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Indonesia bans food labeled ‘palm oil-free,’ in move welcomed by industry

L’intermarché Supermarket in Quebec city, Canada. Image courtesy of Wilfredor/Wikimedia Commons.

  • The Indonesian food regulatory agency says there’s an implication that products labeled “palm oil-free” are healthier, which would constitute false advertising.
  • But the agency has also adopted a talking point of the palm oil industry: that the labeling is a ploy by critics and competitors to undermine Indonesian palm oil.
  • Authorities have already begun inspections at supermarkets to remove food products labeled palm oil-free, but an economist warns that the move could trigger a dispute at the World Trade Organization.
  • The actual question of whether or not palm oil is less healthy than other vegetable oils remains murky, in part because much of the research on the issue was authored by an industry lobby group.

JAKARTA — The Indonesian government has banned food labeled as being “palm oil-free,” in its latest push to protect the commodity against a growing consumer backlash.

The Drug and Food Control Agency (BPOM) made the announcement Aug. 21 and said it had ordered checks at retail outlets nationwide. It justified the move with the claim that the term “palm oil-free” implies that a food product is healthier. As such, said BPOM head Penny K. Lukito, the term constitutes misleading labeling, which the agency prohibits.

“These products are sold at higher-end retailers so maybe there’s [the implication that it’s] healthy food,” she said. “So we need to fight that and educate the public that just because [a product contains] palm oil, it doesn’t mean it’s an unhealthy food. That product might contain trans fats from other vegetable oils. So we have to tell the public not to link palm oil with [adverse] health aspect.”

Penny said her agency had recently found products being sold with “palm oil-free” labeling, and was now working to inform retailers and consumers that such labeling was illegal.

“So every product that you find in the market, whether food products or cosmetics, if they have ‘palm oil-free’ labels, then they’re illegal products,” she said.

The Ministry of Trade has followed up with inspections at a dozen supermarkets in Jakarta, resulting in the removal of goods with “palm oil-free” labels, Reuters reported.

The move, however, could backfire, said University of Indonesia economist Fithra Faisal Hastiadi. He told local media that other countries could deem it a non-tariff measure, a technical barrier to trade, and file a dispute with the World Trade Organization (WTO).

Newly established oil palm plantation in Central Kalimantan. Photo by Rhett A. Butler.
Newly established oil palm plantation in Central Kalimantan, Indonesia. Image by Rhett A. Butler/Mongabay.

Industry talking point

Indonesia, the world’s biggest producer of palm oil, has been pushing hard to shore up the industry over its association with widespread deforestation, land grabs, and labor rights abuses. Citing concerns that production of the crop, often on land cleared of rainforest, contributes to global carbon emissions and thus exacerbates climate change, the European Commission passed a measure in March to phase out palm oil-based biofuels by 2030. Indonesia and Malaysia, the No. 2 producer, have since adopted retaliatory trade measures against the European Union, with Indonesia even threatening to pull out of the Paris climate agreement in protest.

A popular talking point for both the Indonesian and Malaysian governments is that the EU’s hostility to palm oil stems from its desire to protect European vegetable oil producers. The BPOM’s Penny reiterated this point, saying the newly outlawed labeling was a ploy to discredit Indonesia’s palm oil industry.

“There are so many efforts from other countries to suppress the competitiveness of Indonesia’s palm oil products,” she said.

The ban has been welcomed by the Indonesian Palm Oil Board (DMSI), an industry association, whose chairman, Derom Bangun, called it a much-needed move to counter the “black campaign” targeting the palm oil industry.

“Together, we contain outside efforts to discredit the palm oil industry which is said to be destroying the environment and harmful for health,” he said.

Derom said the accusations of deforestation were unfair, and that no forest had been cleared to make way for oil palm plantations since the introduction of the Indonesian Sustainable Palm Oil (ISPO) certification scheme in 2011.

The evidence, however, says otherwise. Large-scale plantations, primarily for oil palms, were responsible for 57 percent of the deforestation that occurred in Indonesia from 2008 to 2010, according to a recent study by researchers at Duke University. And while other factors grew in prominence after that period, plantations still accounted for 25 percent of forest loss between 2014 and 2016.

A range of food products for sale at a supermarket – mainly cakes, bread, and other baked goods, many of them containg a surprising amount of Palm Oil. © WWF / Richard Stonehouse

Mixed messages on health

On the question of whether palm oil is a less than healthy ingredient, the science is murkier. While it doesn’t contain trans fats, considered the unhealthiest type of fat as it reduces levels of “good” cholesterol, palm oil does contain a much higher percentage of saturated fats — which can be harmful to cardiovascular health — than other vegetable oils.

Previous research has linked consumption of palm oil, found in products ranging from Oreo cookies to Nutella chocolate spread, to increased risk of mortality from heart disease caused by narrowed arteries, raised levels of “bad” cholesterol, increased risk of cardiovascular disease, and other adverse effects.

A meta-analysis of increased palm oil consumption in 23 countries found a significant relationship with higher mortality from coronary artery disease. Another meta-analysis found that, when consumed as part of a balanced diet, “Palm oil does not have incremental risk for cardiovascular disease.”

There have been mixed messages in the scientific literature about the health impacts of palm oil because much of the research has been authored by an industry lobby group, according to a study published in the Bulletin of the World Health Organization. The study noted that the tactic employed by the palm oil industry was similar to that of the tobacco and alcohol industries, and yet the palm oil industry received comparatively little scrutiny.

“Four of the nine studies in our literature search showing overwhelmingly positive health associations were authored by the Malaysian Palm Oil Board, again drawing parallels with the tobacco and alcohol industries and calling into question the credibility of claims in favour of increased palm oil consumption,” the researchers write.

The study also warns of a “cocktail effect,” in which palm oil on its own may not be detrimental to health, but could be damaging when combined with other ingredients used in highly processed foods.

The Indonesian Palm Oil Producers Association (GAPKI) said the health concerns about palm oil were exaggerated and that other vegetable oils were likely to be more harmful.

“A health organization in Italy said that having no palm oil in a product actually didn’t guarantee the safety [of consuming it],” GAPKI deputy secretary-general Agam Fatcurrochman told local media, “because the alternative often affects health.”

In 2016, the European Food Safety Authority (EFSA) issued a warning on the health risks of palm oil, saying that it generated more of a potentially carcinogenic contaminant, known as GE, than other vegetable oils when refined at sufficiently high temperatures. It did not, however, recommend consumers stop eating it, and said further study was needed to assess the level of risk.

Following that report, Italy’s largest supermarket chain, Coop, banned palm oil in all its own-brand products. Barilla, the world’s biggest pasta maker, also eliminated palm oil from many of its confectionery products.

But another major Italian producer, Ferrero, whose Nutella spread consists of 20 percent palm oil, stood by its use of the product. The company said it was possible to bring GE levels so low that it would be hard to find ever trace amounts of the contaminant even when using testing equipment.


Austin, K. G., Schwantes, A., Gu, Y., & Kasibhatla, P. S. (2019). What causes deforestation in Indonesia? Environmental Research Letters14(2), 024007. doi: 10.1088/1748-9326/aaf6db

Chen, B. K., Seligman, B., Farquhar, J. W., & Goldhaber-Fiebert, J. D. (2011). Multi-Country analysis of palm oil consumption and cardiovascular disease mortality for countries at different stages of economic development: 1980-1997. Globalization and Health7(1). doi: 10.1186/1744-8603-7-45

Odia, O. J., Ofori, S., & Maduka, O. (2015). Palm oil and the heart: A review. World Journal of Cardiology7(3), 144-149. doi: 10.4330/wjc.v7.i3.144

Kadandale, S., Marten, R., & Smith, R. (2019). The palm oil industry and noncommunicable diseases. Bulletin of the World Health Organization97(2), 118–128. doi: 10.2471/blt.18.220434


Banner image: L’intermarché Supermarket in Quebec city, Canada. Image courtesy of Wilfredor/Wikimedia Commons


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