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Piloting PALM Risk to detect palm oil-driven deforestation

  • The PALM Risk Tool, hosted on World Resources Institute (WRI)’s Global Forest Watch (GFW) Commodities platform, uses satellite imagery to show deforestation risk around 800 palm oil mills.
  • Corporations can use the tool to increase transparency, improve plantation practices, honor sustainable palm oil commitments and preserve endangered species’ habitat; government and civil society can use it to hold companies accountable to stopping rampant deforestation for palm oil.
  • Piloting the technology, Unilever found 29 high-risk mills in its supply chain, and it will work with unsustainable suppliers to improve their operations and curb forest loss.

What do lipstick, detergent and instant noodles have in common? They all contain palm oil.

Half of every packaged product stocking supermarket shelves can be traced back to a ruthless army of oil palm trees rapidly occupying land that naturally supported rich tropical forests. Palm oil production razes and replaces biologically diverse ecosystems with monospecific palm “deserts,” endangering wildlife originally inhabiting these areas – including orangutans, tigers, elephants and rhinos. In Indonesia and Malaysia, which generate over four-fifths of the world’s palm oil, oil palms uniformly dot many vast formerly forested regions.

Mature palm oil plantation at Cargill’s PT Harapan Sawit Lestari, Borneo, Indonesia. Photo credit: David Gilbert/RAN.

To help identify and mitigate the deforestation risks of specific palm oil mills, consumer goods giant Unilever recently piloted the World Resources Institute (WRI)’s new Prioritizing Areas, Landscapes and Mills (PALM) Risk Tool.

“The PALM Risk Tool will facilitate increased transparency, help us identify high risk mills and support us as we work to drive the transformational change needed in the palm oil industry,” said Unilever’s Chief Procurement Officer Dhaval Buch.

Testing it, Unilever found that 29 of the mills it sources from, although comprising a fraction of its supply chain, pose high deforestation risk. For instance, take the Intan Sejati Andalan mill in Riau, Indonesia, where 200,000 hectares of surrounding primary forest has disappeared since 2009; analysts predict the remaining 300,000 are likely to be cleared too.

Deforestation for palm oil in Riau, Sumatra, Indonesia. Photo credit: Hayden.

A Tool for Transparency

Any one corporation may purchase palm oil from hundreds of processing mills, which source from thousands of farms. More than 300 companies have committed to selling deforestation-free palm oil by 2020, but they lack the information and resources to easily examine complex supply chains and achieve this target. This year, Unilever renewed its Sustainable Palm Oil Sourcing Policy and strengthened its supply chain traceability implementation commitments, even fast-forwarding its objective of using only physically certified oil to 2019. According to the company, this is oil that comes from a supply chain that 1) is “segregated,” meaning it mixes certified sustainable palm oil (CSPO) from different plantations, but keeps CSPO separate from the uncertified counterpart, 2) achieves “mass balance,” which combines certified and uncertified oil in a regulated manner and/or 3) meets another equivalent standard independently verified by a third party.

“Due to the complexity of the palm oil supply chain, one of our biggest challenges is to gain greater visibility of all the steps in the supply chain and trace back our palm oil to the source,” explained Buch. “We work with more than 150 suppliers; the majority are processors and convertors at destination markets.”

Palm oil mill in Sepang, Malaysia. Photo credit: Marufish.

An open-source software, PALM Risk determines deforestation risk for almost 800 palm oil mills (and counting) based on deforestation satellite data using WRI’s Global Forest Watch (GFW) Commodities production monitoring platform. The new tool examines historic and future environmental impact indicators such as number of fires and hectares of tree cover loss over time in ecologically significant landscapes, including primary forest and carbon-rich peatland, within 50 km of each mill. This is roughly the distance fresh palm fruit can travel before spoiling in 24 hours. Combining all of this data, the software assigns a risk ranking or priority level per mill, informing users about the possible environmental repercussions of plantations surrounding and supplying the mill. Producers can further investigate mills that the program labels “high-risk,” perform field audits and work with plantations feeding mills of verified concern to meet sustainability goals and ameliorate their deforestation impact.

“Companies that have several hundred mills in their supply chain can run this tool on all of those mills and come up with their x percent of high risk mills,” said Caroline Winchester, WRI’s Global Forest Watch Commodities Research Assistant. “It’s a tool that helps companies prioritize where they’re going to engage in their supply chains first to address deforestation.”

Oil palm saplings pushing out of the ground on cleared land in PT Indo Sawit Kekal, Indonesia. Photo credit: David Gilbert/RAN.

PALM Risk in Unilever’s Hands

“Unilever is working with WRI and Daemeter on a more detailed analysis of the identified mills – this work includes research of forest cover, peat lands and fires,” said Buch. “If we find any supplier to be in breach of our Policy, we engage with them to work on an action plan to resolve the issues and help them address any weaknesses in their policy or practices.”

Unilever ensures its palm oil actually meets sustainability standards by requiring suppliers and their third parties to verify their oil abides by the corporation’s Policy. Following the Roundtable on Sustainable Palm Oil (RSPO) Principles & Criteria and New Planting Procedure counts as verification, except for Unilever’s more stringent regulations surrounding HCS (High Carbon Stock) and peat.

Oil palm plantation in Indonesia. Photo credit: Ryan Woo/CIFOR.

“We are committed to working with others to eliminate deforestation from the world’s commodity supply chains. To do this, we need to ensure our own purchases are fully traceable and certified sustainable and encourage whole industries to set and meet high standards,” added Buch. “In the case of palm oil specifically, it is important that we work closely with our suppliers and expert partners to make sure we have robust traceability and risk verification systems on the ground.”

He noted that Unilever is supporting PALM Risk’s further development, especially in critical initiatives such as mapping national parks.

Consumers, governments and advocacy groups can also harness the platform to verify companies’ palm oil sourcing and hold them accountable to environmental standards.

Developing the Tool

Prompted by requests from producers seeking to implement their commitments against deforestation, WRI teamed with Proforest and Daemeter, two other environmental groups, to develop PALM Risk over the past year and a half. They worked iteratively with multiple businesses to ensure the tool’s feasibility and utility before releasing it on the GFW website.

According to Sarah Lake, Corporate Engagement Research Analyst for GFW, PALM Risk is the most comprehensive public database of mill sites right now. Users can also pinpoint and perform custom analyses on mills that the program doesn’t already include.

Global distribution of palm oil output in 2013 as a percentage of that of the top producer (28.4 million tonnes, Indonesia). Photo credit: Swidran.

Winchester noted, however, that the tool has one major caveat.

“Just because a mill comes back as high-risk, doesn’t mean the mill is engaging in deforestation activities,” she said. “When we don’t know where the farms are on the ground, we can’t differentiate if it’s this mill or its neighbor next door that is sourcing from areas experiencing deforestation.”

This means users have to achieve a greater degree of transparency on their own by collecting farm-level data to ascertain whether a mill is causing deforestation.

All the same, WRI envisions PALM Risk becoming more robust as data continues to improve and gain resolution and the developers, in turn, update the data sources used. The organization hopes more companies utilize the tool to implement their commitments to zero deforestation.

Going Deforestation-Free

But what exactly is deforestation-free palm oil, when diverse native vegetation must be removed to plant mono swaths of oil palm in a process responsible for over 50% of land conversion and up to 15% of carbon emissions globally?

Cleared landscape in West Kalimantan, Borneo, Indonesia. Rainforest destruction making way for palm oil severely threatens Borneo’s forest people, biodiversity and the climate. Photo credit: David Gilbert/RAN.

“We take the principle of no deforestation very seriously. By sourcing sustainably, we aim to reduce the impact of palm oil cultivation on forests,” Buch explained. “As outlined in our Sustainable Palm Oil Sourcing Policy, no deforestation means no conversion of High Conservation Value (HCV) areas, no conversion of High Carbon Stock (HCS) forests, no burning in the preparation of new plantings and re-plantings and a progressive reduction in greenhouse gas emissions associated with existing plantations.”

As Unilever sees it, sustainably produced palm oil actually has a smaller environmental impact than other vegetable oils. With an average yield of 4.0 tons per hectare per year, it comprises 39% of global vegetable oil production while utilizing just 7% of farmland. It’s six times as land-use efficient as rapeseed oil, 8 times more so than sunflower oil and 10 times more so than soybean oil.

“While palm oil is quite a sustainable oil, as any large-scale agriculture goes, it can have negative effects on the environment and lead to large areas of deforestation,” argued Winchester.

Aerial view of peatland deforestation for a palm oil plantation in Central Kalimantan, Borneo, Indonesia. Photo credit: Glenn Hurowtiz.

Last April, the RSPO overturned the sustainable certification of IOI, a major palm oil supplier, because of deforestation and labor rights violation charges. Unilever and other firms boycotted the organization, demonstrating their commitment’s sincerity. By providing much needed transparency regarding sourcing mills, the PALM Risk Tool could empower companies, consumers, authorities and NGOs to navigate the challenges of monitoring and regulating enormous supply chain complexes in the move toward deforestation-free palm oil.

“This is a great example of how data and transparency can drive impact,” said Crystal Davis, Director of Global Forest Watch. “It won’t happen overnight, but this tool can point companies in the right direction.”

Palm oil plantation encroaching upon forest in Kalimantan on the Indonesian island of Borneo. Photo credit: Glenn Hurowitz.

For more on PALM Risk, see this article covering its release.