For the palm oil industry, 'engagement' means turning a blind eye to deforestation

Regardless of who they trade with, palm oil producers should be hearing the same message: clearing rainforests doesn’t pay. Yet that message is not getting through.
Greenpeace has just concluded an investigation into environmental and human rights abuses in the global palm oil trade. What we uncovered incriminates almost all of the major palm oil traders.
This post is a commentary. The views expressed are those of the author, not necessarily Mongabay.

Over the past decade, the environmental and human cost of palm oil production has become a mainstream concern. Consumers and communities demand change, and most of the big players in the palm oil industry have promised to act — yet palm oil from rainforest destruction is still filling the products on our supermarket shelves.

Why haven’t companies made good on that promise? All of the major traders have the same policies and say they’re engaging with their suppliers. Regardless of who they trade with, palm oil producers should be hearing the same message: clearing rainforests doesn’t pay. Yet that message is not getting through.

Greenpeace has just concluded an investigation into environmental and human rights abuses in the global palm oil trade. Our investigation focused on palm oil growers in Indonesia that supply the IOI Group. What we uncovered incriminates almost all of the major palm oil traders. Yet instead of acting on our findings, the industry now claims that monitoring suppliers would be ‘Orwellian’ and excluding those clearing rainforest would be playing ‘supply chain cop.’

There appears to be a willful and collective blindness to well-documented environmental and social abuses by palm oil suppliers. Consider this example: IOI receives palm oil from five Goodhope Asia Holdings Ltd mills in Kalimantan. It doesn’t trade directly with Goodhope but buys the oil through three intermediary traders — Wilmar International, Musim Mas, and Golden Agri Resources (GAR). IOI and the other three traders know they are buying and selling Goodhope’s palm oil. The traders have ‘no deforestation’ policies; all five companies are members of the Roundtable on Sustainable Palm Oil. Indeed, IOI and Goodhope both sit on the RSPO’s Board of Governors.

In addition to the mills in Kalimantan that supply the oil these companies are trading, Goodhope has a sizeable landbank in Papua. This includes the PT Nabire Baru concession, which was, at the time Goodhope acquired it, almost entirely covered in primary forest. Some of the land belonged to local people and government maps indicate it also includes large areas of forested peatland.

As an RSPO member, Goodhope is required to publish its plans for public consultation before any development takes place. It claims to have submitted the paperwork to the RSPO, but the documents were never published. Nonetheless, Goodhope began clearing PT Nabire Baru, with armed state security forces present during the clearance of the community’s sago gardens. Satellite imagery suggests that Goodhope was still deforesting PT Nabire Baru as recently as mid-2016.

Communities and NGOs in the region have exposed the scandal; public reports date back to at least 2013. In April 2016, the local community filed a formal complaint to the RSPO. The RSPO has yet to publish the grievance but the case was discussed by its Complaints Panel in July. By coincidence, outstanding grievances involving GAR, Wilmar, and IOI were also discussed at the same meeting, which suggests these companies were aware of the agenda and at the very least reviewed the minutes.

However, when we contacted the traders with our findings, all four claimed to be unaware of any problems. GAR, Musim Mas, and Wilmar promised to engage with Goodhope but made no commitment to suspend trade with the company despite overwhelming evidence that it was actively breaching their ‘no deforestation’ policies. IOI deferred responsibility to the other traders and took no steps to ensure the other traders stopped supplying it with Goodhope’s palm oil. As far as we know, all four traders are still sourcing from Goodhope, and Goodhope is still destroying rainforests.

Is the ‘engagement’ approach that companies are taking really designed to succeed, or is it just designed to give the appearance of progress without any real change? By contrast, NGOs have called on companies to operate transparently, to monitor their suppliers and to exclude those that refuse to stop clearing rainforests or persist in human rights abuses. Engagement has a role to play — but it must come with strict timelines, and with consequences for lack of action. If the only consequence of getting caught clearing rainforest is that a customer invites you to a seminar, then why on earth would you stop?

The stakes are high, and getting higher. It is already ‘game over’ for much of Sumatra, and Kalimantan is fast becoming a wasteland. Now the same industries are expanding into Papua and beyond. If companies keep turning a blind eye to the rogue operators in their supply chains, then Papua and its people will pay the price.