JAKARTA — The United Nations has called out Indonesia’s No. 2 palm oil company for alleged human rights and environmental abuses, the first time it has singled out a company rather than the industry.

Various U.N. agencies and officials have long highlighted issues within the palm oil industry in Indonesia, the world’s top producer of the commodity, but this time the specific allegations are against PT Astra Agro Lestari (AAL), the second-largest palm oil company in the country.

The allegations are laid out in letters sent in October 2024 by a group of U.N. special rapporteurs to AAL; its parent company, Astra International, one of Indonesia’s biggest conglomerates; Jardine Matheson, the Hong Kong-based conglomerate that’s Astra’s parent company; and representatives of the governments of Indonesia and China.

The letters raise concerns about systemic human rights and environmental abuses linked to AAL’s palm oil production on the Indonesian island of Sulawesi.

For one, AAL and its subsidiaries allegedly operate without necessary permits on Indigenous ancestral lands and farming communities’ land, without the free, prior and informed consent (FPIC) of the Indigenous residents and without meaningful consultation with the farming communities, the rapporteurs said.

As a result, communities affected by AAL’s operations have repeatedly called on the company to return land taken without their consent over the past several years.

But when affected communities peacefully protest against AAL, they’re often met with violence on the part of local police, military or private security forces hired by the company, the rapporteurs wrote.

In some cases, protests are followed by arrests and imprisonment of community leaders, sometimes based on fabricated or trumped-up charges, they noted.

“The violence, intimidation, criminalisation of demonstrators and the overall impunity have generated an atmosphere of fear and violence, which deters communities from continuing to actively defend their land and rights,” the rapporteurs wrote. “The criminalisation of community members diverts community efforts to free those criminalised rather than requesting accountability from corporations.”

The rapporteurs said they’re “seriously concerned” about the alleged intimidation and criminalization and called on AAL to end the persecution of individuals defending their land and their rights.

Besides land grabbing and intimidation and criminalization of local communities, AAL also faces allegations of environmental degradation, such as pollution of water resources.

If true, these allegations would violate the “rights to housing, land and property, adequate food, safe drinking water and the human right to a clean, healthy and sustainable environment of affected farmers communities and Indigenous Peoples,” the rapporteurs said.

These allegations have long been documented by independent watchdogs such as Friends of the Earth (FoE) U.S. and its Indonesian and Dutch counterparts, Walhi and Milieudefensie.

The company was most recently embroiled in a string of violence and criminalization in October 2024, which saw community members clash several times with antiriot police accompanying AAL subsidiary PT Agro Nusa Abadi (ANA) in harvesting palm oil fruit on lands claimed by the communities.

When community members protested against ANA’s actions, the antiriot police allegedly fired shots to suppress the protests. At the end of the month, the police charged six community members from North Morowali district with stealing palm oil fruit from ANA.

Uli Arta Siagian, Walhi’s forest and plantation campaign manager, described the situation as “dangerously deteriorating” due to the escalation of repression against villagers by the AAL subsidiary.

Action plan

These incidences occurred as AAL claimed it had made progress in redressing grievances by implementing a three-year action plan to address ongoing conflicts and community grievances in Sulawesi.

The reports from the ground tell a markedly different story, however, showing up AAL’s claim of progress as merely “an illusion,” according to FoE U.S.

The action plan itself has been criticized by the U.N. special rapporteurs and NGOs for not reflecting the demands for remedy and redress put forward by affected communities. They say it lacks key elements such as land restitution— a fundamental remedy in international human rights law— and fails to outline how AAL will consult communities under FPIC standards, the rapporteurs said.

FoE U.S. attributed the action plan’s inadequacy to the lack of involvement from affected community members in its drafting.

In a statement to Mongabay, Jardine Matheson said it has full confidence in AAL’s action plan.

Government defense

Only the Indonesian government had responded directly to the U.N. rapporteurs’ letter as of the time this story was published. AAL chose to publish its response on its website.

In its response published on the U.N. website, the Indonesian government largely defended AAL, saying the company’s operations comply with legal standards. Key to this argument is that most of AAL’s concessions have obtained a license known as the rights to cultivate, or HGU, which is the final permit in a series of permits needed before plantation activity can begin.

The government’s reasoning is that since an HGU can only technically be issued if there’s no conflict or if all disputes have been resolved, this indicates that AAL has no unresolved conflicts in its concessions.

However, FoE U.S. and Walhi note that at least three of AAL’s subsidiaries are operating without an HGU. These are ANA, PT Sawit Jaya Abadi (SJA), and PT Rimbunan Alam Sentosa (RAS). The fact that there are active disputes and that the companies continue to operate without an HGU suggests the “clean and clear” status of these concessions, as the government puts it, is questionable, indicating regulatory gaps in oversight.

The Indonesian government acknowledged that ANA has yet to obtain an HGU license, but said it’s actively in the process of acquiring it.

Operating without an HGU permit is generally considered a violation of multiple Indonesian laws, such as the 2014 Plantation Law, rendering ANA’s activities technically illegal. Indonesia’s land minister, Nusron Wahid, recently said palm oil plantations must have an HGU before they can operate.

From 2016 to 2024, the ministry has identified 537 palm oil companies operating on 2.5 million hectares (6.2 million acres) of land without an HGU. Nusron said he would impose fines on these companies. He also threatened to seize and redistribute their concessions If they failed to pay.

Yet despite the government’s rhetoric on the sanctity of the HGU, ANA allegedly continues to harvest palm fruit from disputed lands with police protection. The government’s letter didn’t explain this contradiction.

It’s also unclear why the government still hasn’t fined the three AAL subsidiaries despite its claim to act tough. The government should have made clear in its response to the U.N. rapporteurs that ANA’s activities are illegal, said Uli of Walhi.

“Even though ANA has tried to obtain an HGU, the government should have said that what ANA has been doing for decades is illegal,” she told Mongabay. “They should have said they would enforce the law on ANA [as Nusron threatened to do].”

Violence

In response to the allegations of the use of violence, the Indonesian government reiterated AAL’s commitment to human rights and sustainability, saying the company has no tolerance for any violation of land or human rights.

“We can assure that AAL and its subsidiaries have never been involved in any form of intimidation against the community or in destroying crops and agricultural equipment belonging to the community,” the response said.

Yet it offered no evidence to counter the rapporteurs’ specific allegations of intimidation, police brutality, and trumped-up charges against community leaders, Uli said.

FPIC

The government also said there are no issues with FPIC because AAL’s subsidiaries have engaged in consent-seeking activities akin to FPIC, starting with information dissemination efforts attended by village and regional government representatives as well as community members.

This included discussions and compensation for crops growing on the land before commissioning plantation development operations, all in accordance with the regulations in place at the time, the government added.

“Based on the above facts, it is incorrect to assert that AAL’s business activities are conducted without FPIC,” the government stated.

AAL also described the entire process as consultation.

However, FPIC requires that affected communities have the right to refuse a project, not just be consulted after decisions are made, Uli said. The consultation process itself was riddled with issues, she added.

“Many villagers said there’s no information dissemination from the very beginning,” Uli said. “Sometimes the process is also manipulative. A small number of people are used to represent all people [in the community].”

And the fact that conflicts began when communities started facing negative impacts, including displacement from their lands, is evidence enough that impacted communities hadn’t given their consent, FoE U.S. said.

The government also said that FPIC as a requirement was only adopted by the Roundtable on Sustainable Palm Oil (RSPO) in 2016. Uli said this indicates the government and AAL view the FPIC not as a universal instrument that should apply to all businesses, but only as an RSPO requirement.

“They’re trying to reduce the meaning of FPIC,” she said. “But how can a company as big as AAL not understand and not want to adhere to FPIC, an international instrument used by many businesses around the world? Instead, they adopt Indonesian standards that are subpar.”

Uli pointed out that AAL itself is applying for membership of the RSPO, making it more baffling why the company decided to not implement FPIC, resolve conflicts, and provide remedies to affected communities as required by the RSPO.

“AAL said FPIC is an instrument by the RSPO, an organization which it wants to be a member of. But at the same time, AAL highlighted that FPIC is a different instrument [than the one it’s implementing],” she said.

Government or spokesperson?

Instead of responding directly to the U.N., AAL chose to respond through the Indonesian government, with its response attached with the Ministry of Foreign Affair’s letter to the U.N rapporteurs.

By presenting AAL’s claims as fact without verification from affected communities, the government appears to be acting as the company’s spokesperson rather than an impartial regulator, Uli said.

“The government’s response letter is filled with AAL’s responses and statements only, without any attempt to verify them with affected communities and Walhi,” she said. “So there’s no balanced view at all in the letter.”

When there are allegations against a company raised by communities and NGOs, the government must seek out information and gather facts from both the communities and the company, Uli said.

“The press has to cover both sides, so how come the government didn’t do it?” she said.

AAL said it had tried to engage with Walhi in constructive discussions, and that it had made clear that “our door is unconditionally open to both FoE U.S. and Walhi to sit down and work to resolve things in a spirit of openness and co-operation.”

It said it had also offered to involve a mutually agreed-on third-party mediator and would be happy to facilitate on-the-ground fact-finding.

However, Walhi and FoE U.S. didn’t respond to these offers, AAL said.

Uli said Walhi has a policy of not meeting a company face to face without mediation from the government — not from a third party from the private sector or NGOs. She said this is because the state, as the permit issuer, holds the ultimate responsibility for resolving land disputes; a private mediator, meanwhile, lacks the authority to enforce meaningful remedies.

“If the government doesn’t act as a third party, then any discussion between Walhi and the company will be meaningless, and we will come to an agreement that doesn’t meet the demands of the affected communities,” Uli said.

The presence of the government is also crucial to remind officials that they have a duty to fulfill and protect the rights of their citizens, she added.

The government should also remember that it’s responsible for resolving problems that it helped create by issuing licenses to AAL even though there were already communities living in the area, Uli said. That’s why the government should establish a task force to remediate conflicts and deliver justice long overdue to communities, she said.

“The government shouldn’t shirk its responsibility. That’s what AAL or Jardine Matheson fail to understand — the fact that the state should be fully involved as a form of its responsibility and duty to fulfill its citizens’ rights,” Uli said.

Supply chain

AAL has received backlash from buyers due to the myriad allegations of environmental and human rights violations. At least 10 major consumer brands have suspended their sourcing of palm oil from AAL, with the latest to do so being U.S. food giant Kellogg’s. The cereal maker joined the likes of Hershey’s, PepsiCo and Oreo maker Mondelēz in distancing itself from AAL.

While a growing number of entities are cutting ties with AAL, major agribusiness traders like ADM, Bunge, Cargill and Olam still source palm oil from mills associated with implicated AAL subsidiaries. And at least 18 global consumer brands, including Unilever, Barry Callebaut and General Mills, have a recent history of sourcing palm oil from AAL.

Unilever said it has no direct sourcing with Astra Agro Lestari but may be exposed through its direct suppliers.

Since the allegations haven’t been resolved yet and there are allegations of escalating violence in the ongoing dispute, all businesses should cut ties with AAL and Jardine Matheson, said Gaurav Madan, senior forest and land rights campaigner at FoE U.S.

“Every month a new report emerges implicating AAL in violence, repression, or corruption,” he said. “Despite the repeated warning signs, companies such as Procter & Gamble, Unilever, and General Mills insist on maintaining AAL’s conflict palm oil in their supply chains. These companies tout their commitments to human rights, while the U.N. is raising the alarm about widespread abuses. Companies and investors should sever all ties with AAL and Jardine Matheson until conflicts are resolved and land taken without consent is returned.”

Banner image: Antiriot police allegedly provides protection for PT Agro Nusa Abadi (ANA), a subsidiary of PT Astra Agro Lestari (AAL), in North Morowali while it forcibly harvests palm oil fruit on lands claimed by communities. Communities report that the antiriot police fired shots to suppress community dissent. Image courtesy of WALHI. 

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