businessGreen | 6 December 2013
World's biggest palm oil company pledges to halt deforestation
By Jessica Shankleman
One of the world's largest agri-businesses has pledged to end deforestation throughout its supply chain, in a move that represents a major step forward for companies seeking to source sustainable palm oil, soya beans and sugar.
Wilmar International yesterday signed a deal with consumer goods giant Unilever, which has promised that 100 per cent of the palm oil used in its supply chain would by fully traceable by the end of 2014.
As Wilmar controls 45 per cent of the world's palm oil market, supplying other household brands such as Procter and Gamble, Mondelez and Reckitt Benckiser, it has faced huge pressure from NGOs and businesses to develop more environmentally and socially sustainable practices.
The company has already taken steps to preserve high conservation value (HCV) forests and peatland on its own concessions, although campaigners have been quick to point out that deal covers just a slither of the palm oil it trades.
A report by Greenpeace earlier this year accused Wilmar of trading with companies that deforest areas illegally, set fire to peatland and clear areas known to be used as habitats for tigers.
But the new policy aims to establish mechanisms to help Wilmar monitor activities among its subsidies and third-party suppliers, to ensure it can halt deforestation across the supply chain.
"We believe that the palm oil industry can provide a sustainable and affordable source of vegetable oil to meet rising global demand for responsible products," said Wilmar chairman and chief executive Kuok Khoon Hong, in a statement.
"We can produce palm oil in a way that protects forests, clean air and local communities, all while contributing to development and prosperity in palm oil growing regions. We know from our customers and other stakeholders that there is a strong and rapidly growing demand for traceable, deforestation-free palm oil, and we intend to meet it as a core element of our growth strategy."
Luigi Sigismondi, Unilever's chief supply chain officer, said he was truly impressed by the commitment and urged other suppliers to follow suit.
"Unilever firmly believes that it is only through constructive dialogue and close cooperation that we can lead the transformation of the industry," he said.
"Wilmar, as our strategic partner in palm oil, is clearly committed – with us – to accelerating the much-needed sustainable market transformation and to helping us achieve transparent, traceable and certified palm oil supply chains."
The policies were developed with consultancy The Forest Trust (TFT), which already works with a number of agri-businesses to help them reduce the environmental impact of their operations and supply chains, such as Asia Pulp and Paper as well as consumer facing businesses like Nestle.
TFT executive director Scott Poynton said he expected the new deal to transform the palm oil industry.
"Few companies dominate their sectors the way Wilmar dominates palm oil," he said.
"[This] announcement... dwarfs in ambition any previous joint commitment in the sector and raises the bar for responsible global agricultural production. We commend Wilmar for its strong new policy, and now is the time for transparent and verifiable implementation."
--
Financial Times | 6 December 2013
Wilmar bows to southeast Asia deforestation concerns on palm oil
By Jeremy Grant in Singapore and Ben Bland in Jakarta
Efforts to rid the food and agribusiness industry of rampant deforestation and human rights abuses took a step forward on Friday when Wilmar International, one of the world’s biggest palm oil companies, committed to “sustainable” sourcing of the commodity.
The Singapore-listed company – which controls 45 per cent of the global production of and trade in palm oil – said it would ensure that both Wilmar’s own plantations and companies from which it sources would only provide products that are “free from links to deforestation or abuse of human rights and local communities”.
That meant not clearing rainforests or the burning of peatland to make way for palm oil plantations.
The move by Wilmar is the culmination of years of lobbying by environmental activists who have battled to stop extensive deforestation in Indonesia and other parts of southeast Asia.
Palm oil companies have been accused of cutting down rainforests and burning ecologically rich peatlands to make way for plantations. Vast tracts of Indonesian rainforest have disappeared as a result, environmentalists say.
Palm oil is a key ingredient in processed food and cosmetics made by companies such as Unilever and Procter & Gamble. It also accounts for about 32 per cent of all vegetable oil consumption, according to Rabobank.
Wilmar is following in the footsteps of palm oil producer Golden Agri-Resources and Asia Pulp & Paper, both controlled by Indonesia’s powerful Widjaja family, which have vowed to stop deforestation in their own and their suppliers’ concession areas.
Wilmar appears to have been prompted to act after it and rivals came under scrutiny in June when smoke from fires on the island of Sumatra, caused by “slash and burn” farming on or near vast palm oil plantations, caused a hazardous haze to blanket much of the region.
At the time, Indonesian officials blamed palm oil companies based in Malaysia and Singapore, with operations in Indonesia. Many rely on third party suppliers of palm oil, who were suspected of illegally burning peat.
Wilmar said its new policy “establishes mechanisms to ensure that both Wilmar’s own plantations and companies from which Wilmar sources will only provide products that are free from links to deforestation or abuse of human rights and local communities”.
“We know from our customers and other stakeholders that there is a strong and rapidly growing demand for traceable, deforestation-free palm oil, and we intend to meet it as a core element of our growth strategy,” said Kuok Khoon Hong, Wilmar’s chairman and chief executive.
Unilever, one of Wilmar’s biggest customers and which uses palm oil in its Dove soap and Flora margarine, last month pledged to buy all its palm oil from “traceable sources” by 2014. Last year it started sourcing all of its palm oil from sustainable sources.
Bustar Maitar, head of the Indonesia forest campaign at Greenpeace International said: “Wilmar’s policy shows that the sector has a massive problem, and while this policy is great news for forests and tigers, its success will be judged by Wilmar’s actions to implement and enforce it.”
While Wilmar’s action comes after years of deforestation, environmentalists said that the practice was still rife.
“Certainly there has been a lot of damage done but many palm oil companies are still doing a lot of damage. Deforestation of peat is happening at an accelerating rate in Borneo, for example,” said Glenn Hurowitz, managing director of Climate Advisers, a consultancy part-funded by the Norwegian government and which worked with Wilmar on the new policy.
Daniel Murdiyarso, principal scientist at the Center for International Forestry Research in Bogor, Indonesia, said moves by plantation companies to stop deforestation on peatland areas in particular would be welcome given that they contain four to five times more carbon than other forest areas.
But Mr Murdiyarso, a former Indonesian deputy environment minister, said it was difficult to evaluate the significance of pledges by companies such as Wilmar and APP, given the lack of reliable concession maps.
Greenpeace activists unfurl a banner challenging Wilmar International to choose forest protection over forest destruction, within Wilmar's PT Agrindo Indah Persad oil palm concession in Jambi, Indonesia. (Photo: Greenpeac)
World's biggest palm oil company pledges to halt deforestation
By Jessica Shankleman
One of the world's largest agri-businesses has pledged to end deforestation throughout its supply chain, in a move that represents a major step forward for companies seeking to source sustainable palm oil, soya beans and sugar.
Wilmar International yesterday signed a deal with consumer goods giant Unilever, which has promised that 100 per cent of the palm oil used in its supply chain would by fully traceable by the end of 2014.
As Wilmar controls 45 per cent of the world's palm oil market, supplying other household brands such as Procter and Gamble, Mondelez and Reckitt Benckiser, it has faced huge pressure from NGOs and businesses to develop more environmentally and socially sustainable practices.
The company has already taken steps to preserve high conservation value (HCV) forests and peatland on its own concessions, although campaigners have been quick to point out that deal covers just a slither of the palm oil it trades.
A report by Greenpeace earlier this year accused Wilmar of trading with companies that deforest areas illegally, set fire to peatland and clear areas known to be used as habitats for tigers.
But the new policy aims to establish mechanisms to help Wilmar monitor activities among its subsidies and third-party suppliers, to ensure it can halt deforestation across the supply chain.
"We believe that the palm oil industry can provide a sustainable and affordable source of vegetable oil to meet rising global demand for responsible products," said Wilmar chairman and chief executive Kuok Khoon Hong, in a statement.
"We can produce palm oil in a way that protects forests, clean air and local communities, all while contributing to development and prosperity in palm oil growing regions. We know from our customers and other stakeholders that there is a strong and rapidly growing demand for traceable, deforestation-free palm oil, and we intend to meet it as a core element of our growth strategy."
Luigi Sigismondi, Unilever's chief supply chain officer, said he was truly impressed by the commitment and urged other suppliers to follow suit.
"Unilever firmly believes that it is only through constructive dialogue and close cooperation that we can lead the transformation of the industry," he said.
"Wilmar, as our strategic partner in palm oil, is clearly committed – with us – to accelerating the much-needed sustainable market transformation and to helping us achieve transparent, traceable and certified palm oil supply chains."
The policies were developed with consultancy The Forest Trust (TFT), which already works with a number of agri-businesses to help them reduce the environmental impact of their operations and supply chains, such as Asia Pulp and Paper as well as consumer facing businesses like Nestle.
TFT executive director Scott Poynton said he expected the new deal to transform the palm oil industry.
"Few companies dominate their sectors the way Wilmar dominates palm oil," he said.
"[This] announcement... dwarfs in ambition any previous joint commitment in the sector and raises the bar for responsible global agricultural production. We commend Wilmar for its strong new policy, and now is the time for transparent and verifiable implementation."
--
Financial Times | 6 December 2013
Wilmar bows to southeast Asia deforestation concerns on palm oil
By Jeremy Grant in Singapore and Ben Bland in Jakarta
Efforts to rid the food and agribusiness industry of rampant deforestation and human rights abuses took a step forward on Friday when Wilmar International, one of the world’s biggest palm oil companies, committed to “sustainable” sourcing of the commodity.
The Singapore-listed company – which controls 45 per cent of the global production of and trade in palm oil – said it would ensure that both Wilmar’s own plantations and companies from which it sources would only provide products that are “free from links to deforestation or abuse of human rights and local communities”.
That meant not clearing rainforests or the burning of peatland to make way for palm oil plantations.
The move by Wilmar is the culmination of years of lobbying by environmental activists who have battled to stop extensive deforestation in Indonesia and other parts of southeast Asia.
Palm oil companies have been accused of cutting down rainforests and burning ecologically rich peatlands to make way for plantations. Vast tracts of Indonesian rainforest have disappeared as a result, environmentalists say.
Palm oil is a key ingredient in processed food and cosmetics made by companies such as Unilever and Procter & Gamble. It also accounts for about 32 per cent of all vegetable oil consumption, according to Rabobank.
Wilmar is following in the footsteps of palm oil producer Golden Agri-Resources and Asia Pulp & Paper, both controlled by Indonesia’s powerful Widjaja family, which have vowed to stop deforestation in their own and their suppliers’ concession areas.
Wilmar appears to have been prompted to act after it and rivals came under scrutiny in June when smoke from fires on the island of Sumatra, caused by “slash and burn” farming on or near vast palm oil plantations, caused a hazardous haze to blanket much of the region.
At the time, Indonesian officials blamed palm oil companies based in Malaysia and Singapore, with operations in Indonesia. Many rely on third party suppliers of palm oil, who were suspected of illegally burning peat.
Wilmar said its new policy “establishes mechanisms to ensure that both Wilmar’s own plantations and companies from which Wilmar sources will only provide products that are free from links to deforestation or abuse of human rights and local communities”.
“We know from our customers and other stakeholders that there is a strong and rapidly growing demand for traceable, deforestation-free palm oil, and we intend to meet it as a core element of our growth strategy,” said Kuok Khoon Hong, Wilmar’s chairman and chief executive.
Unilever, one of Wilmar’s biggest customers and which uses palm oil in its Dove soap and Flora margarine, last month pledged to buy all its palm oil from “traceable sources” by 2014. Last year it started sourcing all of its palm oil from sustainable sources.
Bustar Maitar, head of the Indonesia forest campaign at Greenpeace International said: “Wilmar’s policy shows that the sector has a massive problem, and while this policy is great news for forests and tigers, its success will be judged by Wilmar’s actions to implement and enforce it.”
While Wilmar’s action comes after years of deforestation, environmentalists said that the practice was still rife.
“Certainly there has been a lot of damage done but many palm oil companies are still doing a lot of damage. Deforestation of peat is happening at an accelerating rate in Borneo, for example,” said Glenn Hurowitz, managing director of Climate Advisers, a consultancy part-funded by the Norwegian government and which worked with Wilmar on the new policy.
Daniel Murdiyarso, principal scientist at the Center for International Forestry Research in Bogor, Indonesia, said moves by plantation companies to stop deforestation on peatland areas in particular would be welcome given that they contain four to five times more carbon than other forest areas.
But Mr Murdiyarso, a former Indonesian deputy environment minister, said it was difficult to evaluate the significance of pledges by companies such as Wilmar and APP, given the lack of reliable concession maps.
