Palm Oil: Secrecy Threatens the Rain Forest

By Erik Hagen
Photo: Daniel Beltrá/Greenpeace.
English translation of this article was published on 4 April 2011.

Constantly greater areas of untouched rain forest have to give way to the expanding palm-oil industry in Southeast Asia. The felling threatens the indigenous population, local society, irreplaceable biodiversity and the planet’s climate. The Future in Our Hands has visited Indonesia and seen with its own eyes the result of the palm-oil companies’ ravaging.

The palm oil from Asia may be found on labels in Norway – often referred to as “vegetable oil” – in everything from gratins to candy and crisps. From 10% to 50% of goods on store shelves contain palm oil. Eleven thousand tonnes of palm oil find their way into Norway every year, and a total of 64% ends up at Mills of Norway.

But it is difficult to be certain about exactly how the fate of the rain forest in Asia is connected to the store shelves in Norway, because all the companies involved are keeping silent about their trade links. Behind most of the deliveries to Norway is the Swedish importer AAK, which refuses to disclose the names of 486 of its 487 suppliers.

No Candour
Western buyers believe they have nothing to worry about and say they demand that the producers do not destroy forest or demolish the environment to cultivate the oil. Most of the palm-oil companies have therefore willingly joined the organization Roundtable on Sustainable Palm Oil (RSPO), which obliges the companies to operate sustainably. Nevertheless, the organization is not so waterproof as to prevent several strongly criticised companies, with a history of tearing down the rain forest, from becoming members.

By certifying the oil through RSPO, buyers in Norway can state that the oil they import is from sustainable plantations.

“We do not buy directly from the plantations ourselves but feel certain that our Swedish supplier has a bona fide selection of producers. All the producers must be members of RSPO, and we are confident that our supplier follows this up,” according to Paul Aitkenhead of Mills, which utilises the oil in its margarines.

Mills is by far the largest buyer of palm oil in Norway. Of the 11,000 tonnes palm oil that Norway imported in 2010, 7000 went to Mills. By comparison, Nortura bought ca 350 tonnes, and Norgesmøllene ca 600 tonnes.

The Norwegian food producers with which The Future in Our Hands has been in touch receive their palm oil from the same importer – the Swedish concern AAK. The Norwegian companies all refer to AAK with regard to queries about which plantations and suppliers in Southeast Asia produce the palm oil. But AAK does not wish to reveal whom they utilise.

“Unfortunately, because of competition we can not state which refineries and plantations we utilise. It may be a matter of several hundred small and large plantations,” Bo Svensson of AAK wrote to The Future in Our Hands.

Findus of Norway even refuses to explain which importer it uses when it buys its palm oil.

Read also: Findus Also Uses Silent Palm-Oil Supplies

Expansion
A report on social responsibility published recently by AAK explained that the Swedish company utilises 487 suppliers. Of these 487 suppliers the company has made public the name of only one. The secrecy with regard to the supply list caused the ethical investor Banco last year to divest AAK from its portfolios.

The only plantation company that AAK has admitted that it imports from is the Malaysian United Plantations. These two firms have collaborated for several years and have the same main shareholder. But even this company has received environmental criticism.

So far, United Plantations has produced exclusively at plantations in Malaysia, but in 2007 the company expanded to Indonesia. The supplier’s new acquisition contains 40,000 hectares.

“Our evidence shows that dense forest has recently been felled by the company,” Greenpeace wrote in the report “United Plantations Certified despite Gross Violations of RSPO Standards” and referred to photographs taken inside the plantation. According to a UN report made only 3 years before United Plantations took over the property, there were supposed to be potential orang-utan habitats on the property.

Moreover, some of the areas that were not already forest were being used by villagers when United Plantations moved in. Some of the villagers landed in prison when they resisted the takeover of their property,” according to Greenpeace. When they were released from prison, United Plantations had already transformed their properties into a plantation.

In a few years these new plantations may also be stamped as sustainable, to the satisfaction of the Western importer. This happens simultaneously with the company being given certificates by the RSPO organization for being sustainable in Malaya.

The Future in Our Hands is critical of the secrecy in the industry.

“The promises of responsibility in the industry are not worth much as long as the companies do not state where the palm oil comes from,” Arild Hermstad, leader of The Future in Our Hands, stated.

He is strongly critical of the fact that Norwegian food producers are not putting pressure on their suppliers to obtain the names of the plantation companies utilised.

“The food companies in Norway have a responsibility they can not run away from,” Hermstad said.

Denies Damages
The Malaysian company United Plantations denies assertions that they are supposed to have damaged forest or have been in conflict with the local population.

“Most of the property United Plantations bought has been logged several times in the past”, wrote in an e-mail to The Future in Our Hands. They claim that they had not cleared either primary forest or high conservation value forest and had preserved 65% of all the secondary forest on the property.

The criticism from Greenpeace that they were supposed to have converted potential orang-utan habitats to plantation they call misinterpretation of data. The UN investigation was
“a desk exercise primarily aimed at gaining overview of mega and sub-populations of orang-utans on Borneo rather than being accurate. Some potential habitats are situated in the middle of padi-fields and villages”, the company wrote.

They also disagree with regard to the course of events leading to the arrest of a person who lived in the area. “He was not jailed for protesting, but for slicing another person on the head,” United Plantations wrote, and emphasised that they fulfil the same strict demands in Indonesia as they do in Malaysia. Download the company’s complete answers to The Future in Our Hands’ questions here.   

Except for United Plantations, nothing is known about the identity of the other 486 suppliers that AAK utilises. The Future in Our Hands has tracked down two further reports in which possible suppliers are named but has not yet been able corroborate this. AAK refuses to import from both of these. The two suppliers are Golden-Agri Resources (which Golden-Agri itself asserted in an investor report in 2009) and the Indonesian refinery PT Bukit Kapur Reksa (as claimed in a report from three European environmental organizations in 2005).