Sime Darby: Developing Sustainable Futures
Sime Darby's Response to Sarawak Report's Article

Sime Darby has not “cultivated” or “influenced” Jeffrey Sachs to become a “Champion” for the group

Sime Darby Bhd refers to Sarawak Report’s article entitled, “Top US economist Jeffrey Sachs was ‘cultivated’ and ‘influenced’ to become a ‘champion’ of Sime Darby – Exclusive!” published on 12 November 2011 in which certain allegations and assumptions are made, linking Sime Darby with the activities of FBC Media UK Ltd, a London-based public relations company.

While it is indeed correct that Sime Darby had previously retained FBC Media UK Ltd in November 2007, together with several other brand and communications consultants to implement and manage a strategic brand and communications strategy for Sime Darby, FBC’s services were terminated in November 2008, owing to a divergence of views on a number of issues. Accordingly, it was not for any “illegal PR campaign” as alleged in the article.

The Sime Darby of today is the result of the merger of three large and established Malaysian companies – Kumpulan Guthrie Bhd, Golden Hope Plantations Bhd and Kumpulan Sime Darby Bhd. The merger was the largest in Malaysian corporate history and created the world’s largest plantation company, which was listed in November 2007 on Bursa Malaysia. Today, wholly owned subsidiary, Sime Darby Plantation Sdn Bhd, is the world’s largest producer of certified sustainable palm oil with more than 60% of the palm oil it produces certified by the Roundtable on Sustainable Palm Oil (RSPO).

The Sime Darby brand is itself 101 years old and despite its success, size and heritage, the company had not established a brand presence for itself. The primary thrust of the brand strategy after the merger in 2007 was to establish and project the “new” Sime Darby brand on a global platform. There was never any intention, stated, implicit or suggested, that FBC embark on a greenwash campaign to boost the company’s image. Sime Darby was then and remains committed to sustainability. Any statements Sime Darby makes to illustrate this commitment are based on facts.

  1. Allegations regarding Professor Jeffrey Sachs and the Earth Institute:
    1. Sime Darby did not directly or through its agents make any attempt to “seduce” and/or “court” one of the world’s leading and most respected economist with a holiday on Carey Island. The Carey Island estates belong to Sime Darby Plantation. They are working estates and 77% of the island is planted with oil palm. (For the record, the island was cultivated in the early 20th century by Valentine Carey, a British planter.) While Carey Island is an excellent and working example of sustainable and best agricultural practices, a visit to Carey Island could never be described as a holiday by anyone.

    2. On 1 August 2008, Professor Sachs was invited to visit Carey Island to view for himself the protocols and procedures that are employed to ensure the sustainable development of oil palm. It is a well known fact that Professor Sachs believes in and is a strong advocate of sustainable agricultural practices. It is also true that little is known of oil palm cultivation methods and the best practices of companies such as Sime Darby Plantation outside the industry. Conversely, there is a lot of misinformation that has circulated over the last few years on the entire industry and of late on Sime Darby Plantation. Regardless, the facts should speak for themselves and Sime Darby Plantation remains deeply committed to sustainable agriculture. To address this chasm between truth and fiction, Sime Darby Plantation regularly meets with various stakeholders to engage and educate them on the actual policies, principles, protocols and practices observed and employed at its estates and the relevant facts pertaining to the palm oil industry. Professor Sachs was one such person. There was never any intention to portray or use Professor Sachs as a champion, third party endorser or spokesperson. Sime Darby has no knowledge of and has not endorsed any statements to the contrary that FBC allegedly made to its other clients. Any statements Professor Sachs may have made about Sime Darby were based on his knowledge of our operations and commitments to sustainable agriculture. Similarly, any presentation made by Sime Darby to Professor Sachs would have been factual and an accurate depiction of the company’s practices, policies and procedures.

    3. Sime Darby has no knowledge of Professor Sachs travel arrangements to Malaysia. If indeed he did travel by private jet, it was not at Sime Darby’s expense. Sime Darby does not own a jet.

    4. Both Sime Darby and the Earth Institute share the common goal of furthering the cause of sustainable agriculture. Sime Darby committed the sum of USD500,000 to be paid over the span of two years for consulting and other advisory services on the development of Sime Darby’s sustainability framework and the formulation of sustainability programmes and initiatives within the group. Sime Darby is still a member of the Earth Institute and we remain committed to the principles of sustainable development. The commitment to the Earth Institute is not part of any PR exercise and has not been used for publicity purposes by the Group’s PR department.

  2. Allegations on Sime Darby Plantation’s estates in Sarawak

    1. Sime Darby Plantation has not cleared “huge areas of coastal peat forest in Sarawak” as alleged in the article. Of the 48,000ha of plantation land managed by Sime Darby Plantation in the state of Sarawak , 5,700 ha or 11.8% is on peat. All plantings on peat are managed to the highest standards prescribed by the RSPO. It must also be noted that most of Sime Darby Plantations estates in Sarawak were planted up between 1997 and 1998, except for a small 1,000 acre patch that was planted in 2001. In January 2008 Sime Darby Plantation implemented a policy that disallows any further development on peat soil.

    2. Sime Darby Plantation has no estates on native customary rights (NCR) land in Sarawak.

    3. The engagement of foreign labour is not done as a “preferred practice” but is a measure taken to address issues of low supply of labour from the local labour market. To address this, regardless of their nationalities, Sime Darby Plantation’s workers are paid the same rate based on the laws of the country they work in. There is no wage discrimination between local and foreign labour in estates. Sime Darby Plantation was the first Malaysian company to increase the wages of estate workers to RM850 a month, which is supplemented by other benefits such as free housing, subsidised utilities, schools, crèches, monthly allocations of basic food items such as rice and cooking oil, medical and recreational facilities.

    4. Sime Darby Plantation does not and has never “grabbed” land from anyone. Sime Darby Plantation fully respects the customary rights of the communities in which it operates in and fulfils the Free, Prior and Informed Consent requirement enshrined under the Roundtable on Sustainable Palm Oil’s (RSPO) Principles & Criteria, and under Article 32 of UN Declaration of Rights of Indigenous People, in all areas it operates.

     

  3. Allegations on Liberia

    1. Sime Darby Plantation (Liberia) Inc (SDPL) has not relocated any local peoples during the planting process in Liberia. As of 30 September 2011, SDPL has paid USD1,348,978.94 as crop compensation to 2,132 farmers who have AGREED to let their land be developed by the Company after negotiations were completed. SDPL does not and has not cultivated any land for which it has not received the agreement of villagers, a requirement under the FPIC guidelines under the New Planting Procedures (NPP) of the RSPO.

    2. Sime Darby Plantation undertakes Social & Environmental Impact Assessments as a standard operating procedure before any development begins, regardless of the country in which these plantations are to be developed.

    3. SDPL ensures that local communities benefit from employment opportunities as well as the best-in-class housing facilities and other amenities we offer our employees. This includes medical clinics, schools, crèches, places of worship and recreational areas. The guidelines on provision of amenities apply to all of our operations, regardless of geography.

    4. Sime Darby Plantation adheres to local and international labour laws when paying its plantation workers. This also applies to its operations in Liberia, under SDPL.

    5. SDPL was fined USD10,000 by the Environmental Protection Agency of Liberia for non-compliance with regulations on the storage of agro-chemicals and not USD50,000 as reported. This was also a breach of the company’s own internal policies and procedures and action has been taken to ensure that such contraventions, however minor they may be, are not repeated. SDPL, while new, is required to observe all the best practices its parent has adopted. SDPL has complied fully with its obligations under the concession agreement.

     

Sime Darby welcomes and appreciates constructive dialogue between stakeholders. The Company made a serious commitment to sustainable development in 2007 with the merger of the three companies that today form the Sime Darby Group. The commitment to sustainable development predates the merger as all three companies involved were already leaders in best agricultural practices. As far back as 1989, the zero burning policy was implemented for new plantings, winning the company the Global 500 award from the United Nations Environment Programme in 1992. Sime Darby Plantation is a founding member of the RSPO. Sime Darby Plantation has committed to ensuring that all its estates are RSPO compliant by the end of this year.

Sime Darby recognises the need for credible news organisations and the free and fair reporting of information. If there are any further queries on this or any other issue, please contact:

Leela Barrock
Group Head, Communications & Corporate Affairs
Sime Darby Berhad
Tel: (603) 2698 7669
Fax: (603) 2698 0645
E-mail: leela.barrock@simedarby.com

Amir Mahmood Razak
Head, Divisional Corporate Communications
Sime Darby Plantation
Tel: (603) 5622 1917
Fax: (603) 5632 5013
E-mail: amir.mahmood.arazak@simedarby.com

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