The Palm Oil Dilemma for Consumers

Before consumers buy products they are going to eat or drink, they are beginning to turn them around to check for the added sugars, genetically engineered ingredients, and high fructose corm syrup they want to avoid. The palm oil they find listed in snack foods, as well as in ice cream and other products, also is an ingredient in detergents and beauty products. Africans cook with palm oil, and a woman from Nigeria told me it could control high blood pressure. This widespread use results in a constant pressure to expand palm oil plantations and the following unintended consequences.

• Deforestation of rain forests means fewer carbon emissions can be absorbed to limit climate change.
• Deforestation destroys the tropical forest habitats of endangered species, such as orangutans, rhinos, tigers, and elephants in Sumatra, Indonesia. Plus, roads built into forests enable illegal logging and exporters to reach the rare birds that become part of the underground trade in exotic creatures. 
• Deforestation in parts of Indonesia helped cause floods, according to the World Bank.
• Fires used to clear Indonesian oil palm plantations in 2015 caused the smoke that resulted in respiratory problems in Indonesia, Malaysia, and Singapore.
• Although corporations make commitments not to use palm oil from suppliers accused of illegal deforestation and from uncertified mills, they often only honor these commitments when an NGO or other groups uncovers a violation or local law enforcement acts.
• Labor is exploited; living and working conditions on plantations are bad. Migrant laborers from Bangladesh, for example, who work on the palm oil plantations in Malaysia often owe third party company recruiters debts they cannot pay. They find they are like prisoners working seven days a week after being forced to surrender their passports.
• Needed food production decreases when farmers switch to growing oil palm. Their debts rise as they purchase seed and fertilizer from the palm oil companies they supply.
• Expansion of palm oil plantations which encroach on village farm land and grazing pastures leads to conflict. 

Ravenous demand for palm oil from Indonesia and Malaysia, the countries that produce 80% of the world's supply, has not gone unnoticed in Brazil, where research shows almost half of the country's land area is suitable for growing oil palm. At the moment, most of Brazil's palm oil comes from the Amazon state of Para, where plantations employ about 20,000. As in Indonesia and Malaysia, an increase in palm oil production raises fears of illegal deforestation and endangering the biodiverse ecosystem. Rising land prices already have led to land ownership conflicts and even murder.

Relying on Indonesia's environmental laws, eco-warriors now identify illegal palm oil plantations on protected National Park land listed as a UNESCO World Heritage Site. Spotters tell owners of illegal plantations to return the land to authorities or face prosecution. They then cut down each oil palm. In about five years, replanted seedlings begin to help forests recover unless sun burns out young plants or elephants trample them. Altogether, it can take 20 to 200 years for forests to reach their original growth.

Other palm oil players also are determined to combat the effect of deforestation on climate change and to protect endangered animals, birds, and plants. Besides groups, such as the Roundtable on Sustainable Palm Oil (RSPO) that uses an oil palm symbol to identify "Certified Sustainable Palm Oil," the Environmental Investigation Agency (EIA), Greenpeace, the Rainforest Action Network, and Friends of the Earth, banks that finance palm oil plantation owners and investors in palm oil companies have begun to show greater concern about backing firms engaged in deforestation. When the Noble Group, owner of palm oil's Noble Plantations, prepared to issue a bond to finance clearing pristine rain forest in Papua, Indonesia, the HSBC bank involved in the bond issue asked RSPO to investigate charges that development on Noble's concession was about to violate RSPO standards. As a result, Noble's spokesperson announced work on Papua's plantations was on hold while sustainable analysis was pending. Other banks also have begun to require independent verification that palm oil borrowers comply with no deforestation, no peat, and no exploitation policies.

In the United States, the Ceres sustainability organization issued an "Engage the Chain" report to alert investors to the environmental and social threats posed by companies that rely on palm oil and other commodity suppliers.

Negatives associated with palm oil create a search for alternatives. But when the Ecover cleaning company produced a new laundry liquid using oil from genetically modified algae, customers refused to buy it. In the UAE, experiments show a species of alga that grows in fresh and salt water naturally produces the fatty palmitic acid found in palm oil. The University of Bath is experimenting with a yeast that has properties similar to palm oil that can grow in municipal, supermarket, or agricultural waste rather than on land. To date, however, substitutes, including rapeseed and coconut oil, cannot compete with less expensive palm oil that sells from $500 to $1,200 a ton, unless customers begin to recognize the non-price benefits of avoiding palm oil.

When consumers turn around a product and spot palm oil as an ingredient, what might they do?

(Also see the earlier post, "Long Supply Lines Foster Abuses").

Long Supply Lines Foster Abuses

Regarding abuses related to the $88 billion palm oil industry, Rachel Barre, who is L'Oreal's sustainable sourcing manager, acknowledged her company is far removed from the plantation level. And one palm oil industry observer noted it is impossible to delink one company's supplies from the continued deforestation of the industry as a whole.

     Since, along with plantations, small farmers produce 40% of the world's palm oil, abuses at the source of this raw material are widespread. Polluting smoke from the fires used to clear palm oil plantations in Indonesia and Malaysia spreads far beyond local areas and deforestation robs the world of endangered wildlife.

     In lengthy supply lines, problems associated with land acquisition, working conditions, pay, pollution, and deforestation are found where plantations, logging, mines, and textile factories source the food and goods sold to consumers thousands of miles away. Indonesia represents a good example. President Joko Widodo presides over a country of 13,000 islands. He is winning public support for a construction boom in needed roads, railways, bridges, airports, and power plants that the previous government of Suharto failed to address. Yet, projects are hindered by laws and regulatory agencies associated with each project, skilled labor shortages, land acquisition in heavily populated areas, lack of private investment necessitating growing public debt, and lax worker safety requirements.

     Pressured by distant retailers to cut costs and speed up delivery, the clothing manufacturers in China, India, and Indonesia that work with viscose/rayon fibers become major polluters. On one hand, the silk alternative is heralded as a sustainable option, because it is made from the fast-growing, soft wood of beech, pine, and eucalyptus trees. But the process of turning wood pulp into viscose requires sodium hydroxide, sulfuric acid, and carbon disulphide, a chemical linked to heart disease, birth defects, mental health problems, and cancer. Air and wastewater exposed to these chemicals harm factory workers, local residents, and fish.

     What can be done?

1. Organizations, such as the Roundtable on Sustainable Palm Oil, Palm Oil Innovation Group, Forest Stewardship Council, Proforest, Fair Trade Federation, and Sustainable Apparel Coalition, assemble experts to monitor industry conditions, devise best practices, and develop certification programs. Some organizations create logos consumers can use to identify responsible producers.

2. When governments are approached to grant large scale land concessions, they are in a position to require plantation owners to obtain (without manipulation by offering jobs before the concession is granted) consent from local communities, to assure protection of traditional rights to land that is owned, occupied, or used to produce food needed by the local population, and to agree to penalties for violating stipulated working conditions and environmental protections.
     Olam International's palm oil operation in Gabon offers some insight. The company holds a government lease on land for 15 years. Although those who wanted to farm outside the concession could continue to do so, 95% of the local population took jobs with Olam. The company invests $1.6 million a month in community healthcare and development. Yet it took pressure from environmental groups to cause Olam to announce even a one year moratorium on deforestation.

3. Before they suffer bad publicity, companies at the end of supply chains need to realize consumers are becoming better informed about the dangers associated with certain products and industry practices. The need to end pressure on suppliers who cut corners to meet demands and to designate someone to root out untrustworthy intermediaries suppliers may hire to avoid responsibilities is likely to grow. Touting a palm-oil free product became a contested, competitive selling claim in a Belgian court. The supermarket chain, Delhaize, advertised its Choco spread was better for the planet and health than Ferrero's Nutella, a spread that contains palm oil, Although Ferrero successfully argued against Delhaize's claim, the case showed how some marketers have begun to recognize consumers are growing wiser about everything involved with the food they eat and the products they use.

4. With technical, financial, and other support from governments, private sources, and non-profit organizations, more small scale entrepreneurs need opportunities to enter supply chains.

5. To ensure their survival, critically endangered and endangered wildlife, such as gorillas, chimpanzees, bonobos/pygmy chimpanzees, saolas, and orangutan, often need the protection of "no-go zones" and wildlife corridors in concession territories. Palm oil plantations in Cameroon and the Republic of the Congo, for example, already have destroyed chimpanzee and gorilla habitats. Company and government wardens and scientists need to prevent poaching and to monitor animal health in land concessions.

Of course, abuses can be avoided by shortening or controlling supply lines. The missionary nuns who  grow and sell tomatoes to their local communities in Africa short circuit the supply chain (See the  earlier post, "Celebrate Uplifting Efforts to Promote Self Reliance in Africa."). The nonprofit organization, serrv (serrv.org), finds artisans and farmers in areas of great poverty in countries such as Ghana and South Africa, helps them with marketing suggestions to make their goods more attractive in developed countries, and sells these products through catalogs and the retail stores they own.