Bridges Trade BioRes • Volume 10 • Number 4 • 5th March 2010

BBC Documentary shakes up Sustainable Palm Industry

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Multinational conglomerate Unilever has blacklisted Duta Palma, a certified sustainable Indonesian palm producer, after a BBC documentary revealed the company’s staff clearing protected rainforest to make way for plantations. The move comes only two months after Unilever blacklisted another Indonesian company, PT SMART, for unsustainable practices. Both blacklisted companies are approved members of the Roundtable on Sustainable Palm Oil (RSPO), the international body responsible for certifying palm producers.

For years, several green groups have been campaigning against the palm industry, which they say destroys wildlife habitat, causes widespread forest loss and releases huge quantities of greenhouse gases into the atmosphere, primarily in Southeast Asia. Some 80 percent of the world’s palm oil supply originates in Indonesia and Malaysia.

In an attempt to address global concern over the crop, a coalition of industry groups - including Unilever - and the environmental NGO WWF set up the RSPO in 2004 to promote “the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders.”

Revelations undermine sustainable certification

But critics say the recent discovery of unsustainable practices by certified “sustainable” companies calls the viability of the RSPO into question. Industry watchers suggest the revelations could drive a wedge of mistrust between purchasers and growers, making it increasingly difficult to justify the premium price of RSPO certified oil.

Unilever is the world’s largest purchaser of palm oil and has much at stake in ensuring RSPO certification remains credible. In an attempt to combat the negative image cast onto one of their key ingredients, the conglomerate has pledged to purchase all of its 1.3 million annual tonnes of palm oil from certified sustainable plantations by 2015.

The oil is found in a variety of foods, including margarine, cooking oil, potato chips, and cakes. It is also an ingredient in many cosmetics, soaps, shampoos, and detergents. Recently, palm oil has also begun to be used as a biofuel.

Unilever has reacted quickly when presented with evidence of unsustainable practices by its producers in the past. Three months ago, when Greenpeace alerted the company to illegal logging practices by PT SMART, the largest palm oil producer in Indonesia, it quickly suspended their US$33 million supply contract.

As a founding member of the RSPO and one of only a handful of companies committed to purchasing segregated sustainable palm Unilever has a vested interest in ensuring the certification system remains sound.

According to the RSPO, more than 28 million tonnes of palm oil are produced around the world each year - almost one third of the world’s vegetable oil production - and Indonesia is the world’s largest producer. But only three percent of world’s palm oil production is RSPO certified.

Sustainability standards “unenforceable”

Indonesian government representatives said they are aware of the footage in the BBC documentary and that the government is clamping down on illegal logging. Similarly, following their suspension, PT SMART admitted to “minor mistakes” and introduced stricter environmental controls. However, it is the enforcement of regulations, rather than establishing policy that has proven to be difficult.

Shailendra Yashwant, Greenpeace director for Southeast Asia told the BBC that RSPO certification is a “greenwash” because those commitments promised by producers are unenforceable on the ground.

Yashwant suggests that a more effective measure to help preserve Indonesian rainforests would be strong action by Jakarta on deforestation. “We want the Indonesian government to immediately announce a moratorium on further deforestation…beginning with peat lands,” he said.

With a cultivation area of 63,886 hectares, Duta Palma is a significant player in the palm industry. Duta Palma’s operation is managed by seven smaller companies: PT Eluan Mahkota, PT Johan Sentosa, PT Wana Jingga Timur, PT Cerenti Subur, PT Mekar Sari Alam Lestari, PT Aditya Palma Nusantara, and PT Duta Palma Nusantara.

According to RSPO, areas undergoing palm oil cultivation have grown by about 43 percent over the past two decades. Most of this new growth has occurred in Malaysia and Indonesia.

More information

Those located in the UK can access the documentary “Dying For a Biscuit” on the BBC’s website: http://www.bbc.co.uk/programmes/b00r4t3s

ICTSD Reporting; “Unilever drops major palm-oil producer,” THE INDEPENDENT, 22 February 2010; “Unilever stops buying palm oil from Indonesian planter,” REUTERS, 24 February 2010; “Setelah Kasus Sinar Mas, Unilever Blacklist CPO Duta Palma,” DETIK FINANCE, 25 February 2010; “Orangutan survival and the shopping trolley,” BBC, 22 February 2010.