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Indian food giant to source deforestation-free palm oil

Rainforest destruction for palm oil production in Malaysia.
Rainforest destruction for palm oil production in Malaysia. Photo by Rhett A. Butler

Orkla, a Nordic conglomerate that owns MTR Foods, one of India’s major food companies, has established a zero deforestation policy for the palm oil it sources, reports Greenpeace.

Orkla’s policy commits it to full traceability and bars palm oil produced via forest and peatlands conversion by 2017. There are also provisions for workers rights and local communities.

“We are committing ourselves to breaking the link between our products and deforestation. We have an ambition to help protect the rainforest. Wherever possible, therefore, we will replace palm oil with alternatives that are better from a health and environmental perspective,” said Orkla Executive VP Håkon Mageli in a statement. “Where it is impossible to replace the palm oil, we aim to buy only palm oil that is sustainably produced. All palm oil used in Orkla products shall be fully traceable to plantation level and produced according to sustainable principles by 2017 at the latest. To achieve this objective, we will set stringent requirements for our suppliers and use relevant certification schemes.”

Orkla’s announcement is the latest in a wave of “zero deforestation” palm oil commitments from major consumer products companies. Last week Mars, Inc., the maker of M&M’s, Snickers, Twix, and a variety of other food products, made a similar pledge, following in the footsteps of Unilever, Nestle, Neste Oil, and Kellogg Company, among others.

Rainforest destruction for palm oil production in Malaysia.
Deforestation for palm oil production in Malaysia. Photo by Rhett A. Butler

Orkla’s move was immediately welcomed by Greenpeace, which helped shape the policy.

“This policy covers one of the biggest palm oil buyers in the Nordic countries and is the first to cover a major brand originating in India,” said Erika Bjureby, head of the forest campaign at Greenpeace Nordic. “People power is driving enormous change in the industry.”

Bjureby used the announcement as an opportunity to criticize Proctor & Gamble, the U.S.-based consumer products company that is currently the target of a Greenpeace campaign over its palm oil sourcing safeguards.

“This means there is now no place to hide for companies like Procter and Gamble, or local Indian brands like Godrej, which are failing to act on forest destruction,” she said.

The wave of commitments from consumer-facing companies go beyond standards set by the Roundtable on Sustainable Palm Oil (RSPO), the leading eco-certification body for the industry. While RSPO criteria include guidelines for reducing social and environmental harm, critics say it doesn’t prevent deforestation or conversion of peatlands. Therefore groups like Greenpeace are now pushing for stronger standards on both the supply and demand sides of the market.

So far a handful of major producers and traders have signed on to zero deforestation commitments, but concern remains as to whether there is sufficient demand to support the market. Therefore activists have recently stepped up pressure on buyers in an effort to align supply and demand for more sustainable palm oil. These campaigns have been mostly focused on brands that are prominent in the West, which represents only a small fraction of total palm oil demand. Most palm oil is consumed by India, China, Indonesia, Pakistan, and Bangladesh.

Accordingly, establishing standards in emerging markets is viewed as a key strategy to transforming the palm oil supply chain.

“Emerging markets such as India are the new frontier for responsible palm oil and the key to achieving responsible sourcing of the commodity,” added Areeba Hamid, forest campaigner at Greenpeace International. “Consumers here, just as anywhere else, must be guaranteed their products are free from deforestation.”

Rainforest destruction for palm oil production in Malaysia.
Deforestation for palm oil production in Malaysia. Photo by Rhett A. Butler

Today palm oil production is the biggest driver of deforestation in Southeast Asia. Conversion of peatlands and forests for plantations is also a major source of greenhouse gas emissions as well as a big threat to a number of charismatic animal species, including rhinos, orangutans, pygmy elephants and rhinos.

Nearly 90 percent of the world’s palm oil is produced in Indonesia and Malaysia.

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