Interview with Scott Poynton, TFT: “We help companies clean up their supply chains – that is the way we need to go to protect the world’s forests”

Interview with Scott Poynton, Executive Director, TFT, Jakarta, June 2012.

REDD-Monitor: Can you start with a brief explanation of what TFT is, how it was formed, how it works and what it does.

Scott Poynton: We help companies clean up their supply chains. We started in 1999 as the Tropical Forest Trust. There were two streams of activity that came together and led to TFT’s foundation. The first one was something involving me personally.

In the early 1990s when I was in England doing a Masters at the Oxford Forestry Institute, I met a lot of people there who went on to start the FSC [Forest Stewardship Council] or to be involved in it. In late 1995, I had just returned to Australia from Vietnam, where I’d worked on an aid project. I was working for FORTECH, an Australian forestry consulting company, and got a a call from Frank Miller, one of my old lecturers at Oxford who was by then working for SGS. He said, “You’ve just come back from Vietnam, and we need to do a forest assessment there for B&Q because B&Q are getting their garden furniture from there.” And I said “OK, well I’d be interested in that.” So he asked me to go.

Before I went he sent me the pre-assessment report done by someone from SGS Philippines. It made note of all this wonderful forest there, in a place called Ma Da Forest Enterprise. And I’d been to Ma Da Forest Enterprise.

REDD-Monitor: I’ve been there as well.

Scott Poynton: You’ve been to Ma Da. There’s not a lot of forest in Ma Da Forest Enterprise. In fact there’s acacia and teak plantations. So, I said, “There’s no wood in Ma Da Forest Enterprise, so I’m surprised we’re going to do an assessment.” He says, “Oh dear, you’d better go along.” I went in December 1995 and of course what I found was that there was a sawmill at Ma Da Enterprise but none of the logs going into the saw mill were coming from Ma Da Enterprise. They were being bought down river from Cambodia. We reported back to B&Q and because of the concern around illegal logging in Cambodia, B&Q took action and decided they didn’t want that furniture any more. I would say they took responsible action, but it was a bit of a shock for them.

My push back to them was, “Look, don’t leave Vietnam, because actually there’s some good forest management in the Central Highlands. Maybe you can get the wood from there.” This was the idea that started the TFT model. I talked to Alan Knight who was B&Q’s Sustainability Manager and suggested, “Get a forest where there’s good management. It may not be certified but with technical assistance you can move it towards certification. And you can set up traceability systems to prove that that’s where your wood is coming from. So if anyone asks, you can say I know exactly where my wood’s coming from and I’m helping this forest to become certified.” Alan thought that was a good idea.

That was the birth of the TFT model. I had that discussion with B&Q in 1996 and over the next couple of years I got busy trying to locate a forest and work out how to make the model work. In April 1998, I found Kon Plong forest in the Central Highlands. I visited, they were keen. It was a nice forest, reasonably well managed, but then the rains came. So I said, “I’ll be back in November 1998 to do an assessment of your forest and see if we can tie you into this factory in HCM City.”

In the meantime, the other stream of activity that I mentioned happened. This was led by Global Witness. They hadn’t produced their report yet, but they’d done all the research for a report that was subsequently published in 1999. They released the results to the broader NGO campaigning community in the summer of 1998, highlighting that the booming garden furniture trade, all the furniture coming out of Vietnam, was actually made using illegal wood, with pretty serious human rights abuses, coming from Cambodia. The report was ‘Made in Vietnam, Cut in Cambodia’. Great report. Highlighted all this stuff, and of course this was stuff that I’d highlighted to B&Q back in 1995.

B&Q by then were out of Vietnam, moving their purchases elsewhere to look for more ethical timber. But I still had this forest I’d found in April 1998, whilst this campaign raged in the summer of 1998. The biggest garden furniture company, ScanCom, was hit very hard by the NGOs, who campaigned very strongly against them and their customers. ScanCom came up with this idea, “OK, we’ll put a 2% levy on garden furniture to generate some money and then we’ll do something with that money to solve this problem.” But they didn’t really know what.

So ScanCom went to see people at WWF and they said, “OK, well we can’t really work with you, but you should go and talk to this bloke Scott Poynton because he’s just found this forest in Vietnam. He’s looking for funding to get it certified.” As promised, I went back to Kon Plong forest in November 1998 to do a gap assessment to get it towards certification, and as I came out from that mission, the ScanCom blokes were more or less waiting for me at the airport, saying, “We need to talk to you because we’re interested in your project.”

Discussions got going over the next three months. I visited various NGOs, who all said, “You’re a dodgy Aussie bugger, why should we listen to you?” I had no track record with any of these NGO people, but I was saying, “This is what we’re going to do.”

I went to see ScanCom’s customers and told them what we were going to do. The customers who had people hanging outside their buildings, throwing red paint around and burning furniture, said, “OK, we’ll sign up to that. Any port in a storm. That sounds like a good idea.” I should give them more credit, because in fact the leading ones that were the founding members of the TFT bought into it. They said, “OK, we want to do that, we want to be responsible.”

But the NGOs said more or less, “No. We reckon you’re going to take the money and all you’ll to do is run a big communications campaign and say what great guys you are and all the rest of it.” And I said, “No we’re not. We’re going to go out in the bush and we’re going to try and get the forest certified.”

In March 1999, seven companies signed on to be founding members of TFT. That was the start of it. Our objective was first and foremost to get the illegal wood out of the furniture. The second was to bring in FSC wood. And the third was to try and raise awareness of the opportunity of FSC wood coming into the market, that this was a better way to go.

So first and foremost, we wanted to get the illegal wood out. This is an important thing for the later evolution of the TFT. We didn’t set up saying we must get FSC wood; our first thing was to make sure the wood our members were using was responsible. We subsequently decided that that means it should be FSC certified. Of course we were helped in that by the NGOs who were hanging off buildings campaigning for FSC wood. They weren’t hanging off buildings for some other certification. So we had that to lead us. It’s an important distinction as we grew the TFT later on.

So that’s how it started. We called ourselves the Tropical Forest Trust, because we were working in the tropics. Later on, we decided we’d call ourselves The Forest Trust, because we were working more broadly, and now we just like to call ourselves TFT, because we’re working beyond forests in other products that haven’t got any link to forests at all.

REDD-Monitor: How big is TFT now? How many people does it employ and how many countries do you work in?

Scott Poynton: Right now, we’ve got pretty close to 100 people, and growing. We have offices in 14 countries. We are strong in Asia. We have about 50 people in Indonesia, three in Malaysia, three in Vietnam, seven in China, and five in Laos. In Africa, we have 15 or so. Brazil six.

About 80% of our people are located in the developing world, in the forest source countries. The other 20% are in our headquarters in Switzerland and in our offices in the UK, France and US. Our offices support the retailers to make sure that we know what they want and need. Then we cascade that to the people out in the field working in forests, factories and palm oil plantations.

We’re working in shoe factories, shoe supply chains, initially because of the deforestation link with leather, but now looking at the broader environmental and social questions around tanning, chemical use, dyes, glues and labour conditions in factories. We’re looking at quarries in India and China. We’re starting to look at cotton. We’re looking at a diverse range of products. We’re probably still 80% forest footprint. It comes down to the fact that we see ourselves as supply chain experts, rather than necessarily forest experts.

REDD-Monitor: The whole idea of partnerships between NGOs and corporations is controversial. One of the problems is when the NGO receives funding from the corporations. How is TFT funded? And how do we know that TFT isn’t just greenwashing corporations in return for funding?

Scott Poynton: It’s a good question. We get asked that all the time. In fact, at the moment, this year, about 85% of our funding comes from the companies we work with. When we started, it was 100%. During 2008, 2009 it got down to 50-50, with 50% from the companies we work with and 50% from donors such as the EC or private philanthropic foundations. We don’t like it that the balance got to that point. We prefer to have the majority of our funding from the companies that we’re working with.

People have difficulty placing us. We don’t see ourselves as an NGO. We are a charity, but we’re unique I think in the sense that we work solely with businesses. We do take funding from other sources, but we work solely with businesses. Our view is that the problems that we face in the world are embedded in supply chains, predominantly by global trade in products that suck in bad things. The supply chains can suck in deforestation, they can suck in child labour, they can suck in terrible pollution, chemical use, things like this. And a lot of people’s response to that is to have workshops and talk a lot. We don’t do that. We say, “Look, the solution has to be with the companies, in the field, that are causing the problem.”

Some NGOs are not good at making that operational. They tend to go and have meetings and have a chat. They feel that they’ve had a good meeting, but too often the company goes on with business as usual.

Our view is that the companies have to own responsibility for the programme. A lot of the funding NGOs who work with companies receive is from donors. The companies don’t pay so don’t own the responsibility for the programme. The NGO comes and says, “It’s alright, we’re going to sit with you and talk with you, we’ll maybe even visit some of your operations in the field, but we’re not asking you to give us any money.” Now, money does come, but often the company says, “Here’s a million dollars to sponsor you to do an orangutan project, or some philanthropic thing. Here you are, go and save the tiger. For every dollar we save a hectare. Here’s a million bucks.” So these are philanthropic projects.

We don’t do that. We say, “We’re working with you on your product coming through your supply chain. It’s your product, you’re making money out of it so it’s your problem. So you have to pay, you have to take ownership of the problem.” In the same way, if you’re a company with a computer system problem, you bring in people to help you sort that out. We say to people, “You’ve got a problem. You’ve got an environmental or social problem with your business and you have to sort it out, because it’s damaging your brand and it’s damaging nature – that means people and the environment.” We’re very brand-led. When Greenpeace and other NGOs attack companies, it’s often when companies give us a call. Or if they perceive that there’s risk of an attack, then they give us a call.

People often ask, “Are TFT and Greenpeace partners in crime? They go in first and you go in to sop up later on.” We can talk about that in a minute.

We want the businesses to own the problem, basically to fess up and say “We’re causing this problem and it’s our responsibility to fix it.” We want them to fund it. And the issue, coming back to your point, how do we know TFT isn’t just a greenwash, is that we talk to a lot of NGOs too.

We don’t just go out and sit in meeting rooms and, coming back to the point I made earlier, which I want to stress. When we started TFT a lot of the NGOs said, “Oh, you’re just going to do communications.” We were getting 2% of ScanCom’s garden furniture turnover, this was about US$700,000 back in 1999. That was a lot of money. And it wasn’t an endowment; that was an annual contribution. You can do a lot of things with US$700,000. And the NGOs were saying, “You’re just going to take the money and run some flag-waving thing, write a few reports saying how great you are.”

I said, “We’re not. We’re not going to do any communications.” For a long time the TFT didn’t even have a website. We’ve produced about three reports in our life. Now we have a website, we do a bit of communications, but we’re not, “Rah rah flag waving, here’s four reports a year saying how great we are.” Doesn’t happen.

We get out there and support our members to change their product story. Change the story of their products away from deforestation and exploitation, bad things, to good things. And they have to invest in it. But we don’t do it alone. We partner with other NGOs, usually local NGOs, and we have people like Greenpeace watching us too. We started with Global Witness watching us, and other NGOs, Friends of the Earth watching us. And we meet with these guys from time to time. Haven’t met with Global Witness for a while, they’ve sort of gone in a different direction, but other NGOs like Greenpeace, we talk to them all the time, because they are watching us too. And if we become involved and start greenwashing you can be absolutely guaranteed that the guns will turn on us. If we go and start bullshitting to Greenpeace, they’re going to notice pretty quick.

I would like to think that TFT has developed a credible reputation over the years for not greenwashing, for saying what it is. We’ve kicked members out. We’ve kicked some very large companies out. We’ve kicked some very small companies out. We’ve stopped projects when we think they are not progressing.

REDD-Monitor: Do you have a list of the companies that you’ve kicked out?

Scott Poynton: No. Because it’s a very sensitive thing for the companies we kick out. And we generally don’t make a press release to say such and such has been kicked out. But we take them off our website as members. We never make a public announcement about it because one day they might want to change their ways and come back.

We are not business friendly in the sense that we are trying to ease their path through life. Every company we deal with usually has a bit of a hard time because change is uncomfortable. Those who are committed stay the path and see benefit to their business.

The first publication we did was in 2001, it was called “Good Wood, Good Business”. We wanted to say to people, “If you do the right thing, you’ll make more money.” We seldom say to people, “You’ve got to do this to save the world. You’ve got to do this to reduce greenhouse gas emissions.” It doesn’t really fly, because businesses just come back and say, “Why is that my responsibility?” Instead we say, “If you do this, you’ll enhance your brand value, you’ll reduce your risk. There’s an opportunity to differentiate yourself from the bloke down the road. And you can make more money.” And then watch their eyes light up. Then it becomes an interesting conversation.

But you’ve got to invest. And not only do you have to invest, you’ve got to change. And most of the investment is not in us; most of the investment comes in changing their practices. You know, to get a forest FSC certified most of the companies we’re working with don’t pay us. Our members pay us but then the forest company has to build better roads, they’ve got to buy better logging equipment. This costs a lot of money. To work with us is painful. But we try to encourage people to understand that there are benefits in the journey. And there are benefits, and there is no end point in the journey, because you can get certified if you like, but we prefer people to go beyond certification and constantly enhance their practices.

So yes, we work with companies because we think that’s the only way we’re going to get change. Yes, we take funding from companies. But yes, we have a lot of scrutiny from NGOs who are right in our neck to make sure that we’re not greenwashing.

REDD-Monitor: Do the companies that you work with have specific standards that they have to achieve? How do you decide when a company has not gone far enough, quickly enough, and you’ve got to kick them out?

Scott Poynton: In the early days of the TFT we were predominantly working on wood. So we concentrated on getting companies FSC certified if they were forest managers. Our members are not generally forest managers, they are usually buying from a forest, but we’d find a forest that fed into them. So we’d say, “Hey, forest manager, you’ve got to get FSC certified.” And we’d go in there, we’d do a gap assessment, and an action plan, and then we’d give the forest management chance to move. You take small blessings initially. If we’d go in there and suddenly there’s no truck to take us out to the forest to do our assessment, or such and such is not here to talk to us, then you start thinking these blokes aren’t serious. But, if the car’s there, we’re out there, they are doing everything we ask, they are giving us all the maps we need, you think, OK these guys are open, this is good, we’re making progress.

That can be a start, and as we get on and we’re actually asking them to make fundamental changes, suddenly the investment dries up, they don’t have enough people, and so we find projects falling away and we kick them out.

Likewise with members. Most of our members are retailers. In the early days they came to us because they were being beaten up by one NGO or another. So they had an incentive to move, a knife in the ribs. We started working with them and they started getting FSC wood, or they didn’t. But what we found was, for example one of the big disasters, when we said to a company, “We don’t mind if you’ve got illegal wood in your product today, because you bought that in the past. But from this point forward, we’re advising you not to place orders with that factory, or to tell that factory not to buy wood in that way. Now if you do that, we will kick you out. And that’s it, because you now know. You now know and you must be punished if you do that.” And we’ve had situations where companies have done it and we’ve said, “Slap and out you go.”

A case in Indonesia, just going back to one of the forest examples, is Perhutani. I think you know the controversy around Perhutani and many years of people getting shot and things like this. Perhutani lost their FSC certificates in 2001. All of our members were buying teak from Perhutani. And they said, “What are we going to do?” We said, “Let’s go and talk to those guys.” And we found Perhutani open to the idea of getting their certificates back.

So, they lost their certificates in October 2001. We started work with them in about February 2003, and the first Perhutani forest was re-certified in October or November last year. So, eight years of working. And through that process we got beaten up by an NGO that we know and love and care for, our friend Simon, g’day Simon, gave me great criticism and grief because I was working with an organisation that had a history of regularly shooting people.

But what I saw in Perhutani was a willingness to change, and they were changing. Slowly. In some districts we were working, not as fast as we would like and so there were slappings and meetings, but we always felt that the Perhutani people were serious about moving forward. And they did it. We wished at times that they moved faster. Other times, they were going OK. Sometimes, we’d say, “Hold on a minute, you’re moving too fast and you’re not putting capacity behind you.”

But our view was if we walked away from that partnership then we would have no chance to get the guns out of the forest and people would be killed.

REDD-Monitor: Can you say more about Perhutani and the guns out of the forests story?

Scott Poynton: Well, we started working in two districts, and we said to Perhutani, “First job is you’ve got to get the guns out of here, because you can’t be shooting people while we’re walking around here trying to get certified.”

REDD-Monitor: That’s the Perhutani rangers who were going around with guns?

Scott Poynton: Yes. And look, from a Western point of view that sounds pretty bad and evil, but I always said that you’ve got to understand that Perhutani rangers had regularly been beaten up too, coming across timber mafia guys with machine guns cutting down their teak forests. The guns were there in many ways to protect the rangers. Because when you’re walking round the forest with a gun and you find a dangerous situation, probably the first thing you’re going to do is pull it out of its holster. This was happening in a context of quite a lot of social pressure, poverty. Usually it wasn’t the timber mafia that were doing the harvesting. Sometimes, yes, they’d turn up with trucks and bulldozers and whip it down and you’d lose 20 hectares of plantations overnight. But usually it was the timber mafia guys going through middlemen saying to the local villagers, “Here’s ten bucks, go and get me a tree.” And of course the tree could be worth US$5,000 or more, but the poor villager guy, he’s got to put his kids through school, all the rest of it, and ten bucks is ten bucks. So he’d go out in the bush and be busy cutting down a tree and sometimes he’d get away with it. But sometimes he’d be encountered by Perhutani rangers and sometimes it ended fine and peacefully but other times it turned bad.

What was happening from time to time was that it would turn nasty, or the community guy would run away and the Perhutani guy would shoot him. The idea was to shoot him in the legs, but I guess aim is not always what it should be and sometimes people would actually get killed. Absolute tragedy.

For people like concerned NGOs, this was very bad. It was very bad for us as well. We actually said to these guys, we said to our members, “You can’t keep buying wood from these guys if they are shooting people.” But we had that leverage. We said it pretty clear to Perhutani, “You guys have got to change, you’ve got to get the guns out of the forest.”

That happened very quickly in the two forests we were working with, and the guns were gone within a year. We had conflict resolution systems set up with the communities, because there were land use conflicts from when the plantations were established 40 years ago. So we sat down and said, “We’ve got to solve those. That’s the root of the conflict. People are being disenfranchised.” As well as getting the guns out, we tried to solve the underlying problems that led to those conflicts. They set up a benefit sharing process. So they said to the communities, “You don’t need to take 10 bucks from the timber mafia guy. As we thin the forest, if you protect it, you’ll share the revenue, as the forest gets older and older. At clearfell you’ll get a lot of money.” And they had a system for that, they agreed it with the communities and they started paying it. So the community guys were going, “10 dollars and the risk of getting shot, or long term partnership where we can make much more and also grow our crops under the teak.” It started to look more attractive.

In those two districts we turned it around. The challenge was to expand it out to all their Districts. In fact, at the FSC General Assembly of 2008 in Cape Town, someone was shot in one of the newer districts we were working with. By that stage, we were working in six districts. We went ballistic about that. We said, “You know, either you get the guns out of ALL your forests by the middle of 2009, or it’s all over. We end the partnership, we tell our members to stop buying from you. Finished.” Perhutani was led then by a lady called Ibu Upik [Wasrin Rosalina], and to her credit she went ballistic and got every gun out of the forest by June 2009. Then it took FSC and the auditors some time just to prove that everything was OK. There was a shooting incident in November 2009 where we’d been around and figured we’d got all the guns, but some guy kept a gun, his own gun, it hadn’t been registered and he shot someone. Thankfully, he didn’t kill them. But slap, slap, lots of problems.

But really from then, and touch wood forever now, no one’s been or will be shot in Perhutani forests, because no one’s carrying guns anymore. There’s an arsenal down there with all the guns locked away. Land use conflicts have been resolved, benefit sharing systems are in place. It’s being rolled out across the whole of their 57 districts. The Perhutani guys feel more positive. There’s still some districts that are called “Red Districts”, where there’s a lot of tension. Java is one of the most densely populated islands in the world, there’s a lot of pressure for land, there’s a lot of social conflict, poverty, so you’re going to have these pressures when you’ve got whole plantations of old teak trees worth US$5,000 per tree. But we’re trying to get people to talk to each other rather than harm each other. And it seems to be working, step by step.

It’s been a fascinating project. And now five of Perhutani’s forests, the five we have been working on the longest, have been certified. And they are rolling the system out across the rest of their districts covering 2 million hectares. So we’re pretty proud of that project, because not only are European retailers getting furniture from responsibly managed forests, they are actually getting furniture that hasn’t been responsible for getting people killed. And we think that’s pretty good.

REDD-Monitor: What’s TFT’s position on REDD?

Scot Poynton: We think that TFT is doing REDD – a very different model from the one that has emerged from all the hot air at these COPs. The whole concept of reducing emissions through deforestation and degradation, great! Who is not for that? We’re for it.

Now we feel that ever since our inception, we’ve tried to stop illegal logging, tried to get forests better managed, we’ve been working on that very honourable goal. However, I think it’s naive to talk about REDD in those terms because the whole discussion around REDD, about two miliseconds after the idea was floated, got hijacked by the carbon offset market. When you talk about REDD you are talking about carbon offsets. And we are fundamentally opposed to the whole concept of carbon offsets.

We have been offered project after project, and millions of dollars. I don’t know where it was coming from, because people were tantalising us with millions of dollars to boost our wonderful little NGO and increase our turnover to run or to be part of a REDD project. And I think a lot of times trying to buy into our credibility. We just say thanks but no thanks.

Our view is that fossil carbon and biological carbon are two different things. Our mission in life is to reduce emissions, and bringing fossil carbon out of the ground does not reduce emissions. Thinking that you can offset fossil carbon with biological carbon is a nonsensical concept, pushed only by people wishing to make large amounts of money from it. So it’s a large amount of bovine excreta as far as I’m concerned. And we want nothing to do with it.

Unfortunately, I think the concept of REDD has been hijacked by offsetting. A much more mature, sensible discussion around REDD could have happened if the people promoting it originally hadn’t got so fouled in the hunt for money. They had this vision that it couldn’t work with government money alone, they had to bring in the private sector, and that meant motivating the private sector with profit, and that’s where it got fouled. Everyone forgot about the objective of reducing emissions. It wasn’t even removing emissions through deforestation and degradation, they forgot about the fact that you’ve got to reduce emissions from the power plants and the coal plants and all this other stuff that you’re trying to offset. So the whole thing’s been messed up, I think, which is unfortunate, because the concept was good.

REDD-Monitor: I think that right from the beginning, it was Kevin Conrad that introduced the idea of REDD at the Montreal COP in 2005. He did his degree at the Columbia Business School including whether carbon credits could provide as much income as logging in Papua New Guinea. Carbon offsetting was there from the start.

Scott Poynton: Yes. As I said, two milliseconds after anyone mentioning the idea of REDD it just disappeared off in this silly place and it’s never, as far as I’m concerned, emerged from it. At all the COPs and everything, it’s ridiculous that all these meetings since Bali, there are huge long lists of the mitigating things we’ve got to do to make REDD work. It’s chicken’s entrails towards Venus. Now there’s no chance. You’re talking about human, natural systems, and you’ve got to do this, that, hold your mouth to the left, dance on one leg, point your finger up in the air while pointing your bum to the ground. These things aren’t going to work. They’re trying to engineer a new and a natural system that is not to be engineered, so that someone can make money. And the objective has never been to reduce emissions. Every project that’s out there as you’ve so well chronicled on your website just has got hairs on it, it just doesn’t work. So what are we doing?

Meanwhile people keep talking to me about the Kyoto Protocol, “Let’s hope it can get signed again”, and I say, “Why? You know since they’ve signed the Kyoto Protocol emissions have gone up exponentially. Why do we want it? No thanks. Let’s have some other dialogue, a sensible dialogue around how the hell do we reduce emissions? How do we keep forests vertical? That’s all it is.”

Of course it’s beyond that when you talk to the energy sector. Yes, we do need money from the private sector, but we don’t need it to invest in this offsetting rubbish. I believe we need it to be invested through product supply chains. “Buy my palm oil because I’m not causing deforestation and degradation. Buy my garden bench because I’m looking after the forest.” And that’s where the private sector money comes in. It’s not the billions that everyone, all the large NGOs looked at their balance sheets and thought, “Yeah the donor money is drying up, let’s try and get this money to offset the loss of the donor money.” They also got focussed on the money. Everyone got excited by the billions of dollars that were going to saving the world’s forests and save the world’s large NGOs.

REDD-Monitor: You’re doing project work under something called “The Climate Tree”.

Scott Poynton: Not any more. I can tell you about the idea of The Climate Tree. We came up with it after getting a good education from people like Jutta Kill and Saskia Ozinga at Fern, and I take my hat off to them for educating me in the whole area of offsets. I spoke a lot with Jutta and Saskia and quickly realised that that was a world which I did not wish to enter, that it all smelled a bit. And I said, “The idea of giving money to support forest conservation is not a bad one,” and they said, “No. Of course. We agree.”

At TFT we thought about that, and a lot of companies we were working with on supply chains were also doing CSR projects. Some were even planting trees. I’m not against planting trees. But I’m more interested in protecting the forests we’ve got. OK, there’s a lot of waste land that wants planting, but in terms of overall benefit to the world, we’re better off protecting the forests we’ve got as a first priority and as a second priority let’s go and replant some forest.

But there were other projects where things didn’t stack up. And so we thought of this idea of setting up The Climate Tree as a mechanism by which people could support projects that they would otherwise not do – for example, if they weren’t buying a garden bench from Laos. There is a project in Laos that we’re running with community teak growers where this community has got all the teak, but at the moment none of our members are buying from there. And the communities were saying “Can you help us manage our teak better? Can you link us into global markets?” Well if we do that maybe we’ll keep some forest standing and maybe we’ll have a benefit for the communities, for the biodiversity because that’s natural forest there, the teak, and we’ll keep some carbon in the ground. As it turned out, we ended up getting donor money for that project. But that’s an example of a project where our traditional funding model didn’t work because our traditional funding model takes us to where the wood’s coming from that’s in the product.

We had a number of these projects out there and we thought why don’t we make this thing where we say to people, “You can fund forest conservation projects as your CSR thing.” And that’s where we came up with The Climate Tree.

A few years ago we were suggesting it to people and received some interest and funding. We still have a project operating under The Climate Tree, which is a tree planting project in Brazil where we helped our member to partner with ISA [Instituto Socioambiental], an NGO there, they’ve got a reforestation project going with some indigenous communities. One of our members, JYSK in Scandinavia and Germany, is funding that through The Climate Tree. And that’s great, they feel good about that.

It was a great idea, but the funding never really came through and we were so busy working on the supply chains that we never really had a chance to say with our members, “Oh and by the way, if you want to do something more you can go through this process here.”

With the name, ‘The Climate Tree’, we were trying to link the concept of philanthropy and CSR projects to keep forests vertical beyond what you were doing in your supply chain. But it never really took off, never really got going. We’d like it to, but, yeah.

We see it as a REDD project, as a way of REDD without offsets, no carbon measurements, no carbon trading, just here’s some money, go and protect that forest. Out of the goodness of your heart.

REDD-Monitor: The rest of the questions are focussed on oil palm. In May 2010, Nestlé became a member of TFT, after a high-profile Greenpeace campaign. What has TFT’s work with Nestlé achieved? And again, the same question as before, how can you prove that these achievements are genuine?

Scott Poynton: When we started working with Nestlé and they announced the partnership with us, they already had a no-deforestation commitment. They had made what they call a “no-deforestation commitment” back in December 2009, but they never really put any flesh to those bones about what it actually meant.

When we started talking to them, in the weeks after the Greenpeace orangutan finger video, before they announced their partnership, we talked about this. We said, “Look, you know, you guys don’t want to cause deforestation and Greenpeace don’t want you to cause deforestation, so there’s actually some common ground there.” Our role was to help Greenpeace and Nestlé talk to each other and build that common ground. And we did that through developing what we call Responsible Sourcing Guidelines.

We asked, “You don’t want to cause deforestation when you buy palm oil, in fact you don’t want any of your products to cause deforestation, but what do you mean by that?” We came up with five Responsible Sourcing Guidelines. The first one is it has to be legal. The second is that it should be sourced respecting the free, prior and informed consent of the local communities. The third: it has to protect high conservation value forest. The fourth: it has to protect peatland. The fifth: it has to protect high carbon stock forest.

It’s pretty clear what we mean with points 1-4, but back then we didn’t really have a clear picture of what we meant by high carbon stock (HCS) forest. We were trying to get at this concept of degraded forest. When people start talking about palm oil, they say, “Oh we’re going to establish another seven million hectares of palm oil”, most of the NGO community freaks out, the government or the industry says, “It’s OK, we’re going to put it on degraded land.” Half the NGO community says, “Ah, thank God for that.” And the other half goes, “Well hold on a minute, what do you mean by degraded land?”

There was never any clarity on that, no clear steer from government or industry on what that meant. With the HCS concept we were trying to define “here’s primary forest at one end, here’s grassland at the other. Somewhere along that spectrum is a point at which we may find consensus that that equals degraded. And below that you can clear it and establish palm oil plantations and above that you should protect it.”

The high conservation value concept captured a lot of that forest. There are a lot of companies in the world, if you look at a primary forest, they happen to have a sister logging company that goes and whips two trees out of it, it’s not primary forest any more, is it? So you’ve already got over the box of RSPO, where you can’t fell primary forest. But now because it’s not primary forest – we’ve taken two trees out of it – it must be secondary forest, so now you can clear it for palm oil, right? It’s still rich in biodiversity, you’ve only taken two trees out of it. It still could be home to indigenous communities, rich in medicinal plants for local communities, everything. It could be full of orangutans. But it’s secondary so we’re going to whip it down and plant a palm oil plantation.

That’s the worst case scenario, and maybe it doesn’t happen like that any more. It did. But working back down the spectrum, you’ve got these secondary forests that might not be captured by high conservation value assessment but still have biodiversity, social importance and store a lot of carbon. But where’s the line? One of the jobs we had to do with Nestlé was try to find where that line was. And as part of that we went to speak with all Nestlé’s suppliers. Nestlé sent a letter all suppliers saying “These are our Responsible Sourcing Guidelines (RSGs) and we’re going to work with you to help you to deliver those things. We’re going to engage with you and your job is to work with us. And if you don’t meet the RSGs today, it doesn’t mean we’re going to kick you out, but we expect you to make rapid progress towards meeting those guidelines.”

So it was about engaging and transforming. The TFT model. The Nestlé model too. They do this with other supply chains. Anyway, we got to meet with their suppliers, and one of the first suppliers we saw was in fact PT SMART, Golden Agri Resources (GAR). Actually, GAR wasn’t a supplier at that stage because they’d had their orders cancelled when the orangutan finger video came out. We had a chat with them and it was very clear from the start that they were serious. They said, “We believe we can meet these Responsible Sourcing Guidelines. We don’t know what you’re talking about with high carbon stock forest.” In fact no one did. “But we’re ready to have a chat with you about it. And in fact, we’re already protecting peat.” Because in February 2010, they’d made a commitment to no peat. “We’re already doing HCV assessments. We’re legal. And we’re doing FPIC. We accept that we might be able to do FPIC better.”

So they said, “We’re doing four of those things, we accept that we might be able to do some of them better, but we want to look at how we can do that and we’re interested in you guys helping us.” So, GAR jumped, interestingly enough, straight into the lead, in that they were actively trying to help us define this concept of high carbon stock forest. We spoke to other suppliers and got our guys out into plantations and mills to work out what was going on, and we started visiting lots of companies under the Nestlé project. But a project alone started developing with GAR, who nonetheless still had Greenpeace campaigning against them.

You asked the question, “How can we make sure that it wasn’t greenwash?” Well, all the while with Nestlé, we were giving Greenpeace monthly updates. And we met with them. So they were getting a monthly slide deck saying “We’re doing this, we’re doing that.” And of course, we were charged by Nestlé with liaising with Greenpeace, to keep them informed, to get Greenpeace’s feedback on what we were doing, so we still had Greenpeace in our neck. Because we were now standing beside Nestlé. So we had a lot of scrutiny too. It wasn’t as if TFT came and life is beautiful and Greenpeace said, “Oh fantastic, TFT’s here, we can relax now.” No. We actually said, “Don’t go away, we need you guys here to keep us honest.” And they did.

Then we had regular, face-to-face update meetings between Nestlé, Greenpeace and TFT, conference calls too. Meanwhile, work started to evolve with GAR and we began finding a way of getting Greenpeace and GAR to talk together, which came strongly forward during late 2010, when we met and there was a whole negotiation process and discussion around what needed to be done. There were some plots measured out in the forest to start looking at high carbon stock forest. This led to the February 2011 launch of GAR’s forest conservation policy which effectively mirrored the Nestlé RSGs.

At the time we were visiting other plantations and companies, reporting back, here’s the corrective actions, looking at Nestlé markets, tracing it back, product traceability. Big changes going on in Nestlé’s supply chains. All the while, the GAR work was not only bubbling away, it was really gathering pace. And so the GAR announcement in February 2011 leapt ahead and it helped us to define for Nestlé as well what we meant by HCS, which was provisionally 35 tons of carbon above ground biomass. At that point we had our definition, but we didn’t actually know what that meant, what it looked like on the ground. We had measured a few plots, we had an idea, but now we had to go out and find a way of predicting that in the field without having to measure every hectare of land in Indonesia that might be available for palm oil plantations. So we needed a rapid method of satellite photography and ground truthing.

Really from the first quarter until the last quarter of 2011, we were busy in GAR plantations measuring lots of trees. Meawhile, GAR had already said to Greenpeace, “We will not go into these areas, these areas, these areas.” They’d already had a sort of preliminary no-go agreement. GAR categorised the forests in their areas by canopy cover. They had HK-3, 2 and 1, which was high, medium and low density forest. They said, “We won’t go into any of those areas.” In fact, the HK-3 and 2 were being captured by the HCV assessment anyway. So they said, “We won’t go into the high carbon stock areas. We’re not clearing peat and we’re not clearing HCV, and we’ve got free, prior and informed consent.”

We made maps with Greenpeace and areas were marked “Go” and “No go”. “We’re not going in there, we’re not going in there. We’ll put our bulldozers over there first. It’s grassland. We’re clearly not going to be felling forest.” That unfolded through the year, as we went along with Nestlé, visiting people and transforming guys and identifying for Nestlé how to convert their markets to 100% RSG compliant oil.

Nestlé started buying again from GAR in September 2011, which told GAR it was on the right track. They bought an amount of oil from them just to sort of say, “You guys are doing the right thing.” In doing so, Nestlé made sure they knew exactly where it came from. So we started to send messages. After all, GAR is the second largest grower in the world, so people and the rest of the industry are watching.

All the while Greenpeace are in the plantations with GAR, watching what’s going on. We’ve got the scrutineers in the plantations with us, scrutinising our work and making sure that when we say we’re out there measuring the trees, we’re actually out there measuring the trees. We’re not doing a famous forest inventory from the office, which often happens in these countries. No we were out there up to our neck in peat, sun, mossies, dust and grief. Our guys came back with quality data, quality method; we got Indonesian experts and international experts to guide us on the method. It evolved over time. It improved, to the point where on 5 June 2012, GAR, Greenpeace and TFT released their report on their findings. They said, “We can now, with satellite photos and ground truthing, identify six categories of land: grass, young scrub, old scrub, low density forest, medium and high density forest. From the office, using satellite imagery, we can set aside the areas that shouldn’t be developed using this provisional HCS cut-off.”

Of course the other good news that happened is that Greenomics came out with their own analysis, saying, “Well, blow me down, GAR are actually doing it.” GAR have 151 estates and people said to us, “How do you know? You guys have got eight or ten people on the GAR project. How do you know that they are all doing right?” And we always said, “Well, others are looking for us.” Greenpeace have got a network of local NGOs that ring up and say, “Hey, GAR are clearing, PT SMART is clearing this land. You need to go and check this.” In the past that would end up on the front page of the paper. But because of the relationship, Greenpeace was able to say to GAR, “You need to go out there and check that area.”

Most of the time we found out that these were concessions that weren’t part of GAR; they were someone else’s land, and other times they said, “That’s happening and that needs to change. Or, yes, but that’s part of the area that we agreed was a go area.” So there was all this discussion happening, with multi-stakeholders coming together, instead of front page of the paper conflict.

As a result, we’ve now got ourselves with this provisional definition of 35 tons. Having published the HCS Study Report, GAR intends to develop its Action Plan for how it will proceed further. In fact, they are breaching the spirit of the law by not clearing the HCS. Because when you get given a concession, you’re supposed to clear it. If you don’t, you can lose it. But part of the work we’ve done with GAR, Greenpeace and Nestlé involves talking to the local ministries, the UKP4 [the Presidential Working Unit for Development, Supervision and Oversight] climate change unit, forestry ministry, agriculture, all these guys, to explain what we’re doing and hear their views. So there’s been many meetings, the so-called socialisation process, to tell people what we are doing. We’re together saying, “please don’t take these concessions away, because we’re really trying to do something innovative here.”

We’ve had a lot of support, people saying, “OK, tell us how you’re going.” Our meeting in June with the REDD+ Task Force was about sharing our findings. The team is developing the action plans to proceed further with the methodology and will announce this in due course. That’s the next step. Even though it’s voluntarily being protected now, we want to safeguard it. Because GAR could still lose their concessions. If a bupati wants to get cranky. Gone! “Give it to someone else who will come in and clear it.” We don’t want that, obviously.

Nestlé have been reorienting their supply chains, changing buying decisions, based on our visits to the plantations to motivate companies that are trying to do the right thing and to identify the ones not interested in engaging. And there’s been a big shift. And Nestlé are doing a great job. They are supporting us, they are changing their buying decisions.

Worst case scenario, we say, “This guy is lousy, he’s not interested in even talking to us,” and Nestlé say, “Yeah, but his oil is cheap.” We’re completely undermined. Well, it hasn’t happened. Nestlé have been able to go back to these guys and say, “Come on, you’ve got to do it.” And if they won’t do it, “OK, I don’t think we can buy from you anymore.” We’ve got that leverage.

We feel that through the partnership with Nestlé and the work with GAR we are bringing some transformation and possibilities to the palm oil industry that others had not only thought impossible, but attacked us about when we thought it was possible and that we could do it. Now people’s positions are starting to change when they say, “Maybe you guys are on to something.” So it’s really fascinating.

REDD-Monitor: Just to clarify on the monitoring. TFT isn’t itself monitoring all of GAR’s concessions.

Scott Poynton: We’re not running around all of them, not at the moment. Actually, up until now, no. We’ve been into around 15 of their estates to do gap assessments. We chose estates located in what we considered were “hot spot” areas where deforestation could occur – principally in Central and West Kalimantan – but also where we knew social conflicts were a problem. Our objective was to visit a cross-section of estates to get a broad view of the management approach, the issues and the company response. But that leaves about 136 that we haven’t been into. But they are run by the same managers and we have met and done a lot of work with the SMART Directors responsible for each region.

We don’t see ourselves as auditors. We come in and we help people to change their systems of management. We look at what they are doing in terms of systems of management and policies made in Jakarta. Are they being cascaded down through the organisation and being physically implemented on the ground? We look at the policies here and we go out into the bush. We don’t need to visit all areas. We get a sample, in West Kalimantan, Central Kalimantan, South, North Sumatra, all over the place. We get a sense of what’s going on. We meet the senior managers and directors, all through the organisation, and so we start looking at the systems. When we find that, “Hmmm, that’s not happening, that’s not happening, that is happening. Why is that happening here and not there?” So we start analysing the human resource structure. We’re almost business management consultants, actually.

In TFT’s early years, our approach was to get out in that forest and churn away in there. We found a disconnect, because the poor bloke out in the bush who we were beating up for not having done his assessments, not having done this or that, well he wasn’t getting any funding from head office. So he didn’t have the staff to do it. Or head office were going ballistic because they were screaming what the policy should be but the guy in the field didn’t have the capacity, training or budget to do it.

We found ourselves having to fix systems. Over the years, we developed a systems approach. So we don’t need to visit all of GAR’s plantations. Instead we’ve looked at them and said, “Weaknesses here, here, here. Here’s all the weaknesses in your management structure and your systems for managing your company. We need to change those.” And that’s the approach we’ve taken. Through that, you know, we started with GAR working behind the scenes I would say in mid-2010. We initially started talking to them in May 2010 at that first meeting of Nestlé suppliers. We really started talking to them about what we could do together in mid-2010. We didn’t announce our partnership until February 2011. That’s because we wanted to make sure GAR could commit to something serious before we made an announcement.

In that time, we visited plantations, looked at all these things, developed an action plan. The action plan is now being implemented. Through that time, we’ve had NGOs ringing up Greenpeace and saying, “You’d better come out here.” They say, “Oh, we haven’t visited that concession. What’s going on?” So we hear about it and then we go and have a look. And often we didn’t even bother to go and have a look, because it wasn’t a PT SMART/GAR concession. But the NGO network is generating this excellent information. They are our eyes and ears on the ground – there’s no formal partnership – but just by them doing what they do best i.e. report concerns from their direct observation, we’re getting a lot more useful information without us having to visit every estate. We’re saying to GAR, “You see, that’s because that system isn’t working there either. You need to fix that.”

Now with GAR we’re saying we need a monitoring system by estate. Every estate should have a monitoring visit. And it should have a score card that gives them, against the various criteria, their score. We go back three months later and say, “We asked you to do these five things last time and you haven’t done them. So you get a kick up the bum.” Or “Actually you have done them and you’ve done even better and here’s your score now.”

So you start encouraging people to get a high score. Then GAR can incentivise people and say, “OK, if you’ve increased your score to where your target was, you get extra pay, or a bonus. If you increase your score to that plus another 25%, you get a double bonus.” They can start having those discussions. People are incentivised. You make a race to the top. Whilst up until now, we haven’t really done that, the annual plan that we’ve just submitted to them, starting in April, contains that. We expect to get out and around all of the estates. I still don’t think it’s necessarily critical, but it is a role that we can play to accelerate the transformation, because we’re dealing with systemic stuff from their main office down into the plantation operations. There are lots of issues with these companies, but we’re dealing with those and we’re going out and trying to visit all those guys and monitor how’s it’s going. So it’s a different approach, but an added one.

REDD-Monitor: I have the same question about free, prior and informed consent. How do you check up on the company? How do you check that a company is applying principles of free, prior and informed consent?

Scott Poynton: Again, let’s use GAR as an example. On 9 February 9 2011, we announced the Forest Conservation Policy. All through that, starting in September 2010, our guys were doing a systemic review of GAR, with a view to coming out with an action plan in March 2011. But the whole push around the forest conservation stuff accelerated because of the Greenpeace campaign.

Underlying that, of course, GAR were under the RSPO Grievance Panel. The need to be RSPO-certified addresses all those things. While I was involved with the negotiations with Greenpeace and GAR, our team was out on the ground visiting plantations looking at systemic weaknesses. So we were developing an action plan to look across the whole thing. Then, two weeks before we announced the Forest Conservation Policy, a headline in the paper here in Jakarta announced: “Six people shot by Brimob, the police force, with rubber bullets in a community estate managed by PT SMART in Jambi”. Bugger. So here we were, we’re all excited, we’ve got this agreement with Greenpeace, we’re thinking this is pretty good, and whilst we were looking at those other things, the real leading part of our relationship was on the forest stuff, forest conservation, we got bitten on the bum by this incident in Jambi.

No one got killed, thankfully, but people were shot. Rubber bullets, not good. Other NGOs might say, “Oh no, this is outrageous,” and run away. Not the TFT’s approach, because we talked to GAR about it and it’s very clear that they didn’t want that to happen, it was a mistake, things had gone wrong. It was deep conflict for a long time in that area and it actually wasn’t one of their estates, it was a community estate, where the community was fighting amongst themselves and GAR was providing management service to the community cooperative. Within the cooperative there was conflict, and some of the community said, “We’re going to harvest the fruits.” They started doing that and the cooperative leaders said to GAR, “What are we going to do? We want to call in the police.” And GAR’s response was, “Yeah, you’d better, because we don’t know how to handle it either.”

Of course the police came in with guns and plastic bullets and everything got out of control. You can see it with hindsight, right? I don’t blame GAR for that. These are conflict situations and the GAR people are scared also – they’re not soldiers, they’re you and me, doing a job. But it got out of control, so we said to GAR, “OK, let’s go to Jambi and let’s bring the social aspects up in our action plan and let’s use this conflict as a case study. Take your people and let’s build capacity. We’ve had this experience with Perhutani with guns, so let’s take our good guys from the Perhutani project and get them out there and start helping you guys look at how you can manage these conflicts better.”

And that’s what we’ve done. We’ve started with Jambi and the communities were relieved that someone came in. At TFT we’ve got a wonderful guy, Agung. He is just an expert at this stuff. He went up there and had meetings. He held the meetings in the right way, with the right cultural protocols and so on, and the feedback we were getting was, “Just send Agung up here and sort this mess out.” People weren’t evil, there was just a disagreement that needed sorting. Unfortunately it escalated out of control. Over time there were agreements reached and things improved. During that we said, “OK, great, Jambi, but we know GAR has got conflicts in other plantations.”

What you needed was a social and community engagement policy that would overarch and underpin all of your engagement with communities. We helped draft that with GAR and then said to Greenpeace again, “Please help us to reach out to the social NGOs here in Indonesia, we want to share this with them, we want to get their input into it.” So there were a couple of good meetings, I think middle and late last year, with those NGOs giving feedback on the social and community engagement policy. Initially, of course, it was very suspicious. But the communities met with senior management, and Daud Dharsono, PT SMART’s president director, went and he said, “I’m here. I want to do this. We’re not here to muck around. We really want to do it.” And the communities, the NGOs, said, “OK, fair play.” They made some criticisms, Pak Daud said, “Help us to fix this.” And things have started to get better.

It’s not perfect. They’ve got 151 estates. There’s a lot of work to do. But that’s now being rolled out. And GAR released their social and community engagement policy. There’s a conflict just happened two, three days ago, I think in north Sumatra, where again there were some bullets fired and the police came in. This was a different case, where people were actually stealing the fruits. Pak Daud said, “We’ll get up there and we’ll find out what’s going on.” But we’ve got to roll out this whole policy more broadly, and part of our action plan is to do that.

So, again, how do we know we’re doing the right thing? Well, it’s the engagement of the local NGOs. It’s not TFT going in there and saying you’re doing a great job, guys. We do communications that say good things about our members when they do good things, but it’s generally not lavish praise, it’s certainly not slavering at the mouth. It’s “this is a good thing”, and sometimes people need a pat on the back too. But by linking GAR in with the local NGOs and with Greenpeace, they get feedback they need and scrutiny they need. We haven’t got enough people to scrutinise the buggers. We haven’t. So we need that local NGO network to say, “Hey, you’ve got that great policy, but that’s not what’s happening here.” “OK, hotspot. Let’s go out and sort that. We’ve got to put resources out there.” That’s the way we try and get it.

And then that whole systemic approach. What do we learn from Jambi? This broke down, that broke down. It should never have got to this point, so make sure across your other estates we change the system to make sure that works. And that’s why we take this systemic approach rather than case-by-case approach.

REDD-Monitor: This isn’t specifically about what TFT is doing, but what TFT is doing raises this question, I think. Sinar Mas is expanding its operations in Liberia. In the REDD terminology, there is a risk of “leakage”. The better you are in Indonesia at pinning down Sinar Mas and saying “You can’t keep expanding like this, you’ve got to change what you’re doing,” Liberia could start looking more and more attractive. How do you attempt to address that kind of leakage problem?

Scott Poynton: We addressed this issue when we were putting together the Forest Conservation Policy back at the end of 2010. In fact, we had a lot of discussion around that because the Greenpeace guys were saying, “Don’t think you can do all this joy in Indonesia and trash forests in Liberia.” So we had a lot of discussion around that.

Golden Agri Resources is the majority investor into a separately founded and managed company Golden Veroleum (Liberia). It is a different team of founders and management, but of course the investment link is significant. So there was a lot of discussion about how far they could go, in terms of controlling the operation. Eventually, I would say to their credit, they came out with their Forest Conservation Policy which states that it applies to all operations that GAR owns, manages, because they can manage it without owning it – owns, manages, or invests in regardless of the stake. So it’s pretty amazing, actually.

And so they covered off Liberia like that. Having said that, has TFT been out to Liberia to have a look at what’s going on in Golden Veroleum plantations? No. We’ve discussed the need to do it. GAR has sent some of their own people to have a look. The sense is that where they are looking to get started, they don’t have a forest issue. They may have social issues. There are social issues in Liberia. GAR’s Forest Conservation Policy talks about Free, Prior and Informed Consent as well. So, you know, they can’t just go away and say, “No, it’s OK, there’s no forest there, we’re just going to ignore the livelihoods of the communities.” So they’ve got to watch that too. I’m not saying that they’re doing that, it’s just something that they must watch for.

That discussion has now gone forward to the point where Golden Veroleum are connected directly in with Greenpeace, who are doing their own studies of the forest to look at what the situation is there. I’ve not been involved, but we don’t have to implement everything for them; we’re quite happy for them to partner with other people, just so long as the work has been done. Box has been ticked. What Golden Veroleum management have said is that they want to engage directly with Greenpeace to discuss all of the issues on where the forests are and that’s getting started right now.

I think to GAR’s credit they came up with a policy that looks after that issue. I think it’s pretty amazing. And we didn’t have to slap them. They got it. They got the logic of it.

REDD-Monitor: Asia Pulp and Paper is also a part of Sinar Mas and Greenpeace has now moved from campaigning on Sinar Mas’s palm oil operations to its pulp and paper operations. APP doesn’t seem to get it at all. APP is doing little to improve its operations, apart from a PR campaign.

Scott Poynton: They are doing a PR campaign, but GAR and APP do talk to each other. APP recently came out with a pledge to do the high conservation forest assessment on their operations. And yes, NGOs, Greenpeace, WWF and others say, “You’ve made that commitment before.” I can only say that I remain hopeful that APP is going to do those things now. They’ve engaged experts and professional consultants to make this happen. In their announcement on May 15 and when they talked about their roadmap, the consultants were there with them. The work’s actually ongoing, so I’m not familiar with what happened in the past, but I know they’ve engaged consultants now, they announced that in June, and that’s encouraging. Yet, on the counter side, the assessments are so far only in their own estates and these need to be rolled out to all their suppliers. They’ve committed to doing that and it will be key going forward that these assessments cover their entire fibre supply as soon as possible.

GAR and APP are marketed under the same Sinar Mas brand and have common shareholders. But they are run separately with their own boards and management. They talk to each other. Let’s hope that they are seeing what’s happening with GAR and that’s giving them a chance to look at how another part of the company is operating and a different model going forward.

REDD-Monitor: APP is an extraordinary company. It ran up US$13 billion of debt to build a handful of pulp mills. US$1 billion builds a world class, enormous pulp mill. They’ve got two or three in Indonesia and then a few more in China. So, where did all the money go? Meanwhile, even WWF is running a campaign against APP. It’s unusual for WWF to run a campaign against a company. APP now has plans for what would be the biggest pulp mill in the world in Sumatra. They are already struggling to supply their pulp mills with wood from plantations. And Greenpeace just caught them cutting down ramin which is illegal in Indonesia. What do you see that could APP do to improve things, and how could they do this?

Scott Poynton: I can’t speak for their finances, but I think that the issues Greenpeace are attacking APP for are similar to those they were attacking GAR and other companies for. These are issues around peat, high conservation value forest, high carbon stock forest, community conflict. So in a sense what APP has to address is very similar to what GAR had to. A pulp mill needs feeding all the time, so does a palm oil mill. The industries are run a bit differently, and structured differently, but essentially the fundamental underlying issues are the same.

APP needs to look at the issues of HCV, which they appear to be doing now. Time will tell. They do have social conflict. They have issues with peat because they are in Sumatra where there’s a lot of peat. And of course, they’ve got issues with secondary forest, which might fall under the high carbon stock area but still support rare and endangered species such as rhinos and Sumatran tigers.

The company needs to take a holistic view of where it wants to go in the future. Does it want to spend the rest of its life being beaten up by NGOs? I don’t think it can sustain itself like that. It’s lost a lot of customers already, and needs to look at its overall management approach and the way it deals with these issues to move more into the realm of responsible management and starting to tackle these issues in a holistic, strategic way.

Of course overarching that is the comms, and the comms have been, I think, difficult. Greenpeace have attacked them, they’ve attacked back. This is very typical. GAR did it before. Most companies do that. Opening a dialogue with Greenpeace is the way to go. So I think the opportunity’s there. Looking at what GAR’s done is a bit of a system that they could follow.

I’ve met with people from APP from time to time, and I believe there’s prospects, I believe there’s hope. I think there’s a new generation of management coming through that doesn’t want to continue on in the same way. My fingers are crossed that with this push now of the HCV assessments, we’ll see some really serious change. Once they sense that change is OK, it’s like you put on a new shirt, it’s a bit scratchy when you first put it on, and HCV assessments are a bit like that, but actually when their customers applaud them for their efforts, they’ll start thinking that this is OK.

I like to be optimistic about these things. Yes we’ve lost a lot of forest in Sumatra over the last 20, 30 years, Kalimantan as well, but it’s never too late. Well actually it can be too late of course, when the last tiger’s gone we’re in trouble, but let’s cross our fingers that it doesn’t get to that point. I remain hopeful. I hope not naïvely so.

REDD-Monitor: When TFT first came up with the agreement with GAR, one of the biggest critics was Greenomics Indonesia. Part of the argument was that a lot of GAR’s subsidiary companies’ concessions didn’t fully comply with Indonesian regulations. Are these concessions excluded from the TFT agreement, at least until the concessions are brought into compliance?

Scott Poynton: Greenomics came out with that report and I think they more or less accused TFT of giving GAR greenwashing cover, in a not necessarily pleasant way, you know there’s blood on the cover of their report, all that sort of stuff. We’d had criticism before but never so much as that. Of course, we’d already spoken about this with the guys in GAR and I think Pak Elfian at Greenomics got it wrong. We’d spoken about it a lot and GAR has given us a lot of evidence which GAR has crawled over with a fine-toothed comb.

The concessions in question are in Central Kalimantan. If you look at the law as it stands, in 2006 a decree came out that effectively revoked a law that was passed back in 2000. It meant that concessions that were established legally from 2000 no longer complied with the law. There’s a whole series of laws that were started in the 1990s, that said you can do this and that, and they changed. GAR changed with them each time.

I don’t have all the details to hand, but there was a time when this first happened when I had all the details because it was such a hot issue and we were asked about it a lot. There was a difference between a provincial law and a central government law, and the provincial law was the governing law by which GAR managed and established their plantations. No one disputes that. It was not just GAR; other palm oil companies in Central Kalimantan had this problem too. It was reviewed in 2000, I think, by the central government which said, “Yes, that’s the law.”

Personnel change, things change. In 2006, the decision made in 2000 was revoked. What it effectively meant was that companies that had been following what they thought was the legal spatial planning map for establishing plantations to that point had six years of illegality given to them overnight.

Now my view having looked at this with GAR and having spoken with our Indonesian guys who study this stuff and know it, it seems clear that that’s what happened. So GAR and other companies have gone to the provincial government saying, “What’s going on?” Of course, they could pay fines and could get themselves a new licence and they’d be OK overnight.

They weren’t small fines, but it wasn’t the amount of money that was the issue, it was, “If we pay the fine, we are saying that we acted illegally, and we don’t believe we did.” I think what happened with Greenomics is that they looked at the law and all of the information as it was in 2006. Greenpeace had also mentioned this issue in one of their earlier campaign reports. GAR has always said, “This is public. It’s part of the illegal logging task force, the Anti-Mafia Law Task Force. So we have never tried to hide it.”

I wrote to Pak Elfian and I tried to explain this and we didn’t get anywhere. I guess we agreed to disagree. But my view was, and GAR’s position on this was, we are working with the central and provincial government along with the other concession companies in Central Kalimantan who have had the same thing happen to them, we’re trying to find a way forward. We are trying to apply for the licences that in retrospect we were told we had to have. It’s a process.

I haven’t asked them about where they are on that. A few months ago I asked them, they said yes it’s moving forward and we’re getting resolution. Meanwhile, companies are in compliance with regard to permits in Central Kalimantan based on Provincial Decree no. 8/2003 which is still valid. So it was an impasse. I don’t think Greenomics reported that correctly and we had an argument about it, unfortunately.

REDD-Monitor: Greenomics recently put out another report about three of GAR’s concessions. Can you please say something about that.

Scott Poynton: I would say hats off to Pak Elfian at Greenomics. Because he was so strident in his criticism of the partnership when it got started and I believe, without criticising him, with justification, he and other NGOs have seen this sort of partnership come along, that have been hot air and just some stupid announcement that seems to solve the problem and nothing changes. So fair enough to him, at the time he was cynical. Really cynical. And of course he had this legal issue in Central Kalimantan that heightened his cynicism and the sense that TFT was somehow greenwashing. So fair enough. We disagreed and we agreed to disagree.

Now unbeknownst to all of us he’s done this investigation, we didn’t even know it was coming, then suddenly it appears on Mongabay. And I read it and thought well I’ll be blowed. Knock me down with a feather. Take my hat off to Pak Elfian. Because he could have looked at that and said, “Oh, I’m not going to put that out. They are really bad guys, I hate them.” But I have a lot of respect for him because he showed his honesty, really. Everyone always assumes NGOs are sweet and honest people, and that’s not always my experience in my 12 years with TFT and my time as a consultant before that. Mostly it is, but not always. He’s proven that he’s an honest guy and I respect him for coming out and saying well actually they are doing it.

For me, this is a far better verification system than getting an auditor who you pay to go out there and tell you that you’ve done a good job. Pak Elfian has done an independent assessment, he’s got satellite data, he’s looked at Ministry of Forestry data and he’s put his hand up and said, “These guys are actually doing it.” And to me, you can’t buy that sort of verification, and communication. I mean if you pay a PR company US$10 million you wouldn’t get that.

REDD-Monitor: There are some criticisms in the report as well.

Scott Poynton: Fine. That’s OK. Good.

REDD-Monitor: How do you deal with that?

Scott Poynton: Over the years people have asked TFT, “How do we know that what you’re doing is right?” And I say, “On our website is a list of all the people we’re working with. You can visit them, you can visit the factories any time you like. And if you find a problem, OK, put it on the front page of the paper. But tell me too, because we’d like to be able to fix it. You won’t find anywhere on our website telling the world we’re perfect, that we don’t make mistakes and are the duck’s nuts.”

So Pak Elfian has identified some issues. Even he says they are not major ones, but he’s put them to GAR and they’ve said, “OK, we’ll look at that.” They’ve felled some endangered tree species. But these could be species in scrubland. It could be a remnant tree. It doesn’t mean that they did anything against the law. It wasn’t illegal. But what might they have done to protect that endangered species? Pak Elfian only knows that they had done that because they’ve declared it. They haven’t tried to hide it; it’s on the Ministry of Forestry records.

In that sense they haven’t done anything morally wrong in that they could have put that down as a non-endangered species, but they’ve listed what it was and they’ve paid the appropriate royalty for it. That doesn’t mean it came out of a primary forest. It came out of, as Pak Elfian has found, secondary forest, that was degraded, that they were clearing.

I think these were minor things, but you know, it would just be a case of saying to GAR, have a look at where you find rare tree species in the degraded land, maybe have a second look at it, and think about what you might be able to do. Maybe it’s below your provisional 35 tons carbon threshold, but is that a patch you could nonetheless protect? You’ve got to understand that to protect something and have it ecologically viable, it’s got to be a decent sized patch. If you have just a tree out in the middle of a scrubland it’s going to die, so GAR could protect it, but in five years’ time, one year’s time, it falls over in the wind and dies anyway.

So I feel that those criticisms in the report weren’t loud, banging on the table criticisms, just commentaries that this happened. GAR has said they will look at it. We’ll look at it. But part of the work we’ve done on the HCS is looking at size. It’s no good just setting aside a patch of forest. When you ask the experts, we’ve had people tell us ten hectares is OK, most people say 200 hectares, because of the edge effects. The HCS stuff, I think it’s 20 hectares, but there’s huge edge effects, so unless something’s a decent size, our objective with setting aside the high carbon stock forest is to regenerate to become a forest again. Forest restoration. It’s got to be a decent patch of forest for that.

So if you’re coming along in your bulldozer and there’s a rare tree there, poor little fella out there on his own, and there’s a whole lot of scrub around him, he ain’t gonna make it. So, what do you do? Leave him there? It’s a bit like those pictures you see in Brazil with all the Brazil nut trees and all the fire underneath them burning them to death. “But we didn’t cut them down. We burned the bejeezus out of it, but we didn’t cut it down.” You know what I mean? It’s a bit cynical. I think in that sense, the fact that GAR’s cut it down and declared it on their declarations to the Ministry of Forestry shows a company that’s more honest, that’s not trying to hide anything.

But the ultimate finding in the Greenomics report was that GAR is protecting the forest that they said they would. And I’m thrilled to bits about that. Because for us it’s just another verification that we’re working with a good partner. We’ve been out into their forest, we’ve seen them doing it, but maybe they did that because they knew we were going to that plantation. To have Pak Elfian randomly check three concessions makes me feel good.

Still, there’s work to do. We’ve got to get the social issues sorted out, we’ve got to make sure that this HCS thing gets into law now and passed, we’ve got to make sure that buyers come to GAR and say, “We want to buy your oil.” Because in the same sense that we wrote the publication “Good wood, Good Business,” I want “Good oil good business”. Why aren’t companies swamping GAR with orders? “We want your oil.”

One of the things we haven’t touched on is that we are no longer members of the RSPO because of some of the things we’ve seen. Under the RSPO standard, you can deforest, you can cut down secondary forest, you can clear peatlands. Far from companies saying we will buy RSPO oil and be sustainable, you can still be cutting down valuable forest, peatlands, secondary forest. But under the policy that GAR has adopted, you can’t do that. Under the policy that Nestlé has adopted, you can’t do that. So why aren’t people asking for “No deforestation” palm oil, instead of dressing up this RSPO thing as supposedly sustainable? Our view is that if you’re clearing peatlands and pumping massive amounts of carbon into the atmosphere, you’re clearing secondary forest that could otherwise regenerate into, not primary forest, but into forest again; this is hardly sustainable.

So we’re at odds with companies that attach their policies and everything to the RSPO. In fact, companies are coming to GAR, but we want to catalyse that further. When other growers see buyers going to GAR they’ll say, “What’s going on over there? How come they are getting all the orders?” “They’ve made a no deforestation commitment, mate. Why aren’t you doing it too?”

We feel we’re on the threshold of transforming the palm oil industry. But there’s a lot of work to do. It’s a tipping point. It doesn’t mean everyone is going to flop over tomorrow. Guess what, we’ve shown that it can be done. Elfian’s reaction a year ago was just fine. Understandable. “Yeah, yeah another palm oil blah, blah.” And to his credit he’s now come out and said, “Well blow me down, they are doing it.” And to me, that should be a signal enough for buyers to come to GAR, and also for buyers to say to their suppliers, “Why aren’t you doing what GAR is doing? Because we don’t want our palm oil to cause deforestation either.” That’s what we need to happen.

Coming back to your original question, then we might be getting some REDD. We might actually be getting some reduced emissions from deforestation and degradation. Without any touch of offsets. No discussion of offsets. Just because a buyer said, in this case Nestlé, “You know what? We don’t want our palm oil to cause deforestation.” They’ve put money into it, by funding us to get out there and do our work. But they haven’t claimed offsets, haven’t talked about their carbon footprint. All the language of REDD hasn’t been in the discussion. Just through supply chains. And that is the way we need to go to protect the world’s forests, as far as I’m concerned.