- PalmWatch, an online, open-source tool, is seeking to bring greater transparency to the global palm oil supply web, to better help consumers trace the impact of the commodity.
- A key hurdle to transparency has long been the fact that batches of palm oil and their derivatives sourced by consumer brands like Nestlé and PepsiCo potentially contain product from hundreds of mills processing palm fruit from thousands of plantations.
- By scraping various websites with mill disclosure data and standardizing the information in one place, PalmWatch can come up with a supply chain map that can link specific mills, suppliers and consumer brands to harms associated with palm oil.
- Advocacy groups have welcomed the launch of the tool, saying it will allow for improved targeting of campaigns to get brands to push for more sustainable practices in their supply chains.
JAKARTA — Farm-to-fork traceability has become an increasingly urgent, and often required, component of global supply chains, with a growing number of commodities now trackable all the way back to their source. But for palm oil, one of the most controversial yet widely used commodities today, full traceability from the plantation to supermarket shelves to households remains a challenge due to the complexity of the supply chain.
A single ton of palm oil derivative like stearic acid, for instance, used in detergents and cosmetics, is likely to consist of palm oil from hundreds of mills that, in turn, process palm fruit harvested from thousands of plantations.
These webs of plantations and mills make it difficult to know whether palm oil is legally sourced and produced from an environmental and social conflict-free area.
A new open-access online tool, developed by human rights NGO Inclusive Development International and the University of Chicago Data Science Institute, aims to address this issue. Called PalmWatch, it links 15 major industrial consumers of palm oil, such as Nestlé, PepsiCo and Unilever, to the ground-level impacts of their palm oil consumption, including deforestation.
To identify where these brands are sourcing their palm oil from, PalmWatch scraped individual brands’ most recent online supply chain disclosures and found more than 2,000 mills.
The information about these mills is scattered across various websites, with much of the data not standardized, said Dustin Roasa, research director at Inclusive Development International.
“PalmWatch puts all brands’ mills disclosure on one database, standardizes them and makes them searchable,” he said at the online launch of the tool on Feb. 22.
Besides being scattered, the supply chain information disclosed by the brands is usually limited to the mills where the palm fruit is processed, not the plantations where the fruit is grown, Roasa said.
Tracing the supply chain from the mill back to the plantation level is crucial because this is where most of the harm associated with palm oil actually occurs. PalmWatch tries to fill in this blank by determining which cultivation areas supply these mills.
It assigns each mill a catchment area of 50 kilometers (30 miles) in radius, based on the fact that harvested palm fruit rots quickly and must be taken to a mill in less than 48 hours, according to David Uminsky, executive director of the Data Science Institute.
But a simple circle on a map can’t account for features like mountain ranges, roads and rivers. That’s why the platform combines the data of the catchment area with deeper analysis of road networks to predict more precisely where palm fruit is likely to be transported for processing, Uminsky said.
This approach reduces overlap and double-counting of cultivation areas, which is particularly important for accuracy in densely planted countries like Indonesia, the world’s No. 1 producer of palm oil.
“The tool then integrates this more complete map of the supply chain with information about the ground-level impacts of oil palm cultivation — such as satellite imagery tracking deforestation — to link specific mills, suppliers and, ultimately, consumer brands to those harms,” Roasa said.
All these data and features are available for free online, making PalmWatch different from other existing tools to track the palm oil supply chain.
“The fact that so much financial information is either behind a paywall (e.g., only accessible with a Bloomberg Terminal or similar subscription service) or requires painstaking and time-consuming research to find is a significant barrier to corporate accountability,” Mignon Lamia, the communications director at Inclusive Development International, told Mongabay. “PalmWatch is part of a suite of investment and supply chain research tools that Inclusive Development International is developing to make this information more accessible to the public, including human rights and environmental advocates.”
PalmWatch is also open source, meaning that any data scientist looking at PalmWatch can see its code and add to it, Lamia said.
“So it is much more open and collaborative, both on the user end and back end,” she added.
Deforestation
PalmWatch uses 20 years of deforestation data from the University of Maryland’s Global Forest Change map, enabling it to show historical forest loss and produce estimates of future deforestation risk associated with each palm oil mill.
This allows consumer brands or other users to assess both past deforestation impacts and future risk associated with specific mills.
“Palm oil has been driving land expansion in Indonesia and has converted millions of hectares of forest to palm oil,” Syahrul Fitra, Greenpeace Indonesia forest campaigner, told Mongabay. “This affects not only the people but also biodiversity, orangutan habitat — a lot of endemic habitat has been lost.”
He said PalmWatch will be useful for Indonesia by making it easier to identify links between brands, mills and plantations that are producing unsustainable palm oil. Having this information will then allow campaigners to call for brands to push for more sustainable practices in their suppliers, Fitra said.
“Currently most advocacy in Indonesia is focused on policies and company activities, but how to push the companies to shift their destructive activities? Based on Greenpeace’s experience, we have a market campaign and it has had a lot of impact on the companies’ activities,” he said.
Uminsky highlighted Indonesia as the country with the highest past deforestation. He also identified Colombia, Latin America’s largest producer of palm oil, as another hotspot. According to PalmWatch data, Colombia doesn’t have a lot of past deforestation.
“But if you look at the recent deforestation score, it’s very high,” Uminsky said. “So this tells you where the next deforestation campaign needs to happen.”
Besides showing the deforestation scores of palm oil-producing countries, PalmWatch also shows the deforestation footprint of global brands.
It found that numerous global brands that have been lauded for their ESG credentials are actually contributing to massive deforestation across the globe as a result of their palm oil use.
The brands featured on PalmWatch as driving palm oil-related deforestation include at least one company, Nestlé, that has previously committed to eliminate deforestation from its supply chain altogether and that boasts an A rating from MSCI, the leading ESG ratings firm.
In total, nine companies with an A or higher rating from MSCI are featured on PalmWatch. PepsiCo is among them, and is associated with the most deforestation since 2000 out of all the brands featured.
All nine are ranked by MSCI as leaders in raw material sourcing and/or are recognized for the allegedly low carbon footprint of their products. Two companies, General Mills and Unilever, have perfect AAA scores.
“MSCI considers Unilever a leader [in sustainability],” Roasa said. “Obviously this is a big disconnect. I think the big disconnect we see there is that MSCI relies on what Unilever is saying. PalmWatch is a way to ground-truth that.”
Some data sets and features are still lacking in the first version of the tool, including data on the traders that buy palm oil from the mills and sell them to consumer brands, as well as data on human rights abuses and land conflicts associated with the industry.
Roasa said PalmWatch might add trader data in a future update because it’s a big part of the supply chain. Future versions of PalmWatch will also incorporate geolocated information on human rights impacts, gathered from corporate human rights complaints databases and crowdsourced from local communities and their civil society supporters.
Similar to the deforestation data, users will be able to see allegations of human rights impacts associated with specific mill and plantation areas.
Banner image: Deforestation for oil palm plantations in Sabah in 2012. Image by Rhett A. Butler / Mongabay.
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