11 Main Financiers to Palm Oil Groups

11 Main Financiers to Palm Oil Groups

InfoSAWIT, JAKARTA –According to the report of research result, on the cooperation between Roundtable on Sustainable Palm Oil (RSPO), Lanskap Indonesia, Profund, World Agroforestry, and CIFOR, there are ten banks as the financiers for palm oil groups in Indonesia. The ten banks might not implement the policy of ‘Otoritas Jasa Keuangan (OJK)’ about the Sustainable Financial for Lembaga Jasa Keuangan, Companies, and Publich Companies, based on the Regulation ofOtoritas Jasa Keuangan No. 51 /POJK.03/2017.   

Based on the report from what InfoSAWIT got, it noted that since 2013, when the NDPE (no deforestation, no peat, no exploitation) policy firstly run, the first corporate launching the policy was Wilmar International. At least, there are 365 palm oil distillers and traders, such as, Musim Mas and the consumption goods, such as, Unilever and Kraft Foods have implemented the policy. Through the scheme, they claimed palm oil suppliers to stop enlarging the forest or not to develop in peat, and respect the labor and people’s rights.

Most of the companies plan to implement NDPE policy in 2020 after the transition period. When the suppliers disobey the distriller and trade policy, the buying can be stopped. This happened for some last years that made many palm oil plantation companies lost much income.

CEO Landkap Indonesia, Agus P Sari said, this would be making financial risks for the banks that become the finaciers for the palm oil plantation companies that do not implement sustainable practices. “It is risky to the financial. The banks that have no sustainability standards would be in financial risk and getting loss,” he said last week in Jakarta.

For many factories are committed to implement NDPE policy, in some years, the plantation companies would be forced to run the commitment to maintain the market access. According to the research published by Chain Reaction Research (CRR)in November 2017, 29 companies groups that master palm oil distillation in Indonesia and Malaysia have adopted NDPE policy that obliges to buy from the suppliers that obey the regulation within the certain target of time.

Besides, 65% of the distillation whole over the world would fully run the NDPE policy some years to go. Unsustainable palm oil markets would exist in the short term but there would be few buyers that take risks – in Indonesia, China, India, and Pakistan – and the cost of transportation that would increase but cheap to sell. In the next years, the distillation implementing NDPE policy would be more.

Meanwhile in the world, the institutional investors, such as, the pension fund, insurance companies, and the asset companies start to run the social responsible investment (SRI). The policy regulates the social and environment condition, and the other social conditions to their investment. The investors would cooperate in the Principles of Responsible Investment (PRI) that might have more than 1.750 signatures in more than 50 countries that represent about US$ 70 billion.”The investment is very significant part of the global investment – according to PwC, their total assest that had been managed in 2015, reaching US$ 78,5 triliun.

The finaciers that do not implement the sustainable standards, (seen from the loans and the underwriting publication) in 2009-2017, were, the first, Maybank dengan within the loan reaching more than US$ 3,5 billion.The second, CIMB within modal to the palm oil groups more than US$ US$ 3 billion; the third, RHB about US$ 3 billion, the fourth, OCBC within the total loan about US$ 2,5 billion.

The fifth, HSBC within the funding more than US$ 2 billion;the sixth, Mitsubishi UFJ within modal more than US$ 1,4 billion;the seventh, Standard Chartered about US$ 1,3 billion;the eighth, Mizuho Financial about US$ 1,3 billion;the ninth, DBS within the fund more than 1,2 billion;the tenth, Bank Mandiri about US$ 1,2 billion;and the eleventh, Credit Suisse within the modal about US$ 900 million.  (T2)

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