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Palm oil industry failing to honour 2020 no-deforestation pledges

Commitments to ending forest destruction across palm oil supply chains remain unfulfilled 10 years after they were made, with companies failing to report on how they are monitoring their own and their suppliers’ operations.

A decade after consumer goods companies that use palm oil in their products pledged to stamp out deforestation, most firms across the palm oil supply chain still do not disclose details of how they monitor the implementation of such policies in either their own or their suppliers’ operations, a new report has revealed.

The report, by international conservation group Zoological Society of London, urges the palm oil industry to ramp up reporting on their forest conservation efforts and take greater responsibility in tackling climate change and biodiversity loss.

The analysis—an annual assessment of 100 of the world’s biggest palm oil producers, processors and traders—finds while 71 per cent of the companies surveyed have made clear zero-deforestation vows, just 42 per cent disclose how they ensure compliance in their operations.

And although 55 per cent of palm oil producers assessed apply zero-deforestation commitments to their suppliers, only 10 per cent comprehensively report on how they are preventing forest destruction across their supply chains.

Things don’t look any better for other elements of firms’ No Deforestation, No Peat, No Exploitation (NDPE) pledges, with 72 per cent of companies making thorough commitments to no planting on carbon-rich peatlands, but only 20 per cent reporting on the implementation of such policies.

Coming a year after Indonesia saw its worst forest fires since the catastrophic blazes in 2015, the report also reveals that among corporates committed to zero burning, only about two in three firms disclose adequate information of fire management and monitoring practices.

Palm oil—an ingredient found in about half of supermarket products globally—has become one of the world’s most controversial commodities due to the myriad social and environmental ills it brings, with campaigns to boycott it often raising significant consumer awareness.

The clearance and burning of forests and peatlands to create oil palm plantations are among the biggest drivers of deforestation in the tropics, laying waste to the habitats of orangutans and tigers as well as natural carbon sinks, and so fuelling the world’s biodiversity and climate crises.

A recent analysis by environmental campaigners Greenpeace revealed that in Indonesia—the largest producer of palm oil globally, followed by Malaysia—a land area eight times the size of Bali burned in the last five years alone, with 30 per cent of razed areas located in palm oil and pulpwood concessions.

Ten years ago, the Consumer Goods Forum (CGF)—a network of some 400 retailers, manufacturers and other players from 70 countries—made a commitment to end deforestation, the second-largest contributor of human-made greenhouse gas emissions, in member companies’ supply chains by 2020.

But in an open letter sent in June, international non-governmental group Global Witness stressed that fires, deforestation, peatland destruction, and human rights violations have continued unabated after the vow was made.

It argued that firms “have done little to leverage their market and supply chain influence for tangible change” and have continued sourcing from the same suppliers responsible for forest clearing and exploitation “without repercussion or accountability”.

“While progress has been made by palm oil companies in setting clear commitments to tackle deforestation, it is now certain that many 2020 zero-deforestation targets will not be met,” said Eleanor Spencer, ZSL’s palm oil technical advisor. These deadlines cannot be extended any further if the world is to avert irreversible biodiversity decline and climate catastrophe, she added.

Environmentalists have blamed poor law enforcement for the havoc oil palm growers wreak on Southeast Asia’s forests, calling for extended legal and policy reforms.

Banks have also come under fire as they continue dishing out loans to forest destroyers. According to a 2019 report by the World Wide Fund for Nature, only 9 per cent of Southeast Asian financial institutions have adopted NDPE policies. Even then, the implementation of these policies has been patchy and slow.

Nina Roth, director of responsible investment at the Bank of Montreal’s Global Asset Management, said there were still “big gaps” in how zero-deforestation commitments are reflected in financiers’ due diligence standards, and that even big international banks lack environmental and social standards on palm oil.

In response to consumer concerns over deforestation, Australian supermarket brand Darrell Lea removed palm oil from its products in September, two years after British supermarket chain Iceland pledged to stop using the ingredient in own-brand products.

Policymakers, too, have sought to curb the use of the crop due to its contribution to global carbon emissions, with the European Union—the second-largest buyer of Indonesian palm oil—aiming to gradually phase out palm oil-based biofuels by 2030. Europe’s use of the ingredient in food and cosmetics has already dropped, partly due to pressure piled on major consumer goods companies.

Industry advocates have highlighted palm oil’s outstanding efficiency, pointing out that other vegetable oil crops such as coconut, sunflower or soybean oil need much more land to grow on. As well as moving the damage elsewhere, this means a switch to such alternatives could lead to greater habitat destruction.

To justify its shift to sunflower oil, Darrell Lea said the crop does not require a tropical environment to grow, and “therefore isn’t linked to rainforest deforestation”.

ZSL warned that boycotting palm oil could result in reduced efforts to produce it sustainably, urging companies to purchase palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO)—the world’s largest palm oil certification scheme—to help ensure that their products adhere to stringent sustainability requirements.

The key to changing the industry, Spencer said, is better collaboration: “The responsibility to tackle deforestation and improve the sustainability of palm oil production is shared by all actors in the supply chain and key stakeholders outside of it.”

She added: “It is crucial now that the industry and its stakeholders come together to ensure sufficient action is being taken on the ground, and that these zero-deforestation targets are not empty promises.”

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