Wilmar International, the world’s biggest producer of palm oil, announced a new set of sustainability measures designed to eliminate some of the most environmentally-destructive practices involved in palm oil production. According to details on the new agreement published by Reuters, the Singapore-based food products supplier and its subsidiaries promised to avoid any additional destruction of rainforest land or peatland — an important source of carbon sequestration. The company also stated that they will better protect worker’s rights and communities where they operate.
Palm oil is used in a wide array of food and non-food consumer products, and is an especially common ingredient in processed, packaged food. Some experts estimate that one in two products on supermarket shelves contain palm oil. But even if you read the tiny label on that pack of potato chips, you might never know if it contains palm oil or not since manufacturers are often label palm oil as “vegetable oil.” About one-third of the world’s vegetable oil is made from processed palm oil according to GreenPalm, a sustainability certificate trading platform for palm oil and its derivatives.
Worldwide demand for palm oil has surged over the past few years as food manufacturers caught on to the many helpful properties of palm oil use in food manufacturing (shelf stability, provides texture and structure, cheap to produce). Over the past ten years worldwide production has doubled to reach over 50M tonnes per year, 90 percent of which is produced in the biologically-rich lands of Indonesia and Malaysia.
In a rush to meet rising global demand, palm farming has grown rapidly, especially across Southeast Asia. Palm oil production is a major factor driving massive deforestation and the destruction of carbon-rich peatlands — which has in turn been cited as a major contributor to climate change. Indonesia — the world’s largest producer of palm oil — currently has 8 million hectares of land under palm production, up from 4 million hectares in 2000, according to the country’s Ministry of Agriculture. Palm farming is only set to grow. Indonesia expects there will be 13 million hectares of palm oil plantations by 2020 to help meet growing biofuel demand.
Indonesia is the world’s third largest emitter of carbon, behind China and the United States. Deforestation and peatland loss are considered to be significant contributing factors to this status.
Besides the dramatic effects on climate change, unbridled palm farm growth is linked to the loss of habitat for endangered species such as the Sumatran tiger. In October of this year, Greenpeace issued an investigative report that indicted Wilmar and its subsidiaries in widespread clearance of Sumatran tiger habitats in Indonesia and of “laundering dirty palm oil onto global markets.”
Wilmar’s recent agreement to step up sustainable forestry practices is certainly a step in the right direction. But in an industry known for weak enforcement of regulatory standards and farming practices that degrade both the land and its communities, the proof is, well, in the palm oil. If a major player like Wilmar really steps up to these regulations and enforces traceability metrics with its subsidiaries, then the prospects for an industry-wide clean-up look very promising.
Accountability and local enforcement will be key to forcing palm oil producers and traders to change their ways and set new industry standards. But don’t expect this to necessarily come from existing industry sustainability groups like the Roundtable on Sustainable Palm Oil, an international group that has been widely criticized for failing to guide effective industry change.
Lauren is a freelance writer based in New Orleans. She has covered a wide array of geographies and topics, from economic and business developments in the Arabian Gulf, to arts and culture in Turkey, to social enterprise and the microfinance sector in Southeast Asia. She's also worked on the business side of things, with two years experience in strategy and marketing at a large renewable energy firm. Keep in touch: @laurenzanolli and email@example.com.