Major Companies Using Palm Oil Commit to Addressing Worst Industry Abuses. But is It Enough?
Only continued consumer pressure will ensure that food and cosmetics industries deliver on their promises
In late July, agribusiness giant Cargill announced a sweeping set of changes to the company’s palm oil policies, promising a commitment to “build a traceable and transparent palm oil supply chain” to “end egregious practices such as deforestation, expansion onto peatlands, and the exploitation of Indigenous peoples, workers, and local communities.”
Taken together with recent moves from other industry giants like Wilmar and Golden-Agri Resources, it means that companies responsible for more than half of global palm oil trading have now made public commitments to address the rampant environmental and human rights abuses associated with palm oil production. Traders are joined by well-known consumer brands like Nestlé, Unilever, General Mills, Mondelēz, Kellogg, Safeway, Hershey, Mars, L’Oreal, and Proctor & Gamble.
The need for reform cannot be overstated.
Its high yield compared to other oils makes palm oil a cheap alternative for companies looking to manage costs. As a result, production of palm oil has doubled since 2000, making it the most widely traded vegetable oil in the world. Though many consumers are unaware of its presence, palm oil is found in over half the products on grocery store shelves in the United States, in everything from Snickers bars to shampoos.
This popular oil carries a nasty price, though: widespread use of forced and child labor, land grabs, destruction of habitat for endangered species like orangutans and elephants, not to mention the long term impact on climate change. When old growth rainforests are cut down to plant palm, sequestered carbon is released. Tropical deforestation accounts for 10 percent of global carbon emissions. Palm oil is a main driver of tropical deforestation. In short: palm oil production is bad for the planet, people, and animals. (Generally speaking, if you’re eating it in a candy bar or potato chips, it’s bad for you, too).
The announcement to make good from one of the largest players in the business is positive news, to be sure. It’s a sign that years of pressure from consumers and activists are finally yielding fruit. But don’t break out the celebratory candy bar just yet.
A closer look at the Cargill sustainability plan reveals a few critical gaps. To begin with, it doesn’t mention how and when the plan will be implemented. Timetables are a critical element of any good plan. When competitor Wilmar International announced a plan for supply chain improvements, it came with a deadline: December 31, 2015. Cargill’s announcement has no such date. Further, the details of how these grand aspirations are to be achieved are left vague. Anyone who has ever “planned” to write a novel one day can attest to the relative futility of a strategy lacking detailed steps and a firm end date.
“We are confident that our timeline will be aggressive and help meet our customer’s needs. However, it was important that we utilized a High Carbon Stock study on our own operations first and began work on building a traceable supply chain, before we made public commitments,” said a Cargill spokesperson in response to questions about the lack of timetable.
So, that’s Cargill. Then, there’s the rest of the industry to consider. Traders like Kuala Lumpur Kepong (KLK), a company notorious for human rights abuses and environmental devastation, and IOI Group, have so far failed to put in place safeguards. These major industry players released a “Sustainable Palm Oil Manifesto” in June of this year in an attempt to mollify concerns about ongoing abuses. The shortcomings for the manifesto were many, including a lack of timetable and a mechanism for independent third party verification. And in a move common to many manifesto-writers, the industry is laboring mightily to redefine reality.
“They’re trying to come up with their own standard… trying to redefine what constitutes a forest. There already is an existing definition of high carbon stock forest,” said Gemma Tillack, senior agribusiness campaigner at Rainforest Action Network.
photo by Rainforest Action Network, on Flickr
And while packaged goods tend to have stronger palm oil practices than any other industry segment, many of the brands familiar to US consumers, including Campbell Foods, Kraft, and Heinz, have a long way to go towards sourcing sustainable palm oil. The purveyors of most of these snacks of dubious nutritional value have some ground to cover.
The biggest of them all – PepsiCo – lags woefully behind. PepsiCo uses 450,000 metric tons of palm oil annually in products like Quaker health bars, Frito Lays chips, and cookies. The company recently updated standards, but the cosmetic improvements do little to address the greatest concerns in palm oil supply chain. Without getting too wonky, the key issue is traceability and the lack thereof. Basically, without a clearly traceable supply chain, there’s no way for PepsiCo to assert with any certainty that those Flaming Hot Cheetos weren’t made from conflict palm oil.
PepsiCo’s market share, as well as its inadequate standards, is the reason the behemoth is currently being publicly pressured by activist organizations like the Rainforest Action Network and Greenpeace International.
Personal care companies haven’t made the same level of commitment as the packaged goods sector. While L’Oreal has made firm commitments to preventing deforestation and supply chain transparency, Estée Lauder, Avon, and Clorox (maker of Burt’s Bees) lack these basic preventative measures.
The entire fast food industry (hardly a cottage industry with over $191 billion in annual sales in the US) is terrible when it comes to palm oil use. In March of 2014, the Union of Concerned Scientists released a scorecard grading companies on a 100 point score incorporating deforestation, supply chain transparency, and supply chain traceability. Of the 10 fast food companies examined, only two – Subway and MacDonald’s – were able get any points. And even those two were on the lower end of the 100-point scale, with Subway topping out at a whopping 31 points. Yum! Taco Bell, KFC, Wendy’s, Dairy Queen, and Burger King – all received 0 out of 100 points.
However, in all the three major market sectors that use palm oil – packaged goods, personal care, and fast food – the overall trend is towards greater supply chain traceability, greater commitment to preventing deforestation, stronger human rights safeguards. But it should be noted that all of the progress is not the result of spontaneous altruism on the part of multinational corporations.
“It’s really important for the general public to really recognize how much this change is due to consumer pressure, and how much power they have to make a difference,” said Calen May-Tobin, Lead Analyst Tropical Forest and Climate Initiative for the Union of Concerned Scientists. “These are products that even if you don’t recognize it, you use it everyday. Companies really listen to their consumers – they have a lot of power over what a company does.”
The palm oil industry is changing, that much is clear. Whether the changes go far enough to prevent the worst abuses will be up to shampoo and snack food buyers of the world.