1 SECTOR GUIDANCE: OIL PALM
The Sector Guidance provides financing guidelines for Banks in sectors/industry considered as having high sustainability risks. Sector/industry identification is carried out by taking into account environmental, social, governance, climate change, carbon emissions, biodiversity, and human rights aspects. The Sector Guidance is expected to be able to encourage the formation of a financing ecosystem towards a low-carbon economy, achieve the Sustainable Development Goals, and contribute positively to climate change mitigation and adaptation actions in line with Paris Agreement goal.
Oil Palm is one of the sectors that considered as having high sustainability risk by the Bank. Bank expects debtors in oil palm plantation to acquire sustainability certification (Indonesia Sustainable Palm Oil/ISPO) and encourages debtors to implement sector best sustainability practices. These sustainability practices include, but not limited to: adopt the principles of No-Deforestation, No-Peat, No-Exploitation (NDPE);
acquire Roundtable on Sustainable Palm Oil (RSPO); take a High Carbon Stock (HCS) and High Conservation Value (HCV) approach before clearing new land; avoid new plantings on peat areas and implement peatland management and water governance best practices; use the principle of Free, Prior and Informed Consent (FPIC) to ensure the involvement and protection of local communities; implement the principles of good corporate governance, including promoting transparency on sustainability governance;
as well as adopting good agricultural practices.
Furthermore, the Bank, in line with our sustainability commitments, will not provide financing to oil palm companies involved in activities such as illegal logging, uncontrolled fire, violations of human rights and labor laws and regulations.
