Date filed
23 January 2018
Keywords
Country of operation
Current status
Agreement
Sector
NCP

Allegations

On 23 January 2018, Transformation for Justice (TuK Indonesia), an Indonesian community rights group, filed a complaint against the Roundtable on Sustainable Palm Oil (RSPO) with the Swiss NCP for breaches to the OECD Guidelines. Tuk Indonesia alleged that RSPO has failed to address complaints by residents of Kerunang and Entapang villages in West Kalimantan, whose land was taken by the palm oil giant Sime Darby.

According to the complaints, in 1995, a palm company Mitra Austral Sejahtera (MAS) approached the Dayak indigenous villages promising electricity, housing, hospitals, schools and employment in exchange for leasing their land until 2022. Reportedly no contract was ever signed, the communities were not informed of the project, yet MAS obtained cultivation permits and a land-use contract valid until 2030, in violation of their right to free prior and informed consent. The complainants assert that Sime Darby acquired MAS in 2007 after the villagers had been demanding that MAS allow them the right to cultivate the land. The community says it met with Sime Darby management over 25 times, but that the company stated it cannot concede to the community’s demands as that would require it to breach its concession agreement with the Indonesian government.

In 2012 Tuk Indonesia filed a complaint with the RSPO, but no progress was made. TUK therefore complained to the Swiss NCP in 2018 asking it to help TUK and the RSPO elaborate an action plan to resolve the six-year RSPO complaint.

RSPO is legally constituted in Switzerland.

Relevant OECD Guidelines

Outcome

In May 2018, the Swiss NCP issued an initial assessment accepting the case for further consideration. The NCP asserted that the RSPO, though not a traditional multinational enterprise, is nevertheless covered by the OECD Guidelines because it has commercial activities. The NCP noted that although the RSPO has a legal registration in Switzerland, its operational control is otherwise in Malaysia. Nevertheless, the Swiss NCP wrote that “taking in account, that no other NCP would be competent to treat this specific instance, the Swiss NCP decides to offer its good offices to support direct discussions between the parties where deemed appropriate.”

During the good offices period, discussions over teleconference and email centred on clarifying the process for a legal review of the pending issues as part of the RSPO complaint. Through the NCP’s mediation, the parties agreed to several steps and procedures regarding payment for the legal review, selection of the reviewer, standards and timeline for the review, and opportunities for TUK and Sime Darby to give input. The agreed action plan for the legal review was written up in the Swiss NCP’s final statement in June 2019. The parties also agreed to send an update to the NCP within six months, at which time the NCP would organize a telephone conference and consider whether further mediation is needed.

More details

Defendant
Other companies involved
Complainants
Affected people

Documents