Palm Oil Monitor – Weekly Update 7th October 2019

COMMENT: A Decade after G20 Pittsburgh and CGF Zero Deforestation

Just over 10 years ago, the world had its eyes on Pittsburgh for the G20 meeting. The world was expecting major announcements on climate change in the lead-up to the UNFCCC Copenhagen Conference taking place two months later.

The G20 delivered – in the form of a speech by Indonesian President Yudhoyono, who declared the country would reduce its greenhouse emissions by 26 per cent by 2020, and by 41 per cent if there was international support.

Six months later, he announced he would introduce a moratorium on forest clearing in Indonesia. This moratorium would be undertaken in conjunction with the Government of Norway, which promised USD1 billion if Indonesia stopped deforestation in its tracks.

A few months after that, the Consumer Goods Forum pledged to help end deforestation by 2020 by introducing deforestation-free supply chains among its 400 primarily Western members.

Of these three targets, none have been met. Indonesia has not reduced its emissions, and deforestation has not been removed from the supply chains of major Western brands.

What went wrong?

In 2006, Indonesia and ASEAN experienced one of its worst haze events on record. In 2007, Indonesia hosted the UN Climate Change Conference. There was an appetite for action at the intergovernmental level. Then in 2008, Western NGOs started connecting the dots between tropical countries and materials sourcing for consumer goods in Western countries. The finger swung towards palm oil.

This prompted Western consumer goods companies – particularly European brands such as Unilever and Nestle – to make immediate commitments to changing their supply chains and procurement. They did this without quite understanding the many aspects of their supply chains, or the country-specific contexts of those supply chains.

There were parallels in the government and policy space.

Aid agencies made ridiculous assumptions around how developing countries worked, and how policies were developed, or how legislation was written and implemented – if implemented at all.

Major consulting houses wrote reports that said – with a completely straight face – that major land reforms in countries such as Indonesia would make degraded land swaps completely feasible.

The idealism was admirable; the naivete was laughable.

But here’s what went wrong.

Western companies are generally not land-use policy experts. They are often not experts in the countries from which they source their materials.

Procurement staff are generally interested in the quality of the product they are sourcing, quantities available and the right price. These are their major concerns.

These companies were faced with a problem: they were being accused of contributing to an environmental crisis.

But the best information they had was coming from the NGOs themselves. They could not obtain it from developing country governments, which simply did not have the resources to assemble the information.

And up until this point, expertise in the causes of deforestation in developing countries and interactions with other policies was limited.

The more convenient solution for companies was to simply accept that they could help end this crisis, and that they could be sustainability heroes, if they simply listened to the NGO story that deforestation is simple, and that ending deforestation is simple. It may just be as simple as stopping the use of palm oil.

Have things changed? Apparently not.

Two weeks ago, a Swiss NGO released a report stating that deforestation and labour rights problems could be stopped if Nestle changed its palm procurement practices, stating that certification wasn’t doing its job.

What lessons can be learned?

Western companies need to stop being lazy when it comes to sourcing and sustainability problems. Western companies need to know more about the countries they are operating in and the needs of those countries, whether it’s economic growth, education, health and environmental degradation.

Thinking a country’s sustainable development problems can be solved by setting up a new deforestation policy is no better than thinking a country’s inhabitants will be better off if they ‘just learn English’.

The most recent reports indicate that very few CGF companies will meet their 2020 commitments. Is anyone surprised?

 

Malaysian plantation maps to be released

Maps of Malaysia’s oil palm plantations are set to be released over the next few weeks, after several years of delays.

RSPO had previously attempted to publicly release maps of its members’ maps, but this was found to possibly contravene Malaysia’s 1972 Official Secrets Act.

In March of this year Malaysia’s cabinet approved the release of plantation locations. The government is working with the Malaysian Palm Oil Board to release the maps.

This will be a welcome development for a number of observers and commentators, particularly NGOs, but we’re not completely convinced it represents a significant change to the policy environment in Malaysia – most of the country’s companies are already completely transparent about their plantation locations.

 

NGO ROUNDUP

Rainforest Action Network claims that palm oil sourced by a number of major brands including GAR and Musim Mas has been sourced from illegal plantations in conservation areas in Aceh. The claim of the illegality is that areas were cleared in 2013 illegally.

Rainforest Foundation Norway (RFN) is arguing that targets by the aviation industry to replace fossil aviation fuel with alternative fuels will somehow mean that 3 million hectares of forest might be lost in the future. RFN bases this claim on the potential use of palm or soybean feedstocks to make aviation HEFA (hydroprocessed esters and fatty acids). As far as we’re aware using palm oil FAME for aviation fuel hasn’t been perfected and is potentially years away. We suspect this argument will only resonate with European audiences. But it’s worth remembering that of the world’s busiest 100 air routes, none involve an airport in continental Europe.  The 9th busiest is between Jakarta and Surabaya.

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