East Asia & the Pacific
Indonesia / Wilmar Group-03/Jambi
The Wilmar Group is a large agribusiness conglomerate specializing in the production and trade of palm oil, operating in Asia, eastern Europe, and Africa. Since 2003, IFC has undertaken four investments in the Wilmar Group, two of which are currently active. In November 2011, signatories from community groups, and local and international NGOs lodged a complaint with the CAO.
The complaint relates to unresolved land disputes between local communities and PT Asiatic Persada (PT AP), a majority-owned subsidiary of Wilmar that owns and operates palm oil plantations. The complainants allege that the company invoked government forces to dismantle a settlement on disputed land, which they say is contrary to previous agreements established between the community, government representatives, and the company. Further, they contend that the company’s actions are in contradiction to IFC’s Performance Standards. This is the third complaint received by the CAO relating to IFC's involvement with the Wilmar Group.
The CAO found the complaint eligible for further assessment and traveled to the field to meet with the relevant stakeholders in December 2011.
Six different community groups were identified during the assessment, and since then agreements to engage in a dispute resolution process have been reached among the parties, including defining a schedule for the process, as well as the role of the local government. Per mutual agreement of the parties, the dialogue is governed by a common set of ground rules, and is led by a Joint Mediation team, composed of CAO consultants and local government officials.
A first round of meetings produced some early steps around capacity building for the participants and joint land mapping. CAO's assessment report is available in English and Bahasa Indonesia under View Documents below.
In April 2013, Wilmar International sold its stake in PT AP after several dialogue meetings had taken place between PT AP and different community groups, and some interim agreements had been achieved. In late September 2013, PT AP, under new management, informed CAO of their decision to attempt to resolve issues through a government-led process. Therefore, CAO is now in the process of exiting from its engagement as convenors of a mediation process, and is in consultation with the parties about the best way to conclude CAO's involvement. In this context, CAO encourages the parties to honor and build on the agreements reached to date.
In keeping with CAO's operational guidelines, the case will then be transferred to CAO's compliance arm to appraise whether the case warrants a CAO investigation of IFC’s handling of its investment in question. A previous complaint to CAO has led to a full audit of IFC's investments in the Wilmar Group.
As of end-July 2013, Wilmar has fully pre-paid all of its outstanding loan obligations to IFC.
Updated: November 12, 2013
- Project Name & Number
- Wilmar Group 25532 & 26271
- Wilmar Trading Pte. Ltd.
- Agriculture and Forestry
- East Asia & the Pacific
- Environmental Category
- $33.3 million (Guarantee) & $17.5 million (Loan)
- Eligible: Completed
- Assessment Period: Completed
- Facilitating Settlement: In Process