The Palm Scribe

Watchdog: Big Companies Must Ensure Sustainability of Their Palm Oil Supply

Big companies in the palm oil sector are entirely responsible in making sure that their palm oil supply, especially from independent farmers, is legal and produced in a sustainable way, environmental watchdog Eyes on the Forest (EoF) said.


In a report entitled “Enough is Enough” released last month, EoF said that it found Indonesia’s top four palm oil producers, better known as the “Big 4” – GAR, Musim Mas, RGE, and Wilmar – had purchased, often repeatedly, from mills that have been flagged as having often dealt in illegal palm oil.

“Large companies such as the Big 4 must have strong filters up to plantation level so that their supply of FFB (Fresh Fruit Bunch) can be traceable from this early phase and avoid getting supplies that are illegals or unsustainable,” Afdhal Mahyudin, who spoke representing EoF, told The Palm Scribe.

He also said that companies should strive to minimize the role of independent agents, agents whom he said tended to take any supply of FFB without a strong screening process to weed out illegal and unsustainable supplies.

“Firm actions against certain independent agents need to be applied because EoF sees that the big supply demand from the Big 4 is making these things (sustainability of supply) ignored,” Mahyuddin added.

The EoF reports said that Big 4 companies relied heavily on external suppliers to fill the demand of their processing and trading facilities, as current refining capacities exceeded the FFB and Crude Palm Oil volumes that comply with government regulations and with the company’s own zero deforestation policies.

Besides agents, companies also often bought from independent mills that accepted supplies from the agents.

“The majority of the world’s palm oil supplies may thus be tainted by FFB illegally grown in some of the last remaining habitats of critically endangered species like tigers, elephants, and orangutan and on flammable, carbon-rich peatlands in Sumatra,” Eof said in its report.

Only strict identification and segregation at the source of FFB from unknown third parties, often traded by agents, can reduce the contamination.

Mahyuddin said that buyers should not penalize the big palm oil companies by boycotting their products but instead should exert pressure on them and the other suppliers to meet the sustainability criteria for their supply.

“Pressure on the Big 4 can be on the implementation of their sustainable palm oil commitment, and this must be transparent, the progress they have achieved should be reported to buyers and the RSPO as the institution deemed credible,” Mahyuddin said.

He was referring to the Roundtable on Sustainable Palm Oil (RSPO) which was established in 2004 with the objective of promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders.

Mahyuddin also said that civil society organizations could also help by monitoring the progress and phases achieved by the Big 4 in meeting their commitments.

“The possibility of a boycott remains but it would be much better if both sides seek a solution, including through tight monitoring by civil society organizations, including EoF,” he said.

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