April 30, 2018

Palm oil industry’s ability to halt deforestation in question

( - Questions from the international community about the level achieved by existing efforts to clean up global palm oil supply chains from deforestation and peat destruction look sure to intensify.

In line with this, the ability of the palm oil industry to end deforestation in its global supply chains is currently also getting greater scrutiny from global buyers and consumers, a trend likely to continue into the future. 

These issues were echoed by Franky O. Widjaja, Chairman and CEO of Golden Agri-Resources (Sinar Mas Agribusiness and Food), who raised one of his primary concerns about whether the palm oil sector is truly capable of halting deforestation. This matter, he said, is being questioned to an increasing extent by the global public.

"The global community is increasingly questioning the palm oil sector about its ability to halt deforestation," Widjaja asserted while expressing his related concerns about the sector's ability 'to deliver positive livelihoods and contribute to feeding a growing world population in a sustainable manner.'

These concerns were conveyed by Widjaja in a speech (Apr 25) at the International Conference on Palm Oil and the Environment (ICOPE) held in Nusa Dua, Bali.

It was very relevant of the GAR CEO to bring up the question concerning the ability of the palm oil sector to stop deforestation in its global supply chains, given that doing this is no easy task for the industry as a whole.

For example, a recently-presented spatial analysis from Greenomics Indonesia (Apr 24) demonstrated that PT PSM, a company legally associated with the PT BHD palm oil mill, is a devastating supplier to members of The Forest Trust (TFT).

These members are Apical/Asian Agri, ADM Global, Cargill, Nestle and Wilmar, all of whose supply chains are still linked to the clearing of the critically-endangered Bornean orangutan's habitat for the purpose of palm oil expansion, as seen in the following and LandViewer images.

This palm oil concession, the majority of which is composed of high carbon stock (HCS) forests, was formerly owned by Genting Plantations which previously declared that it would not clear these forests. This promise was made public by Wilmar in a progress update on its grievance list.

Genting, however, proved unable to keep this promise, instead conveniently selling the concession to its palm oil business partner which subsequently started to bulldoze away the orangutan-inhabited forests to make way for new palm oil plantations. These activities are still underway.

The linkage of the aforementioned five major palm oil players which are members of TFT to the deforestation of the Bornean orangutan's habitat is a glaring example of the palm oil industry’s inability to halt deforestation in its existing global supply chains. 

TFT’s reaction

With regard to its recent news report (Apr 20) titled “TFT challenged to clean up its members’ supply chains”, TFT responded via email to (Apr 25).

“Firstly, we agree with some of the points raised in your article (the news report). But we also know that business transformation among our members is indeed happening. It’s not fast enough, it’s not expansive enough, but it is there to see, and it is growing,” TFT wrote.

The organization added, “We agree that, at present, there isn’t sufficient impact data on the work we do with our palm oil members. But measuring impact is something we are very mindful of, and we have been working to develop approaches and tools to do this.”

TFT Director Boris Saraber emphasized, among other things, that, “We will also be supporting our members to better show the impacts of their commitments and what remains to be done to bring about a responsible industry.”

The following photos, which were shared with by AidEnvironment Asia earlier this year, depict the rate at which the forest habitat of the Bornean orangutan is being destroyed by a company (PT PSM) linked to the five major palm oil buyers and suppliers mentioned above - all of which are members of TFT.

These photos were taken in November last year but this damaging practice continues until today.

Despite this damning evidence of its members’ complicity in forest destruction, TFT insists that, “Supply chain transparency is another vital aspect of our work, and we constantly push our members to share their progress.”

There is certainly no denying the good progress that has been made by TFT in its efforts to enhance supply chain transparency. Admittedly, such improvements are unprecedented and highly appreciated, as epitomized by the organization’s recent announcement of the list of palm oil mills from which Nestlé sources.

Nevertheless, TFT needs to accelerate and step up its efforts so that, at the very least, these five leading members immediately end their association with the ongoing obliteration of the home of the Bornean orangutan in the former Genting plantation palm oil concession.

TFT was also keen to point out to that it is utilizing high-level technology to monitor the palm oil supply bases used by some of its members. This, of course, is expected of an organization with TFT’s responsibilities.

These protestations notwithstanding, there is no doubt that TFT is fully aware that the supply chains of five of its key five members remain linked to the rapidly vanishing habitat of the Bornean orangutan, something which must be stopped without delay. 

If global palm oil supply chains do not cut their ties with harmful deforestation practices in the very near future, the major concern expressed by Widjaja in his recent speech, the world community will continue to question the palm oil industry’s ability and/or willingness to do so.