The environmental Organisation Greepeace has published a new report on the implementation of ambitious goals to reform the palm oil industry. In 2013, Wilmar International, the world’s biggest palm oil trader, promised that within two years the company would only be trading palm oil from responsible producers that protected the environment and respected human rights. The report documents extensive deforestation and human rights abuses by 25 palm oil producer groups, all but one of which have supplied brands with palm oil in the last 12 months. The producers are known to have destroyed more than 130,000ha of forest and peatland since 2015 – 40% of this destruction with a total land area of 56,000ha took place in Indonesia’s easternmost province of Papua.
Download the report as PDF file
Executive Summary
In 2010, members of the Consumer Goods Forum pledged to clean up global commodity supply chains by 2020. Their efforts did not get off to an auspicious start, being too limited in ambition and poorly enforced. But in December 2013, there was a significant development: the world’s biggest palm oil trader, Wilmar International, made a commitment to ‘no deforestation, no peat, no exploitation’ (NDPE). Wilmar’s CEO Kuok Khoon Hong promised that within two years the company would only be trading palm oil from responsible producers that protected the environment and respected human rights.
This promise was a reaction to years of criticism of the palm oil industry’s environmental and human rights abuses, which had continued despite the establishment of the Roundtable on Sustainable Palm Oil (RSPO) a decade earlier. Other traders and their customers followed suit, and within a year most major traders of Indonesian palm oil – and the brands they supplied – had published NDPE policies of their own. The traders’ policies covered not only their own plantations, but those of the third-party producer groups from which most of their palm oil originates.
Since the end of 2014, all the conditions have been in place to make ‘no deforestation’ the new normal for the palm oil industry. The overwhelming majority of Indonesian and Malaysian palm oil now passes through companies that have committed to forest protection; recent analysis suggests that traders with NDPE policies operate 74% of the total refinery capacity in Indonesia and Malaysia. Yet deforestation for palm oil shows few signs of slowing down – because although brands and their suppliers have these policies, they have totally failed to implement them effectively.
The problems companies face when sourcing high-risk commodities like palm oil are well understood. The palm oil industry’s expansion into rainforests and peatlands has had a devastating effect on Indonesia’s people and wildlife, as well as our global climate. Yet years after announcing their NDPE policies, brands and traders are still falling at the first hurdle by failing to identify the producer groups in their supply chains and monitor them across their operations. In many cases, companies are sourcing palm oil from a producer’s mature plantations while the same business is destroying forests for new plantations elsewhere. Yet brands and traders do not have – and do not require their suppliers to provide – the concession maps that would show whether the producer groups that supply them are compliant with their NDPE policies or are still clearing forest. Without this information, they have no way to guarantee that they are not sourcing palm oil from rainforest destroyers.
Despite promising to clean up their supply chains by 2020, brands and their suppliers are still sourcing palm oil from producers that destroy rainforests. The second section of this report documents extensive deforestation and human rights abuses by 25 palm oil producer groups, all but one of which have supplied brands with palm oil in the last 12 months. Between them, those producers are known to have destroyed more than 130,000ha of forest and peatland since 20154, an area almost twice the size of Singapore – and that is almost certainly an underestimate of the full scale of devastation, because the total size of their collective landbank is unknown. 40% of this destruction – 56,000ha – took place in Indonesian Papua, the newest front in the palm oil industry’s war against the environment.
As the world’s largest palm oil trader – and the first to publish an NDPE policy – Wilmar International bears much of the blame for the ongoing destruction of Indonesia’s rainforests for palm oil. Greenpeace’s analysis indicates that not only does Wilmar trade palm oil from more destructive producers than most its competitors, but it is often their primary route to market. The Forest Trust (TFT) and other consultants that support companies in the implementation of their NDPE policies must also answer for their failure to hold clients to account.
It is now or never for the palm oil industry. As global temperatures rise and populations of endangered species dwindle, companies will come under increasing pressure to prove their supply chains are clean or ditch high risk commodities altogether. The future of the palm oil industry and other sectors depends on their adoption of a new model of trade based on radical transparency, independent verification and zero tolerance for deforestation and human rights abuses.
Wilmar must lead from the front. It must prove it no longer sources from forest destroyers, by requiring all producer groups in its supply chain to publish mill location data and concession maps for their entire operations and cutting off any that refuse. Wilmar must then completely transform its supply chain, so that by 2020 it is only trading with producers whose entire operations have been independently verified as compliant with all aspects of its NDPE policy – even if that means it must sell less palm oil.
Wilmar’s CEO, Kuok Khoon Hong, promised in 2013 to supply the market with deforestation-free palm oil. With 2020 less than 500 days away, the final countdown has begun.
