http://www.thejakartaglobe.com/business/norway-drops-asian-palm-oil-firms-in-show-of-green-credentials/578573
Norway Drops Asian Palm Oil Firms in Show of Green Credentials Joachim Dagenborg & Alister Doyle | March 09, 2013 A worker holds a handful of palm oil seeds in Serba Jadi, East Aceh, on December 11, 2010. Rampant deforestation, which makes ways for palm oil and acacia plantation areas, makes Indonesia the world\'s third-largest greenhouse gas emitters, according to some estimates. According to Greenpeace, forests covering the equivalent of 300 football fields are eradicated every hour in Indonesia, which along with Malaysia produces 80 percent of the world\'s palm oil, used for among other things cosmetics, food and fuel. (AFP Photo/Sutanta Aditya) Oslo. Norway’s $710 billion sovereign wealth fund has pulled out of 23 Asian palm oil companies after accusing them of causing deforestation, winning praise from environmentalists. It said it sold stakes in the firms after a review of companies that have cleared forests for palm oil plantations in Malaysia and Indonesia. Palm oil is used in many foods and consumer goods such as soaps, lipstick and peanut butter. The fund is one of the world’s biggest investors, underpinned by Norway’s oil and gas assets. Last year it expanded its investment guidelines to include deforestation as a threat to future growth. Stakes in firms including Wilmar, KL Kepong and Golden Agri-Resources Ltd were sold during 2012, according to the fund’s annual report released on Friday. Of these, the biggest holding had been in Singapore-listed Wilmar, worth 382 million crowns ($67.29 million). “In the first quarter of 2012 we sold our stakes in 23 companies that by our reckoning produced palm oil unsustainably,” the fund said, without naming any firms. Norway has given more than any other developed nation to help slow deforestation, partly as a way to avert climate change. Indonesia is home to the world’s third-largest expanse of tropical forests and is the top producer of palm oil. Malaysia is the world’s second largest producer. The companies deny that they are a threat to forests. Golden Agri’s website, for instance, says: “we aim to be the leader in sustainable palm oil production.” Wilmar and KL Kepong similarly say that they support best practices and standards to protect the environment. Double standards The Rainforest Foundation environmental group has long accused Norway of double standards by investing billions of dollars in palm oil or soya farmers while also giving cash to nations from Brazil to Indonesia to slow deforestation. “We are very happy with this development in the palm oil sector,” said Nils Hermann Ranum, of Norway’s branch of the Foundation. Still, he said that Norway should do more to pull out of other sectors that cause deforestation, such as logging companies, oil and gas firms, soya and meat producers. By the Foundation’s estimates, Norway had investments totaling $13.2 billion in companies damaging rainforests at the end of 2012, against $14.4 billion a year earlier. “They need a more coherent policy,” he said. Norway has programs to slow deforestation worth $1 billion each for Brazil and Indonesia, as well as smaller projects in nations from Guyana to Tanzania. Many companies, including Anglo-Dutch consumer group Unilever and Swiss food group Nestle, have cracked down on palm oil suppliers in recent years because of worries about deforestation. Deforestation accounts for up to about a fifth of greenhouse gases from human sources. Forests soak up carbon dioxide as they grow and release it when they burn or rot. Yngve Slyngstad, head of Norway’s fund, told Reuters that Oslo was trying to invest more in palm oil producers whose policies did not damage forests that are home to endangered animals such as orangutans and absorb greenhouse gases. “We have sold many of the small companies and concentrated investment in larger companies who often have a better practice,” he said. Among palm oil firms, the fund more than quadrupled its holdings in Malaysia’s Sime Darby to a value of 688.8 million crowns at the end of 2012 from 150.7 million crowns a year earlier. Reuters [Non-text portions of this message have been removed]
