It's in our candy bars, soap and peanut butter — it even powers some of our cars. Yet it is precisely this high demand that makes palm oil one of the most controversial commodities on the market today. The rapid expansion of monoculture palm oil plantations — especially in Southeast Asia — has led to the continuing destruction of the world's remaining tropical forests.
"As the world's population grows, global demand for vegetable oils will grow as well. Palm oil isn't going away — we can either stand on the sidelines and watch, or get in the game and make it better."
– Conrad Savy, CI scientist and member of the Roundtable for Sustainable Palm Oil secretariat
But like it or not, palm oil appears to be here to stay. "Palm oil is being consumed by all of us every day, in shampoo, cosmetics, potato chips. It's a fact of life," says Dr. Tim Killeen, a senior research scientist at Conservation International (CI). "And because it's a labor-intensive crop, it also provides work for millions of people worldwide." Killeen represents CI on the executive board of the Roundtable for Sustainable Palm Oil (RSPO), a multi-stakeholder forum that in the past few years has compelled many giants of the palm oil industry to make dramatic changes in their production practices.
Conrad Savy, a senior science advisor for business engagement for CI, also has been serving within the RSPO Secretariat. "As the world's population grows, global demand for vegetable oils will grow as well," he says. "Palm oil isn't going away — we can either stand on the sidelines and watch, or get in the game and make it better."
The destruction of forests for palm oil production poses a major threat to orangutan populations in Indonesia and Malaysia. As part of the RSPO’s certification process, member companies must refrain from clearing primary forest for their activities.
Photo: © CI/Photo by Christine Dragisic
Palm Oil + Ecosystem Destruction
Native to West Africa, oil palm is now grown on plantations across the tropical world. The vast majority of these plantations are in Indonesia and Malaysia, where they provide at least 1.5 million jobs — and palm oil also is expanding as a crop in countries like Brazil, Liberia, Thailand and Colombia. One reason the crop has proliferated so quickly across the globe is its productivity; one hectare of land can produce up to four tons of palm oil, as opposed to one ton of vegetable oil per hectare from soybeans.
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Palm oil currently represents 35 percent of the global vegetable oil market, and production is expected to double in the next 40 years. Much of this expansion will be in tropical rainforest areas, where monoculture tree plantations already have caused massive damage to wildlife habitats, including those of dwindling orangutan (Pongo borneo) populations in Borneo. In Southeast Asia, the expansion of plantations on poorly-drained peat swamps is particularly worrisome, because the conversion of those unique and important ecosystems leads to massive greenhouse gas emissions and the loss of key ecosystem services — such as freshwater supply — provided by these coastal wetlands.
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What RSPO Does
Initiated in 2002, RSPO has more than 500 members along the palm oil supply chain, including growers, processors, consumer products manufacturers, retailers and financial service providers, as well as environmental and social organizations from civil society. By joining the association, growers pledge to improve the sustainability of their operations over time by adopting the RSPO Principles & Criteria. RSPO certification requires companies to follow guidelines that include conducting environmental impact statements, engaging local communities and refraining from clearing primary forest.
Together with the World Wide Fund for Nature (WWF), CI represents the environmental sector on the RSPO's executive board. Tim Killeen chairs the greenhouse gas working group, which is developing standards to reduce greenhouse gas emissions from the palm oil supply chain, including those from land-use change and the draining of peat swamps. Conrad Savy serves on the Biodiversity & High Conservation Value (HCV) area technical committee, a group that brings together scientists and plantation managers to promote spatial planning practices that conserve biodiversity, ecosystem services and cultural resources on human-altered landscapes.
Not only are sustainable palm oil practices good for biodiversity, healthy ecosystems and community development, but the reverse is also true. The RSPO Principles & Criteria are based on the concepts of best practices, which include commitments to efficiency, fair labor practices, good neighbor policies and environmental management that will, ultimately, improve the bottom lines of palm oil enterprises.
There is also a movement to expand the palm oil supply chain into the smallholder landscape. Many corporate estates are surrounded by smallholders, and in many countries corporations are obligated to purchase their crops. The RSPO is seeking to improve both the environmental performance of these smallholders and improve their yield, which is typically only 50 percent the rate of corporate plantations where capital and technology maximize productivity. According to Killeen, "Every acre of smallholder production can replace an acre of deforestation, and there are millions of hectares of previously deforested landscapes in Indonesia and other tropical countries around the world."
Native to West Africa, oil palm is now grown on plantations across the tropical world. Palm oil currently represents 35 percent of the global vegetable oil market, and production is expected to double in the next 40 years.
Photo: © CI/Photo by Christine Dragisic
Successes and Challenges
Although the RSPO has only been certifying sustainable palm oil since 2008, in that short time it has already grown to represent 8 percent of the global market. The RSPO now includes many of the world's biggest buyers of palm oil, such as Unilever — the company behind brands like Vaseline, Lipton and Dove — which has committed to using 100 percent certified sustainable palm oil by 2015.
In addition to the environmental benefits, sustainable palm oil has important social impacts as well. The industry has the potential to lift subsistence farmers out of poverty, representing an attractive development opportunity for many developing countries. According to Killeen, the challenge comes from the nature and complexity of smallholder landscapes. "Typically, these farmers don't hold clear legal title, which limits their ability to access credit. Some small farmers are reluctant to try new crops, either because they don't understand them or because they simply don't have a decent road to take their produce to a mill." Investing in smallholders is less profitable and loaded with risk — factors which have motivated companies to avoid smallholder production schemes in the past. The members of the RSPO hope to change this economic logic.
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In the future, CI hopes to link investments in the palm oil sector with revenues that might flow from the global climate change agreement known as REDD (Reducing Emissions from Deforestation and forest Degradation). Although most large corporate land holdings have been heavily logged, many of them still have significant stands of native forest, which could provide substantial REDD revenues for their owners.
Despite challenges — and because of the opportunities that stand behind the challenges — there is ample reason to be optimistic. "Even a few years ago, the participation of these major companies in the RSPO would have been unheard of," says Savy. "Now, they're listening and, more importantly, beginning to act."