POSCO Daewoo, trade arm of the POSCO Group, is reportedly building palm oil farms by chopping down rainforests in Indonesia, generating controversy.
According to the Korean Federation for Environmental Movement on August 3, PT. Bio Inti Agrindo (BIA) being run by POSCO Daewoo in Indonesia was turning rainforests into palm oil farms to cultivate oil palms, a raw material for palm oil.
BIA's palm oil farms are 34,195 hectares, which account for 60% of the Seoul area. The project, which has been in progress since 2012, has destroyed 26,500 hectares of forests and plans to cut down 7,600 hectares of forests.
Moreover, as it was known that the rainforest being cleared for the construction of palm oil farms is the largest natural forest area remaining in Indonesia, which accounts for over 80% of Indonesia's biodiversity, fueling the controversy.
POSCO Daewoo is also suspected of using fire in the process of converting tropical forests into palm oil farms. In September of last year, a joint investigation by the international environmental group Mighty Earth and research and consulting firm Aidenvironment found that BIA systematically committed arsons for clear the forest to secure land for palm oil farms.
They disclosed satellite photos as evidence. At the same time, 158 fires were observed in September and October 2015 alone, they explained. The fire spots are concentrated in the area where BIA cut down trees in early 2015.
In March 2015, the Ethics Committee of the Government Pension Fund of Norway (GPFG), the world's largest sovereign wealth fund, published a report recommending the GPFG to suspend investment in POSCO Daewoo and its parent company, POSCO. The committee judged that BIA caused massive environmental destruction while converting natural tropical forests into palm oil farms in Indonesia.
"The global market is rejecting palm oil produced after destroying tropical forests and oppressing local residents," said an official of the Korea Federation of Environmental Movement. "Unless POSCO Daewoo complies with forest policies matching international standards, its products will be shunned by the world market,” the NGO warned.