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Malaysia: What's The Real Deal With Palm Oil?

Palm oil has become the target of criticism from environmentalists and green activists in recent years. In fact, just this year Nestle, Marks & Spencer's and General Mills have reacted to their use of palm oil, either dropping suppliers who are allegedly non-sustainable suppliers, or else reinforcing their stance against the destruction of primary rain forests and biodiversity hubs in South East Asia.

The controversy surrounding palm oil, a source of agricultural revenue for many South East Asian countries, especially Malaysia and Indonesia, arose recently when a video surfaced on Youtube, parodying Nestle's KitKat advertisement. The video, by Greenpeace, has an office-worker opening a KitKat to “take a break”, but biting into what appears to be an orangutan's finger, rather than a chocolate wafer finger. The video, below, is part of the environmental group's campaign against Nestle's use of palm oil from unsustainable operations in Indonesia.

As what can be seen a result of this video, Nestle has now announced that they will cease buying palm oil from, Sinar Mas, an Indonesian supplier of Palm Oil. Team Orangutan reports:

Considering the amount of palm oil Nestle places in their products, it will be tough for them to get that amount from palm oil plantations that use sustainable practices.

Sustainable palm oil just doesn't exist. The land used for sustainable palm oil is limited. There is no way to supply the demand without destroying the rainforest. That is why we need to encourage companies to find alternative oils. The problem won't stop until companies replace or eliminate palm oil from their products.

While Nestle's decision is a temporary victory, we need to take it as encouragement that we can help change the situation and we can make a difference in our world.

Palm fruit, photo courtesy of Scott Parker

Palm fruit, photo courtesy of Scott Parker

On a larger scale, Team Orangutan alarmingly states:

Indonesian officials have said they aim to more than double the country's crude palm oil output to 40 million tonnes by 2020 through increased yields and more plantations.

Rainforest destruction in Indonesia make it one of the biggest emitters of greenhouse gases in the world. It also kills hundreds of orangutans every day.

Palm oil is an unnecessary oil. We need to keep educating, and keep making an effort.

We can do this together. Together, we can protect the orangutans from genocide.

As a backgrounder on palm oil, at least in Malaysia, the Malaysian Agriculture blog, quoting a piece by Ahmad Ibrahim from the New Straits Times, stated:

Just a year ago, palm oil was on Cloud Nine. It was the toast of the country’s economy. The price of crude palm oil (CPO) breached the RM4,000 mark to touch RM4,312 a tone on March 3, last year. Price stayed above RM3,000 for about seven months, an all-time record.

Palm oil companies were dishing out big fat bonuses for their employees. Many were declaring handsome dividends for their investors. Oil palm smallholders were enjoying lucrative returns. Nobody then thought that palm oil prices would ever drop to unprofitable levels. Most in the industry were convinced that the palm oil price would never again dip below RM2,000 a tone.

That just demonstrated the overwhelming confidence many had in the palm oil industry.

Events of recent weeks have shattered that confidence. On Oct 24, last year, palm oil prices slumped to a low of RM1,390 per tonne, a massive drop from RM4,000.

Perhaps part of this slowdown in the palm oil industry is evidenced by an investigative piece of journalism, by Martin Hickman, entitled ‘The guilty secrets of palm oil: Are you unwittingly contributing to the devastation of the rain forests?’, on how palm oil is destroying virgin rainforest and threatening the survival of the endangered orangutans, among others, in Malaysia and Indonesia being awarded the ‘Environment Story of the Year’ by Foreign Press Association’s Media Awards.

The piece stated:

In its own way, palm oil is a wonder plant. Astonishingly productive, its annual yield is 3.6 tonnes a hectare compared with half a tonne for soy or rapeseed. Originally found in West Africa, palm oil is uniquely “fractionable” when cooked, meaning its properties can be easily separated for different products. Although high in artery-clogging saturated fat, it is healthier than hydrogenated fats. For manufacturers, there is another significant benefit. At £400 a tonne, it is cheaper than soy, rapeseed or sunflower.

Indonesia is trying to crack down on illegal foresting, but corruption is rife hundreds of miles from Jakarta. Satellite pictures show logging has encroached on 90 per cent of Borneo's national parks – and according to the United Nations Environment Programme (UNEP): “New estimates suggest 98 per cent of [Indonesia's] forest may be destroyed by 2022, the lowland forest much sooner.”

Considering the multi-use of the plant, palm oil has been a major agricultural focus in the region. Interestingly, Palmoiltruthfoundation provides a counter argument to the above, at least in the context of Malaysia:

Almost all oil palm expansion in Malaysia is pursued through the conversion of existing rubber, cocoa and coconut plantations or from logged over forest areas which have been earmarked for agriculture. Moreover, out of the total land area of 30.2 million hectares, only 6 million hectares have been designated for agriculture under the Third Malaysia Agricultural Plan. Oil palm cultivation falls well within the area zoned for agriculture. Ironically, the area still under forest cover remains at well over 60 %, certainly much higher than that of the developed nations from which all this brouhaha over Orang Utan habitats are originating.

It is about time that the world wakes up to such insidious and deceptive campaigns and that can only be achieved when the world develops the discernment to see through the veil and stop being lembus [cows]. That may be counter-intuitive but the herd instinct can only be overcome through education and clear branding and communication programs. Programs that will, ultimately, expose the lies and half-truths that appear to be the penchant and almost exclusive purview of CSPI and others of their ilk.

In addition, Tan Sri Yusof Basiron Malaysian Palm Oil Council CEO answered several questions on sustainable and green palm oil practices in the Malaysian Star newspaper, responding to a question on forest conservation:

There is legitimate concern over the protection of biodiversity of the jungles and natural forests. This is achieved by setting aside properly designed areas for conservation. It is not necessary to conserve all jungle. Parties to the United Nations Convention on Biodiversity decided many years ago that 10% of the world’s forests needed to be reserved to preserve forest biodiversity. In Malaysia, more than 50% of the country has been set aside for that purpose – the average in Europe is 25% – in a commitment we made at the 1992 Rio Earth Summit.

Perhaps one of the biggest concerns about palm oil is the paradox of the destruction of forests by businesses in the palm oil supply chain, on the one hand, and their ‘corporate social responsibility’ initiatives, on the other. For example, according to the Rainforest Action Network blog:

General Mills, a company recognized for its CSR [corporate social responsibility] record the very same month that its head of sustainable development refuses to even have a conversation with RAN [Rainforest Action Network] about their palm oil policy, is clearly not that committed to “sustainability.”

In the world of Corporate Social Responsibility, the past two weeks have been an exciting time for companies like General Mills, receiving awards such as ‘Top Corporate Citizen,’ ranking 47th in the world’s 50 ‘Most Admired Companies’ and 29th on the ‘Diversity List.’ These awards recognize the company’s strong global reputation – at least according to Fortune Magazine and global business leaders.

But what this small group of decision makers doesn’t know is that millions of Indigenous peoples, endangered species and forests are at risk from palm oil expansion in Indonesia – thanks to General Mills.

It doesn't help that certain initiatives to assist in cleaning up the industry are now being accused of a form of ‘greenwashing'. According to the Canadians For Climate Change Action blog:

Environmentalists argue that what began as an initiative to clean up dirty palm oil production practices, the Roundtable on Sustainable Palm Oil has become little more than an NGO-endorsed greenwashing tool. Rebecca Zhou, of Reportage/enviro reports.

The Roundtable on Sustainable Palm Oil (RSPO) was set up by the World Wildlife Fund (WWF) to involve companies in creating more sustainable ways of producing palm oil. However environmental experts believe that not only is the RSPO ineffective, it has become a way to green wash poor practices.

“The RSPO gives the companies a green front and encourages more consumption, which is precisely the cause of the problem,” said Valerie Phillips, forest campaigner of the Greenpeace branch in Papua New Guinea, one of the three countries most adversely affected by the palm oil industry.

In fact, the Rainforest Portal reports that an open Letter, signed by more than 80 organizations from 31 countries, was delivered in November 2009 to the Roundtable on Sustainable Palm Oil (RSPO) and to the World Wildlife Fund (WWF), one of the founders of the RSPO. The letter urged the parties to stop ‘greenwashing’ and to stop certification of palm oil plantations as being ‘sustainable’ if they weren't. The portal states:

According to the Open Letter, palm oil companies certified by the RSPO are directly responsible for much social and environmental damage: dislocation of local populations’ livelihoods, destruction of rainforests and peat lands, pollution of soils and water, and contribution to global warming. These are the reasons why “palm oil monoculture[s] are not and can never be sustainable and ‘certification’ serves as a means of perpetuating and expanding this destructive industry”

Aside from these negative developments, more efforts are being made to achieve ‘responsible palm oil'. For example, the Forest Trust (TFT), an international nonprofit body, is defining a responsible palm oil purchasing policy for European retailers. TFT's website states that it is aware of criticisms of the RPSO scheme, and as such it is working to set up a group of food manufacturers with the aim of: establishing monitoring and traceability systems to ensure plantations are complying with strict RSPO requirements; and, providing technical assistance to growers, particularly smallholders achieving RSPO certification.

At the end of the day, however, Peak Oil neatly sums up:

Palm oil plantations play a major role in the growing problems of deforestation and greenhouse gas emissions in Indonesia and tropical woodlands around the world. Last week's gathering of the International Conference on Oil Palm and Environment (ICOPE) is one move toward making the industry part of the solution.
Whether the palm oil industry can, in fact, be part of the solution to deforestation is a proposition that divides palm oil producers, manufacturers, retailers, and, naturally, environmental groups. At one extreme, sustainable palm oil production is considered an oxymoron. The opposite fringe sees critics of palm oil as dupes of a developed-world plot against poor farmers, built on myths of species extinction and climate change, funded by palm's rival oil and fat producers.

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