Palm oil
These days, we consumers are entitled to feel pretty pleased with ourselves. We’re now more aware of the impacts inherent in shopping than ever before. And thanks to the arrival of such products as organic fruit and veg, fair trade coffee, eco-friendly washing detergent, biodynamic wine and even vegan shoes, ethical choices are now available to us in virtually every sector, ensuring that as we traipse up and down the high street, our personal ecological and social footprints are minimised. Well, that’s the general idea, anyway.
But it has emerged that a large number of our everyday foods and other products are contributing to human rights abuses and perpetuating an environmental catastrophe that is not only causing pollution and accelerating global warming but could see the extinction of one of our closest relatives. Palm oil, valued because it is solid at room temperature, is present in everything from breakfast cereals to soap. The vast majority of the world’s palm oil comes from Malaysia and Indonesia, where the expansion of the industry has destroyed millions of hectares of rainforest.
Now, campaigners have called for consumers to make a stand. But this isn’t like coffee or chocolate. This issue won’t be resolved by boycotting palm oil, or by buying organic or fair trade products. More drastic measures are required, the success of which relies upon the support of major retailers and manufacturers. And although the clock is ticking, there is cause for optimism – if we can get this right, we’ll be well on our way to ensuring the sustainability of other forms of primary production.
Big business, big trouble
Virtually every one of us consumes palm oil in one form or another. In its basic form, it’s used in processed or prepared foods such as bread, cakes, breakfast cereals and ready meals, as well as ice cream, margarine and crisps (see box, page 53). Unlike rapeseed, soya or sunflower oils, palm oil is solid at room temperature, which means that it lends itself to certain applications, such as bakery fats. It’s also cheaper than rapeseed and sunflower oils. Its popularity has increased recently because it offers a replacement for hydrogenated vegetable oils, whose use is in decline following scares related to trans-fats and heart disease. Countless derivatives of palm oil are also used in non-food applications such as lipsticks, creams, shampoos and toothpastes (see box, page 53).
Today, palm oil is big business. During the past 15 years, annual global production has trebled, exceeding more than 33 million tonnes last year, when it was worth almost US$12billion. In 2004, it overtook soya as the world’s most popular vegetable oil. Imports to the EU increased by 90 per cent between 1992 and 2002, and by 2004, Europe was the world’s largest importer, accounting for 17 per cent of the global market. Within Europe, the UK is the second largest importer with almost 800,000 tonnes a year.
Most of the world’s palm oil is produced in Malaysia and Indonesia, which last year enjoyed 41 and 33 per cent shares of the global market respectively. However, the expansion of the industry in these countries is responsible for the destruction of some of the world’s most valuable rainforests. In particular, a recent report issued by the Ape Alliance and Friends of the Earth (FOE) has highlighted the palm oil industry’s impact on the orangutans of Sumatra and Borneo.
These two islands are home to more than 90 per cent of Indonesia’s and more than 40 per cent of Malaysia’s oil palm plantations. By 2004, sixty per cent of their plantations, covering an area of 40,000 square kilometres – the size of Switzerland – had been established by clearing lowland rainforest. This forest is home to the critically endangered Sumatran and Bornean orangutans. The report estimated that between 1992 and 2003, the palm oil industry destroyed at least 27,500 square kilometres of habitat, around four per cent of what remains today. (The actual figure may be much higher, as many unscrupulous owners have been clearing forest for the timber without developing the land. Some estimates put the total area of forest cleared in Indonesia in the name of palm oil at 180,000 square kilometres.)
Habitat loss isn’t the only problem associated with palm oil production. “Orangutans are attracted to the palm fruit in the plantations and become persecuted as pests, even though they are protected under national laws,” says Helen Buckland, author of the report and UK coordinator of the Sumatran Orangutan Society. “In fact, some plantations offer bounties to workers who bring their managers dead orangutans or evidence that they have killed one, such as a head or an arm.”
The impact of the large-scale clearance associated with palm oil doesn’t just affect orangutans, says Ian Redmond, chairman of the Ape Alliance. “These forests are home to Sumatran rhino, Sumatran and Bornean elephants, the Sumatran tiger, sun bears, gibbons and numerous other primates. By establishing a plantation, you’re exchanging a highly biodiverse ecosystem for what is essentially a monoculture – many thousands of species being reduced to a few dozen.”
The palm oil industry has also compromised the lives of the islands’ inhabitants, says Marcus Colchester, director of the Forest Peoples Programme. Effluent from processing mills pollutes rivers, which are central to life in Borneo, rendering the water undrinkable and poisoning fish. And disruption to hydrology can be so severe that streams and small rivers dry up altogether. The expansion of plantations has also led to human rights abuses. “During the 1970s, Dayaks in Kalimantan were persuaded to accede to the impositions of the central government without proper compensation or respect for their land rights,” says Colchester. Although the situation has improved in parts of Sumatra, he continues, in Kalimantan the Dayaks’ land rights are ignored, even though they are recognised under Indonesian law. “They are being offered minimal compensation for changing their way of life, but are still not being treated as landowners,” he explains.
Sooner or later, we will all be confronted with the environmental impact of palm oil. Deforestation is thought to contribute to 20 per cent of the atmospheric carbon dioxide released every year. The palm oil industry is making a significant contribution to this total by burning forest to clear land. The effect is worse when peat swamps are drained and subsequently catch fire because it releases thousands of years worth of sequestered carbon. This has happened on several occasions during the past decade. The huge fires in Kalimantan in 1997, which created a smoke haze all over Southeast Asia, released an estimated 1.7 billion tonnes of carbon, almost one third of the global emissions from the burning of fossil fuel in the same year.
According to Oil World, the independent forecasting service for oil seeds, oils and meals, palm oil production is set to rise by another 30 per cent by 2010, as the economies of India and China continue to grow and the demand for palm oil as a bio-fuel increases. To meet this demand, Malaysia and Indonesia plan to
increase production on Sumatra and Borneo.
According to some estimates, the area given over to palm oil in Indonesia alone may increase three-fold to 16.5 million hectares by 2020. Plantation companies already have concessions
in large areas of forest in Aceh in Sumatra and West and Central Kalimantan in Borneo. And the governments of both countries are considering establishing an 18,000 square kilometre palm oil ‘fence’ along the Malaysian–Indonesian border in Borneo, which would cut through critical orangutan habitat in both protected and unprotected forest and have serious implications for hydrology throughout the island.
However, expansion doesn’t have to mean destruction of rainforest, says FOE’s Ed Matthew. “There are millions of hectares of land that has been cleared for the timber and then abandoned. There’s no excuse for clearing forest. It’s only happening so that the plantation owners can make more money by selling off the timber first.”
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To boycott or not to boycott
So what can consumers do about it? The obvious answer would be to boycott palm oil and any companies involved in its production and trade. Unfortunately, it isn’t that simple. For a start, even though palm oil and its derivatives are all-pervasive, they are difficult to find in product ingredients lists. In most foods, palm oil is simply referred to as vegetable oil, while its derivatives have numerous names, the majority of which would be indecipherable to all but a biochemistry graduate (see box, page 53).
Geographical contacted the customer-service departments of 19 British manufacturers and retailers to ask about the environmental and social impacts of palm oil production, and about its use in everyday products. Very few could say how many of their products contained palm oil or whether or not it was clearly labelled as an ingredient.
However, even if this information were available, a boycott wouldn’t be the answer, says Buckland. “Palm oil is an important industry for Malaysia and Indonesia, employing millions of people.” Indeed, last year in Indonesia, palm products generated US$2.8billion, 1.3 per cent of GDP. More to the point, a boycott of palm oil in the UK would have little effect on producers in Malaysia and Indonesia, says Ian McIntosh, managing director of AarhusKarlshamn, the UK’s largest importer of palm oil. “If sales to the UK dried up, producers would simply turn to the growing markets in China and India,” he says, “so there would be no change in the environmental and social impacts.”
The more constructive solution, McIntosh says, is for the UK to turn to ‘sustainable’ palm oil. At present a small amount of sustainable palm oil – less than 8,000 tonnes a year – is produced to supply a niche market. However, the Roundtable on Sustainable Palm Oil (RSPO) aims to change that. An industry initiative comprising representatives of plantation owners and processors, as well as the retail, manufacturing, banking and NGO communities, the RSPO was established in 2003 to develop a sustainable and traceable supply of palm oil for mainstream consumption.
Last November, it agreed a set of criteria and principles to define best practice. Among these were stipulations that there should be no further forest clearance to establish palm oil plantations and no clearance of high-value ecosystems.
There should also be recognition of customary land rights and a process of free, prior and informed consent in the transfer of ownership. McIntosh, a member of the RSPO executive committee, is pleased with the progress so far. “The criteria and principles have been unilaterally accepted by all of the stakeholders. But there’s still a long way to go. We now have to implement them and deliver them to the market.” All being well, he says, we could see the first plantations certified during the first half of next year and the first certified palm oil on our shelves by early 2008.
However, the success of the RSPO will be affected by the strength of demand in the UK and other consumer countries, particularly from blue-chip companies. “The presence of a company such as Tesco will really make things happen,” says McIntosh. “If a plantation owner sees that the world’s third-largest supermarket is expecting certified palm oil by 2008, then it’s a signal that there is demand for the product.”
Palming people off
In February last year, FOE wrote to 96 British companies, including all of the major retailers and manufacturers, asking them to join the RSPO. Only 18 replied. In fact, as of January 2006, only nine companies with a high street presence in the UK had joined.
Geographical’s own enquiries reveal how little interest most of the major retailers and manufacturers that use palm oil in their products appear to be taking in the issue. Of the 19 surveyed, only five could give a satisfactory level of information – the Body Shop, Boots, Flora (Unilever), Cadbury’s and Proctor and Gamble – about how they used palm oil and how they were addressing the concerns. Only six showed any commitment to the RSPO. Those listed above and Asda had joined or were in the process of joining, and although Proctor and Gamble isn’t a member, it said it was working in partnership with its supplier, which was a member, to develop a sustainable source in Malaysia; its website gives clear information on its definition of ‘sustainable’.
You would have thought that companies making and selling organic products would have been aware of the issues and be taking a leading role. But Duchy Originals told me, incorrectly, that organic palm oil qualifies as sustainable, as did Green & Blacks. The organic supermarket Fresh and Wild assured me that press reports about palm oil were “misleading”.
Colgate–Palmolive and Walkers are taking so little interest that they couldn’t answer any of the questions and then failed to call back with further information. Morrisons took more than two weeks to reply. Incredibly, Asda couldn’t answer any of the questions, despite having submitted an application for membership of the RSPO.
The remaining supermarkets – Tesco, Waitrose, Sainsbury’s and M&S – offered little information about palm oil use in their products while making noises about supporting the RSPO. M&S’s statement was typical: “We realise that we have a moral obligation to have traceability on raw materials. We’re currently lobbying our suppliers to encourage them to join an industry initiative called the Roundtable on Sustainable Palm Oil.”
Nestlé took a similar position: its representative said that the company had attended several RSPO meetings as a non-member and it was just as important for manufacturers and retailers to be responsible for their own supply chains as it was for them to join the RSPO. Indeed, subsequent communications with the press offices of the supermarkets revealed that each took this view.
Matthew believes that the actions of the supermarkets and the other large high street retailers will have a direct influence on what happens in the forests of Indonesia and Malaysia. “If they don’t join the initiative, it’s going to slow down the rate at which it’s taken up by the plantation owners. And time is of the essence here.” Redmond agrees: “The forest is going so quickly that we are losing 1,000 orangutans from each species a year. At this rate, the Sumatran orangutan will be extinct within a decade.”
FOE and the Ape Alliance are asking consumers to put pressure on retailers and manufacturers. However, McIntosh has reservations about such a consumer campaign. “I have no doubt about the value of consumers putting pressure on Tesco and other companies, providing they understand what they’re asking them to do,” he says. “If they’re asking them to contribute to the development of sustainable palm oil, that’s great. But if they demand they use sustainable palm oil, then it isn’t going to help, because there isn’t any yet. Equally, if they ask them to stop using palm oil, it won’t have any effect on the forests and people of Southeast Asia.”
The British government also has a role to play, says Redmond. “Last year the UK signed the Kinshasa Declaration on Great Apes,” he says. “The wording is very clear: we have until 2010 to slow the rate of decline and until 2015 to ensure that priority populations are safe. How can we make a such a commitment, and then allow our corporations to be complicit in the destruction of orangutan habitat?”
FOE and the Ape Alliance are calling for this year’s revision of the Company Law Reform Bill to require directors to minimise the environmental and social impacts of their business. “Companies should be obliged by law to publish not only their statement of profits and loss at the end of every year, but a statement of their environmental impact and social responsibility,” says Redmond.
If there is enough demand, says McIntosh, the RSPO could change the way palm oil is produced in up to 40 per cent of plantations in Indonesia and more in Malaysia. “No other agriculture-based industry has ever achieved anything like this before,” he says. “The RSPO isn’t just trying to develop a sustainable supply of palm oil for a niche market, such as organic or fair trade products. We’re trying to change a global commodity, a mainstream industry.”
However, according to Colchester, there’s a limit to its influence. “The voluntary approach of best practice is a good thing if we can make it work,” he says. “But it has its limitations. It won’t address the problem of companies getting permits for clearing land for palm oil and then making off with the timber. For that we need stricter monitoring of land acquisition, and that’s a tall order.”
Nevertheless, Matthew believes that the success of the RSPO could have repercussions all over the world. “Palm oil offers an opportunity to challenge the commodity trading system and think about ways we can drive up sustainability standards,” he says. “If the RSPO can work out how to bring a sustainable product to the market, there is the potential to transfer these types of criteria and traceability systems to commodities such as soya, sugar, cocoa and coffee, where there are similar social and environmental concerns. We’re still a long way off, though.”
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