, located on a large island off Papua New Guinea, did not respond to a request for comment.

The Global Witness report looks at Malaysian companies operating in Papua New Guinea, including East New Britain Resources Group (ENBR) and Rimbunan Hijau, that it says collectively have cleared tens of thousands of acres of forest in recent years. More than three quarters of the global product from oil palm trees comes from Indonesia and Malaysia and makes its way through supply chains into products familiar to any Western consumer, from companies such as Colgate-Palmolive, Kellogg's and Nestlé. Many of the buyers have so-called No Deforestation, No Peat and No Exploitation policies (NDPE), but Global Witness found some of the palm oil companies whose abuses they documented on the supply list for those three Western corporations, among others.

In a statement, Kellogg Co. called the allegations in the report "very concerning," while confirming that three of its palm-oil suppliers had indirectly made purchases from ENBR. The company said it immediately contacted its suppliers when it learned about the allegations and that ENBR is no longer in its supply chain.

"Kellogg is committed to working with our suppliers to support the production of sustainable palm oil from sources that are environmentally appropriate, socially beneficial and economically viable," the company said in a statement. "Anything less is not acceptable."

Nestlé said it confirmed that it has identified nine palm oil mills owned by Rimbunan Hijau in its supply chain but has not been connected to palm oil from ENBR since 2019. The company says it is investigating and will suspend any company shown to be responsible for deforestation or that does not have a policy to obtain consent from Indigenous people before developing. Nestlé said it requires companies to provide data to allow satellite monitoring that would detect deforestation.

"We take allegations of breaches to our Responsible Sourcing Standard very seriously," the company said in a statement.

Colgate-Palmolive did not respond to a request for comment but told Global Witness that it has had supply chain connections to ENBR and Rimbunan Hijau and would add the group to its "internal grievance log" and investigate further.

As Malaysia came under increasing pressure in recent decades for clearing its forests faster than any country on Earth, some of its lumber companies began looking to the virgin rainforests of Papua New Guinea. The mostly unspoiled island country has since become one of the biggest exporters of tropical lumber. And in the wake of all the cutting, Malaysian palm oil companies moved in.

Impoverished Papua New Guinea sees its economic future in palm oil. By 2030, it plans to increase the size of its palm plantation tracts tenfold from the 2016 level of about 360,000 acres. But the country has also pledged a sharp reduction in carbon emissions from deforestation by the same year in a national commitment to the United Nations.

The Global Witness report suggests that the government may have a hard time reining in the well-connected palm oil companies. Tobar Investment Ltd., the local company behind the raid in Watwat, operates under a joint venture with ENBR.

Over a business dinner, the undercover investigators taped two managers from a subsidiary of ENBR bragging about corruption of government officials to obtain logging permits and land access. The managers also told the investigators that they had workers as young as 10 on their plantations.

"Sometimes we bend the rules just to make things happen," said one manager, identified by Global Witness as Bernard Lolot. It's illegal in Papua New Guinea to employ children under 16 for heavy labor.

At another dinner, Global Witness said, the Malaysian chief executive of the company, Eng Kwee Tan, detailed a scheme to evade import duties in India. He explained that the duties are higher for palm oil coming from Papua New Guinea than from Malaysia.

"We have to make it show like it come from Malaysia," he said in English in another secretly recorded conversation that was also broadcast on Channel 4 along with the video of Lolot.

In a statement to The Washington Post, Tan did not deny the veracity of the recorded conversations but said the company had not engaged in bribery or tax evasion. He said the company "provides essential services such as aid posts, schools, bridges, roads, basic life skills training to local communities, clean drinking water, [and] electricity supply to the least developed districts, villages and communities within East New Britain Province."

"Any purported claims of discussions and or responses from our Mr. Lolot is all hearsay and not true," Tan said of the bribery allegations, emphasizing that the company did not employ Lolot to apply for logging permits, meet the minister of forestry or "pay bribes" to government officials.

"The report from GW is misleading and misrepresents the Company's actual work, value, investment, and contribution of poverty elevation in the project area," he said. "The allegations are based on secret recordings and unreliable information."

Global Witness says that Rimbunan Hijau, whose name means 'forever green,' cleared nearly 81 square miles of coastal rainforest in New Britain province. The report also detailed a dozen work-related deaths on the company's plantations between 2012 and 2020, some of which were not recorded in a government database that catalogues required incidents of workplace casualties that investigators examined..

Rimbunan Hijau did not respond to a request for comment from The Post. But the Global Witness report includes a statement that the company sent to one of its customers about the allegations, which emphasized the work the company had done to develop the local economy.

In the statement, the company said the allegations in the report were out of context and "without any real basis." It called Global Witness "a group of economic vandals who do not care about the lives they destroy."

While the companies stress the economic benefit to communities, the report details the cost for local people living in the areas being developed as palm oil plantations. The witness in Watwat, who recounted the raid by police in July 2019, was asked by Global Witness what good the development had done for the community.

"Only destruction," she replied.