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Supply Chain
A Busy Week for Palm Oil Sustainability:
Indonesia Cops Out, Singapore Steps In

It was something of a ‘two steps forward, one step back’ kind of week in the ongoing quest for sustainable sourcing of palm oil — potentially the most prolific and embattled ingredient in the consumer goods industry.

First, five multinationals active in Singapore — Unilever, Danone, Ayam Brand, IKEA and Wildlife Reserves Singapore — came together this week to drive an increase in the amount of sustainable palm oil sourced in the country, with the goal of delivering products that have not contributed to haze pollution or deforestation to consumers.

The Singapore Alliance for Sustainable Palm Oil (SASPO) is supported by the five founding members, who together produce some of the most popular everyday brands used by Singaporeans. WWF-Singapore first engaged the companies with the idea of the alliance, and the NGO will remain on the steering committee to support and guide members as the alliance grows.

The formation of the SASPO was prompted by the public outcry over 2015’s prolonged haze pollution. Through the We Breathe What We Buy campaign, which reached over 20 million people globally, WWF-Singapore was able to raise awareness of the link between haze pollution and the slash-and-burn practices used in the production of palm oil, and enlist public support for a switch to sustainable palm oil.

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“The alliance sends a clear signal to consumers about which companies are committed to sustainability,” says Elaine Tan, CEO of WWF-Singapore. “This is a timely opportunity for NGOs and businesses to work together towards transforming the palm oil industry.”

The mission of the alliance is to work towards 100 percent sustainable palm oil in Singapore. If this happens it would mean consumers could then be certain the products they buy were not contributing to deforestation or haze pollution. Palm oil is in around 50 percent of the goods on supermarket shelves and currently it is not possible for consumers to identify which products contain sustainable palm oil, if any.

The announcement of the formation of the SASPO was quickly followed by one of the dissolution of the Indonesian Palm Oil Pledge (IPOP), a partnership between six Indonesian palm oil giants with a mission to foster the production of “sustainable palm oil that is deforestation free, expands social benefits, and improves Indonesia’s market competitiveness.”

IPOP was formed by the palm oil traders, the Indonesian government, and the Indonesian Chamber of Commerce in November 2014 as a platform to advocate for reforms to support private sector action to protect forests and human rights. According to Glenn Hurowitz, Senior Fellow at the Center for International Policy, during Indonesia’s haze crisis of 2015, IPOP fell under attack from interests who wanted to allow companies to continue to burn forests for large-scale palm plantations in frontier areas such as Papua. In the course of this, IPOP and its members apparently failed to launch a sufficient defense of their conservation agenda, and opponents renewed their attack, which led up to today’s announcement.

“IPOP may no longer exist, but the need for robust industry and government action to protect Indonesia’s forests and people is as urgent as ever,” Hurowitz said in a statement. “If the palm oil, paper, and rubber industries want to avoid a repeat of the haze disaster, they will need to team up to create comprehensive, transparent implementation mechanisms to ensure that only suppliers free of deforestation and human rights abuse obtain access to markets. Such a system will be far more affordable and effective than individual companies trying to play whack-a-mole with rogue suppliers.”

“IPOP was an important mechanism for Indonesian companies to differentiate themselves from their competitors by taking real steps to halt the rampant destruction of forests and peatlands, to end the widespread abuse of workers and address the long-standing conflicts resulting from the displacement of local communities from their lands for industrial scale plantations,” said Gemma Tillack, Agribusiness Campaign Director for Rainforest Action Network. “IPOP’s dissolution is a disappointing step backward in the urgent fight to achieve truly responsible palm oil and is a major lost opportunity for Indonesia’s palm oil industry to maintain its stake in the global market.

“IPOP’s former members — Wilmar, Golden Agri-Resources, Astra Agro Lestari, Musim Mas, Asian Agri and Cargill, must now meet their responsible palm oil promises independently,” Tillamack continued, “and demonstrate that they intend to follow through on the commitments made to smallholders, local communities, workers and customers across the globe that are demanding fundamental changes in the way the palm oil is produced.”

Hurowitz points out that the Indonesian government itself has recently taken constructive steps to avoid a repeat of the haze crisis, including promising prosecutions of companies that contributed to the haze and launching a peat conservation and restoration program, but the government needs companies to back its efforts.

“The palm oil industry has won a hard-earned reputation as a leading driver of deforestation and human rights abuse,” Hurowitz said. “As a result, it has lost customers. If it is to instead build a reputation for sustainability, it will need to find the courage to team up and create a new mechanism that actually delivers results for Indonesia’s people and forests.”

Not surprisingly, palm oil was one of five food commodities recently found by Oxfam to produce more greenhouse gases than any country aside from China and the U.S. While many multinationals dependent on palm oil are working to eliminate deforestation from their supply chains, some – such as Unilever and Ecover — are exploring deforestation-free alternatives such as algal oil.


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