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Leon Kaye headshot

Palm Oil’s Impact on People and the Planet Is Getting Worse, Say NGOs

By Leon Kaye

The Roundtable on Responsible Palm Oil (RSPO), despite its success in convincing palm oil suppliers and buyers to commit to a more responsible supply chain, still has much work to do if this sector will truly become one that respects human rights and sustainable development. After NGO investigations suggested that reforms in the industry were not going far enough, the RSPO suspended dozens of companies from the organization last year for alleged non-compliance.

But many suppliers were still not getting the message, spooking some of the world’s largest palm oil buyers to ditch the companies from which they were sourcing palm oil. The biggest offender, according to NGOs such as Aidenvironment, is the IOI Group, a founding member of the RSPO. The RSPO suspended IOI from the organization, which resulted in the Malaysian palm oil producer and supplier filing a lawsuit. That litigation sparked an outcry that eventually led to IOI announcing this week that it would drop the litigation.

But despite IOI insisting that it will follow stricter RSPO guidelines, evidence suggests IOI is still skirting both RSPO’s guidelines and Indonesian law. According to the NGO Greenpeace, field investigations revealed that canals have been dug throughout peatlands on the island of Borneo, which environmental groups say are vital carbon sinks and susceptible to fires when drained.

Greenpeace is urging Cargill, the last major company still conducting business with IOI, to follow the lead of companies such as Unilever and Kellogg and find a new palm oil supplier. Other environmental advocacy groups have long joined Greenpeace to amplify their demands that the global palm oil industry, and consumers, take action so that more companies will follow their words with deeds.

For example, Rainforest Action Network (RAN) recently issued a blistering report accusing a joint venture of PepsiCo in Indonesia of doing nothing to stop environmental degradation and human rights abuses in that country. Like many global food companies, the global food giant has disclosed a plan to source only sustainable palm oil within its supply chain — 100 percent, in fact, by the end of this year. But RAN accused PepsiCo of leaving a loophole when it comes to its business partners, allowing its supplier Indofood to carry on business as usual.

And Indofood’s business, according to RAN, was built on the backs of laborers who often work without a contract or access to health care while earning wages significantly lower than permanent employees on palm oil plantations -- and often below the legal minimum wage.

RAN also accused Indofood of nickel-and-diming employees, often in the form of cash penalties for infractions such as the improper cutting of stems or picking unripe fruit. Such penalties drive down wages the point where these workers often earn less than $120 a month. Often assigned aggressive quotas, many workers bring their wives or children to help them gather oil palm fruit, and frequently doing so without access to the proper safety equipment to get the job done. Other alleged abuses include health risks from the overuse of pesticides and fertilizers and intimidation tactics that prevent workers from joining labor unions other than those endorsed by Indofood.

While RAN is loudly calling for companies, starting with PepsiCo, to partner with the RSPO in solving those labor problems, a coalition of NGOs and businesses released an online mapping tool that they say can help companies gauge whether their palm oil suppliers are contributing to deforestation.

Global Forest Watch’s PALM Risk Tool is the result of an evaluation of hundreds of palm oil mills. According to the World Resources Institute (WRI), which led this project, the tool analyzes satellite imagery and other data within 31 miles (50 kilometers) to assess threats palm oil production has on local forests. Such mapping promises companies the ability to catch deforestation risks before they even happen — eliminating the typical response of companies that it is nearly impossible for them to pinpoint the exact location from which their palm oil is originally sourced.

With hundreds of companies promising to use only “conflict-free” or responsibly sourced palm within their supply chains by 2020, time is running out to make good on such commitments in order to placate their stakeholders.

The sticks wielded by Greenpeace and RAN, along with the carrots offered by WRI and RSPO, show that environmental groups will only amplify what they see are the risks that the world’s demand for palm oil imposes on communities and the global environment. The time to make these corrections was yesterday, but companies have more resources at hand to show that they can change their sourcing policies and minimize the impact their business practices have many time zones away.

Image credit: Peter Nijenhuis/Flickr

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

Read more stories by Leon Kaye