Bid to Make 'Green' Palm Oil Advances

Liz Gooch, The New York Times 9 Sep 09;

KUALA LUMPUR — Idyllic scenes of palm trees swaying in the breeze over sandy beaches have long decorated brochures designed to lure tourists to Indonesia and Malaysia. But few visitors see the giant palm plantations away from the shore.

Each year, the farms produce millions of tons of palm oil, which has soared in popularity since the 1970s and is now found in foods like margarine, potato chips and chocolate, as well as in soap, cosmetics and biofuel. Palm produces more oil per hectare than other oil crops, making it a cheaper alternative.

With these two Southeast Asian nations leading the way, the industry churned out about 43 million tons last year, making palm oil the world’s most produced vegetable oil, according to estimates by Oil World, an independent industry analyst group.

Now, though, the palm plantations are in the cross hairs of consumer groups and corporations in Australia, New Zealand, Europe and the United States. Echoing the longstanding concerns of environmental groups, they say palm-oil producers continue to fell large tracts of forest to make way for plantations, destroying habitat for endangered species like the orangutan.

In Malaysia, the land devoted to palm-oil plantations increased to 4.48 million hectares in 2008, or 11.1 million acres, from about 641,700 hectares in 1975, according to the Malaysian Palm Oil Board. Reports suggest that Indonesia has about 6 million hectares under cultivation.

Last year, the British cosmetics company Lush introduced a soap made from a base free of palm oil. Last month, Cadbury New Zealand bowed to consumer pressure and reversed a decision to replace cocoa butter with palm oil in its chocolates. And the Melbourne Zoo began a campaign to have palm oil clearly labeled on food products to ensure that consumers know what they are buying.

The increasingly vocal protests are not what the industry expected five years after it began developing a certification system for producing environmentally sustainable palm oil. In 2004, the Roundtable on Sustainable Palm Oil formed, representing palm-oil producers; consumer goods manufacturers including Unilever, Johnson & Johnson and Kellogg; environmental groups like the World Wide Fund for Nature; and social and development organizations.

Membership in the roundtable is voluntary, and producers must meet its criteria before their oil can be certified as sustainable. The group’s secretary general, Vengeta Rao, said new plantations could not be established on primary rainforest or lands with “high conservation values” like those with rare or endangered species.

“If the land was cleared before November 2005, irrespective of who logged it or cleared it, any plantation on that land can be certified to produce sustainable oil, provided there are no land conflicts over that land and the company has not broken any laws in establishing the plantation,” said Dr. Rao, a plant biologist. “But if planting was done after November 2005, it can only be certified if the company has done a conservation study and found that there are no conservation values present.”

The roundtable requires plantations to develop plans to protect any rare or endangered species found on their land and to assess whether there are cultural relics of indigenous people that need to be preserved.

About 700,000 tons of certified oil has been produced since the first company, United Plantations in Malaysia, was certified a year ago. Dr. Rao said that by 2015, about 10 million to 15 million tons could be certified, or perhaps a quarter of the total. As for criticism that only a small volume has been certified, he said, “that is really because it’s an extremely stringent process.”

Once a company registers one plantation or mill for certification, it must create a timetable to convert all of its operations. Consumer goods manufacturers who join the roundtable must also devise a timetable for switching to certified oil.

Dr. Rao said the roundtable did not dictate timetables to its members “because circumstances vary between producers.”

Some critics say the standards are not stringent enough to prevent further deforestation.

“The expansion of plantations has pushed the orangutan to the brink of extinction, with some experts predicting total extinction within 10 years,” said James Turner, a spokesman for the British branch of Greenpeace. A United Nations reportin 2007 found that “the rapid increase of plantation acreage is one of the greatest threats to orangutans.”

Greenpeace says the industry also contributes to carbon emissions when producers establish new plantations on peat bogs, which store carbon. Draining and burning peat bogs to establish plantations releases greenhouse gases.

Dr. Rao said although the roundtable’s guidelines did not allow extensive planting on peat bogs, limited planting was permitted in some circumstances, depending on factors like the type of peat and its depth. However, he said, this was being reviewed in the case of new plantings.

Such concerns prompted Lush to formulate its new soap, which went on sale last month in the United States. The company says it wants to eliminate palm oil from its products completely but is struggling to find suppliers who can provide such materials for ingredients other than the soap base.

Meanwhile, the Melbourne Zoo collected 5,000 signatures in the first week of a yearlong campaign to pressure Australia’s food regulators to require the explicit labeling of palm oil, which can now be listed as vegetable oil.

The zoo’s community conservation manager, Rachel Lowry, said research had shown that palm oil was in 40 percent of products in Australian supermarkets. Giving consumers the choice to buy products that contain only certified oil could pressure food manufacturers to make the switch, she said.

“This campaign is not trying to cripple an industry,” she said. “It’s trying to generate a sustainable industry.”

Hundreds of thousands of people depend on palm oil for their livelihoods. In 2008, the Malaysian industry was worth 64 billion ringgit, or $18 billion, and employed about 860,000 people, according to the Malaysian Palm Oil Board. Statistics on Indonesia’s industry are harder to come by, but Oil World says production there exceeds that of Malaysia.

Sime Darby Plantations, one of Malaysia’s largest, has produced 100,000 tons of certified oil since it received its first certification last year. The company, which produces about 2.2 million tons a year from plantations in Malaysia and Indonesia, aims to certify all its operations by 2011.

It costs Sime Darby an additional $2 to $4 per ton to produce certified oil, but its managing director, Azhar Abdul Hamid, said not many manufacturers were prepared to pay more for certified oil.

Still, Mr. Azhar, who is chairman of the Malaysian Palm Oil Association, said “most if not all major players” were committed to the roundtable principles and were aggressively pursuing compliance. “It’s not going to happen overnight; it will happen over a period of time,” he said. “But I think we are winning the game.”

The World Wide Fund for Nature was one of the founding members of the roundtable. Adam Harrison, the group’s deputy representative on the roundtable’s executive board, said that beyond certifying palm oil as sustainable, the group had set up systems to trace certified palm oil from the mill to the consumer. “This allows the whole supply chain to engage in sustainability,” he said.

While acknowledging that the roundtable was “not yet perfect,” he said, “By engaging with the industry as a whole we can encourage them to work towards sustainability more quickly.”

Greenpeace, though, says that forests are still being felled to make way for plantations. The group wants producers, manufacturers and consumer companies to go beyond the roundtable process, endorsing a total ban on any further destruction of forests in Southeast Asia, similar to one the group helped broker in the Amazon in 2006, which put rainforests off limits to soy growers. Mr. Turner said that while the soy industry had remained profitable, the moratorium had helped ensure that producers did not contribute to further deforestation.

The roundtable says it investigates any complaints lodged against members suspected of breaching its criteria. Dr. Rao said producers would be stripped of their membership if a complaint was proved and the member did not take action as advised by the grievance panel. He welcomed campaigns encouraging the use of certified oil but said boycotting the industry was not the answer.

“Despite what anyone says,” he said, “palm oil is probably going to be required by the world.”