Deforestation for an oil palm plantation in Sabah, Malaysian Borneo. Photos by Rhett A. Butler.
Wilmar, the world’s largest palm oil trader and a long-time target of environmentalists, has signed a landmark policy that commits the company to eliminate deforestation from its supply chain. The deal, if fully implemented, has the potential to transform the palm oil industry, which has emerged over the past decade as one of the world’s most important drivers of tropical forest destruction.
Wilmar’s policy, posted on its web site today, comes after months of discussions between The Forest Trust (TFT), an NGO that helps companies clean up their supply chains; Unilever, the world’s largest corporate consumer of palm oil; and Climate Advisers, a consultancy focused on climate change. The policy also follows years of campaigns by activists and human rights groups that have targeted Wilmar for both the damage caused by the plantations it owns as well as the palm oil it buys from third party suppliers.
The new policy addresses both of those areas of concern, committing the company to a policy that applies to “all Wilmar operations worldwide, including those of its subsidiaries, any refinery, mill or plantation that we own, manage, or invest in, regardless of stake” as well as “all third-party suppliers from whom we purchase or with whom we have a trading relationship,” according to the company. It also applies to Wilmar’s non-palm oil holdings and trading, including sugar and soy.
Deforestation for palm oil production in Borneo
The policy has three major areas: deforestation, conversion of peatlands, and human rights. It takes effect immediately for Wilmar, while its suppliers face a December 31, 2015 deadline for compliance.
Rainforests and deforestation
Wilmar says it will not buy or trade palm oil that is produced at the expense of high carbon stock (HCS) forests or high conservation value (HCV) areas. This would effectively rule out conversion of old-growth forests, most secondary forests, and areas that are habitat for endangered species like orangutans, tigers, rhinos, and elephants. Wilmar also commits to a no burn policy just six months after fires linked to the plantation sector blanketed Singapore and Malaysia in a choking haze.
An excavator creates a canal in Riau Province, Indonesia, despite the heavy smoke caused by the forest fires. © Ulet Ifansasti / Greenpeace
In a step-up from other agreements signed by palm oil industry players in recent months, Wilmar will also take steps to “progressively reduce” greenhouse gas emissions on existing plantations. These include treating palm oil waste and managing already-cultivated peatlands.
For new plantations, Wilmar pledges to avoid sourcing palm oil produced on peatlands “regardless of depth.” This stipulation goes beyond the industry standard of avoiding development of peat soils deeper than a specified depth (up to three meters in Indonesia). Because conversion of peatlands for plantations is a major source of carbon emissions — nearly 120 million tons of CO2 emissions per year in Indonesia and Malaysia alone — the stipulation could have significant climate benefits.