Pressure from environmental groups drives POSCO International to adopt “No Deforestation” policy in Indonesia

WASHINGTON – Following years of pressure from environmental and human rights groups, POSCO International, South Korea’s largest trading company, has adopted a zero-deforestation policy for its global palm oil operations. The company’s “No Deforestation, No Peatland, No Exploitation” (NDPE) policy includes measures to protect rainforests, safeguard the rights of indigenous communities, and a pledge to compensate for the group’s deforestation legacy in Papua, Indonesia.

Friends of the Earth groups from Korea, Netherlands, and the US have worked with allies Mighty Earth and community-based NGOs in Papua for over three years to stop POSCO’s rampant deforestation. Since 2011, the company has destroyed some 27,000 hectares of forest in Papua Province, including 15,000 hectares of Indonesia’s most ecologically diverse primary rainforest. The destruction only ended in 2018 when an international campaign exposed the devastation caused by POSCO.

“Though it is encouraging that POSCO International has announced plans for forest restoration, nearly 80 percent of the concession area is already cleared,” said Hye Lyn Kim, international solidarity campaigner at Korea Federation for Environmental Movements, also known as FOE Korea. “Community members in Papua are still suffering,” Kim added. “We will continue to monitor how the company implements its commitment in practice.”

Franky Samperante, director at PUSAKA, said “POSCO International should inform affected community members of it’s No Deforestation policy and should let NGOs monitor the implementation of its commitment.” 

Using data published by the Indonesian Ministry of Environment and Forestry, environmental campaign group Mighty Earth showed that in 2011 before POSCO International started developing its PT Bio Inti Agrindo (PT BIA) concession in Papua, over half of the area had been covered by primary forest. By 2018, nearly 80 percent of the company’s total concession area had been clear cut and planted with vast rows of oil palm trees. That year, under pressure from civil society, the company issued a temporary moratorium on deforestation in its Papua palm oil plantation.

In June 2018, after meeting with Friends of the Earth Netherlands and allies, the Dutch pension fund ABP divested from POSCO over its failure to address its deforestation. Following this divestment, Friends of the Earth groups initiated a campaign to urge other investors, including US-based CalPERS, BlackRock, and Northern Trust, to require POSCO to adopt a No Deforestation policy and provide redress for the vast harm done to Papua’s forests and rights-holders.

“While POSCO’s new deforestation policy is a welcome step, it’s commitment on paper has yet to translate into action,” said Jeff Conant, senior international forests program director with Friends of the Earth US. “We continue to hold POSCO accountable for destroying Indonesia’s forests and harming indigenous communities. We expect any investors that still hold shares in POSCO to do the same, and to be prepared for full divestment if the company’s abuses carry on.”

In December 2019, NGOs filed a complaint against POSCO with the Organization for Economic Cooperation and Development (OECD) for its alleged violations of the OECD Guidelines on human rights, which POSCO has recently tried to have dismissed.

“It is encouraging that pressure from civil society and from responsible investors has led POSCO to adopt a new policy and to pledge to redress the damage,” said Anne Wijers, a forest campaigner with Milieudefensie/Friends of the Earth Netherlands. “But experience tells us that voluntary corporate pledges are not always met. It remains clear that strong regulations and enforcement in every country are required to hold companies like POSCO to account, and to ensure that we maintain our precious rainforests and uphold the rights of affected people.”

Communications contact: Aisha Dukule, (202) 893-3502, adukule@foe.org

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