World's largest palm oil trader's deforestation claims questioned 
The world’s largest palm oil trader, Singapore-headquartered Wilmar, which controls 45% of global palm oil trade, says it has made “significant progress” towards eliminating deforestation, exploitation and peat land development from its supply chain. However, campaigners and industry experts say the company is yet to prove that its suppliers are not responsible for clearing forests or abusing human rights. Wilmar’s 2013 commitment was a response to NGO campaigns and an announcement by Unilever – the world’s largest purcser of palm oil – that it would be tracking its supply chain to end its role in deforestation. Environmental non-profit CDP points out that suppliers and buyers of key agricultural forest-risk commodities, including palm oil and soy, are coming under growing pressure to ensure their supply chains do not destroy forests. 

The world’s largest palm oil processor and trader used the Davos gathering of business leaders as an opportunity to talk up progress on its efforts to tackle deforestation in the palm oil sector.

Singapore-headquartered Wilmar says it has made “significant progress” on a commitment it made two years ago to eliminate deforestation, exploitation and peatland development from its supply chain. This includes publishing a list of crude palm oil mill sources that supply its refineries, enabling greater transparency along the company’s supply chain.

However, campaigners and industry experts say the company is yet to prove that its suppliers are not responsible for clearing forests or abusing human rights.

Glenn Hurowitz, senior fellow at the Centre for International Policy, who wrote an introductory commentary for Wilmar’s progress report, told the Guardian that being able to measure progress is key: “Among the large agribusiness companies, Wilmar is leading the way in many areas, from supplier engagement to transparency to rapidly responding to grievances filed by civil society ... But no company is providing comprehensive information about whether [its suppliers] are clearing forests or abusing human rights – the metrics that really matter.”

Even Wilmar’s chief sustainability officer Jeremy Goon points out that “much remains to be done, including the development of a clear means to measure and track the progress of sustainability commitments to assess its effectiveness in reducing actual deforestation”.

The key sticking point according to NGOs such as Greenpeace and the Forest Peoples Programme is that Wilmar, which controls 45% of global palm oil trade, cannot prove that its suppliers are not responsible for ongoing deforestation. The palm oil supply chain is notoriously complex and lacking in transparency, but Greenpeace Indonesia campaigner Annisa Rahmawati believes the company should be making better progress on its commitments.

“Wilmar promised that by the end of 2015 it would be able to show its palm oil suppliers were not destroying forests, developing on peatlands and were respecting human rights of communities and workers. This was the cornerstone of its policy, but now the company talks only of ‘aspirations’. That is simply not good enough,” says Rahmawati.

Continued external pressure

Wilmar’s 2013 commitment was a bold move but it didn’t happen without considerable pressure from what environment author and journalist Fred Pearce describes as “strenuous NGO campaigns” and an announcement by Unilever – one of Wilmar’s customers and the world’s largest purchaser of palm oil in 2012 – that it would be tracking its entire supply chain to ensure it met its promise to end its role in deforestation.

It’s this same pressure that environmental non-profit CDP believes will help companies realise their no deforestation pledges. In its latest report CDP points out that suppliers and buyers of key agricultural forest-risk commodities, including palm oil and soy, are coming under growing pressure to ensure their supply chains do not destroy forests. “That pressure is building from their consumers and their investors,” says CDP. In 2015, 298 investors with $19tn (£13.3tn) in assets under management requested that companies report data about forest risks through CDP, a 24% jump from the previous year.

Hurowitz adds that Wilmar and other companies need to be absolutely clear to their suppliers that if they engage in deforestation or human rights abuses, they will lose access to global markets. “There’s been altogether too much ambiguity about consequences, which has only encouraged some rogue actors to think they can deforest first and apologise later,” he says.

So what will help end the ongoing land grab claims and forest fires that engulfed south-east Asia towards the end of last year? Hurowitz believes that governments must step up and take deforestation seriously, although this doesn’t give companies carte blanche to carry on business as usual.

“For the sake of their own commercial interests, the leading companies need to do more to make clear to governments that effective law enforcement is essential if the palm oil industry is to restore its damaged reputation. To accelerate progress and prevent another haze crisis, companies should join with civil society to support government efforts to hold anyone who destroys forests and peatlands legally accountable.”

Both Hurowitz and Rahmawati cite the example of the soy moratorium in Brazil, which brought companies, government and NGOs together to prevent deforestation of the Amazon. “By working together, traders like Wilmar were able to help eradicate forest destruction for soya in the Brazilian Amazon,” says Rahmawati.