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Poor supply chain coordination and limited government support have held back the global palm oil market from pursuing sustainability certifications, despite decades-old efforts to limit deforestation caused by the industry.
“People have been screaming and shouting for sustainable palm oil, but as soon as it was available, they found all kinds of excuses and disappeared out of that door,” said Carl Bek-Nielsen, chief executive director of United Plantations Bhd., the first big palm grower to be certified. Though roughly one-fifth of global palm oil is produced sustainably, he added, “people and many large consumer goods manufacturers, including retailers in Europe, are not willing to pay for it.”
Palm oil is a major agricultural product that is ubiquitous in consumer goods. Pick up any item in your local supermarket, writes Bloomberg, and there’s a 50% chance it has palm oil in it. But the industry’s rapid expansion has resulted in massive deforestation in countries like Indonesia and Malaysia. According to the International Council on Clean Transportation, the emissions from land use changes for palm oil in these countries nearly equals those of the aviation sector.
The Roundtable on Sustainable Palm Oil (RSPO) was established in 2004 to bring growers, traders, consumer goods makers, retailers, banks, and environmental groups together to try to find a way to make the industry sustainable and halt deforestation. But critics say the RSPO has not strictly enforced criteria to prevent land degradation and habitat destruction for endangered species like the orangutan. Plus the group has displayed a poor human rights track record in its treatment of plantation workers and local villagers.
Furthermore, about 40% of the world’s palm oil is produced by smallholders that “may not have the understanding or the money to meet the requirements to become certified,” says Bloomberg.
“We did not apply for any certification before because we didn’t know how to,” said Mohd Sahman Duriat at his 25-acre farm in Malaysia’s Selangor state. “In the old days, it was common to slash and burn. We didn’t know about the environment or pollution. We looked for the fastest and cheapest way.”
Malaysia is now starting to increase pressure on smallholders to apply for sustainable certifications. To be approved, farmers must attend government seminars where they learn to handle pesticides, and to chop trees into bits to decompose instead of burning them.
“The new way takes longer, but it’s safer,” said Duriat, who had never heard of the RSPO. “If we burn, we can get into trouble and people will get angry.”
But something needs to be done to minimize costs so smallholders don’t get charged for certification, Duriat said. Many producers continue burning, saying the price of certification is too high. And there is even less progress in countries where governments are taking no action, like Indonesia, where most of the land clearance for palm oil occurs.
Meanwhile, wealthy countries are moving to clean up their palm oil supply chains to appease consumers asking for greater traceability. Unilever, a major palm oil buyer behind Ben & Jerry’s ice cream, Hellmann’s mayonnaise, and Dove soap, aims to make all its supply chains deforestation-free by 2023, writes Bloomberg. But the RSPO estimates that about 81% of world palm oil production has yet to be certified.
“Without a coordinated and determined effort by governments, growers, food companies, and consumers in nations rich and poor, the monoculture of oil palms that replaced much of the rainforest in peninsular Malaysia will steadily eat into the world’s remaining tropical forests,” writes Bloomberg. “New plantations are rising on land that was once forests rich in biodiversity in Africa, South America, and New Guinea.”
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