12 Nov 2015

NZ linked to destruction in SE Asia, Greenpeace says

10:51 am on 12 November 2015

Greenpeace says a company which intends to use Otago fertiliser on its palm oil plantations is "very much linked" to destructive fires in south east Asia - a claim the company disputes.

This picture taken on September 16, 2015 shows 13-year-old Indonesian girl Asnimawati working at a palm oil plantation area in Pelalawan, Riau province in Indonesia's Sumatra island.

An Indonesian girl working at a palm oil plantation in Indonesia. Photo: AFP

The environmental campaign group said it had detected fire hotspots in areas belonging to Malaysian palm oil producer Felda Global Ventures which intended to use Otago fertiliser on its plantations.

However Felda said that was incorrect, and its subsidiaries in Indonesia were fully compliant with the zero burning development methods.

Many of the plantations were in parts of Indonesia where huge land-clearing fires are sending a dense smoke haze across vast expanses of south east Asia and destroying wildlife habitats, Greenpeace said.

Malaysian government-owned FELDA Group (Federal Land Development Authority), majority-owns Felda Global Ventures, the largest crude palm oil producer and third largest oil palm plantation operator in the world.

A subsidiary of FELDA Group's investment arm has the rights to mine for fertiliser in Otago.

Greenpeace forest campaigner Grant Rosoman said this clearly linked New Zealand to the destruction in South-East Asia.

"We have been monitoring them and have identified a lot of fire hotspots inside their concessions so they're very much linked to the fires going on there."

But Felda said based on records, no open burning was carried out intentionally or unintentionally during the dry season, as suggested by Greenpeace.

Felda said its subsidiaries had been working closely with its internal fire control teams, local government officers and district officers to ensure that any open burning activities on the land or surrounding areas are reported and attended to immediately.

Environmental impact of fires

Felda manages more than 450,000 hectares of oil palm estate across Malaysia and Kalimantan, Indonesia.

Kalimantan is one of the islands worst hit by the blazes that have engulfed south-east Asia, a result of fires deliberately lit to clear land for among other things, palm oil plantations.

The fires are being described as the worst environmental disaster since the Gulf of Mexico oil spill in 2010, and a crime against humanity.

According to the World Resources Institute, the daily estimated greenhouse gas emissions from the fires surpassed the average daily emissions from the whole of the US economy.

FELDA'S investment arm is the major shareholder in Plaman Resources which earlier this year purchased the permits to mine in Middlemarch, Otago for diatomite, a fertiliser, with the aim of using it on Felda's palm oil plantations.

Plaman Resources

Plaman Resources is a joint venture registered in New Zealand. Its major shareholder is the Malaysian technology and agricultural company Iris Corporation.

FELDA's investment arm is in turn Iris's largest shareholder (according to Iris's 2015 annual report, it holds 25 percent) and Iris is also listed on the Malaysian stock exchange.

In March this year, Iris announced to the market that it had completed its purchase of the assets of Featherston Resources - a troubled company which was mining diatomite in East Otago, for $AU4.8 million.

In its announcement, it said the purchase of the assets - mainly two mining permits - would allow Plaman Resources to promptly start the mining operations again.

Iris planned to put another $AU8.2m into the company for further drilling and exploration activities at the Otago mine site, and the related marketing and operation costs for Plaman.

Last year, Iris announced to its shareholders its intention to buy Featherston Resources, saying Iris hoped to "sell the diatomite to FELDA's related companies engaged in oil palm plantations.

"Further, Iris has international operations in more than 20 countries throughout Asia and Africa. It can facilitate access to the fertilizer market in these countries."

Iris noted that the main application for the diatomite in Malaysia would be in oil palm plantations, and that it improved oil palm's resistance to Ganoderma, a fungus-related disease.

It would also be used for rice and sugar cultivation.

Earlier this year the Crown department charged with looking after the country's resources - New Zealand Petroleum and Minerals - transferred a mining and exploration permit to Plaman Resources from Featherston and extended the permit times.

The mining permit is on an area with reserves of 6 million tonnes, while the exploration permit has probable reserves of 50 million tonnes.

Otago Regional Council and Dunedin City Council have confirmed to RNZ that the resource consents related to the mining operation were transferred to Plaman Resources.

Last year, the Overseas Investment Office also approved Plaman Resources' purchase of 42 hectares of land in Middlemarch for $NZ615,000 where the diatomite open pit mine is located.

Plaman Resources director Geordie Manolas told RNZ it was not in a position to comment about the operations.

Felda's palm oil plantations

Felda's operations in Indonesia are mainly in Kalimantan through a company called PT Citra Niaga Perkasa which owns 14,385 hectares of land.

Felda also has two subsidiaries - PT Temila Agro Abadi and PT Landak Bhakti Palma - through which it owns another 21,037 hectares in West Kalimantan.

In Malaysia, Felda's largest plantations are located in Pahang and Sabah, it owns Pontian United Plantations Berhad which operates 15,161 hectares of oil palm plantation in Sabah.

Its website states that it embarks on continuous expansion initiatives to secure crude palm oil and feedstock supplies.

Felda says it and its subsidiaries are fully committed to environmental, social and economic sustainability.

In July this year a Wall Street Journal article suggested Felda was complicit in the abuse of migrant workers it hired through contractors to work on its Malaysian plantations.

According to Felda's latest quarterly report, it is set to invest in PT Eagle High Plantations, a company which has been linked to deforestation in West Papua.