Bribery and corruption

Bribery and corruption in the palm oil sector related to permits, licences, and land rights are linked to environmental degradation and land conflict in South East Asia. Weak law enforcement makes it difficult to ensure that permits and licences have been given in accordance with the law and that companies in the portfolio are not associated with corruption. Indonesia has taken steps to deal with corruption by limiting the size of palm oil concession areas held by a single company, and in 2018 Indonesia’s anti-corruption agency arrested palm oil executives from one of the country’s largest palm oil companies after they were caught attempting to bribe politicians to avoid an investigation into pollution from palm processing waste and pesticides. Financial institutions can help by requiring that the companies they finance either have a policy or state in their code of conduct that all forms of bribery and corruption are prohibited.