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The real price of palm oil

Palm oil is now one of the world’s most sought-after commodities but the methods used for its production threaten the environment and worsen climate change, says PETER FROST

Today palm oil, an edible plant oil, has become a common ingredient in many consumer products. It is contained in thousands of items from processed foods to candles, cosmetics, detergents and biofuels. Many of the most popular fast food chains fry in palm oil.

Strangely you won’t find it listed on most ingredient labels, only a few manufacturers — mostly in the organic sector — label their products as containing palm oil. Most companies disguise it, referring to it simply as vegetable oils and fats.

The demand for palm oil has increased worldwide sharply over the last few years. With 53 million tons in 2011 it is the most widely produced vegetable oil. It has the highest yield of any oil crop and is the cheapest vegetable oil to produce and refine.

But, and it is a huge but, this burgeoning industry is threatening rainforests and the rich flora and fauna that make them their habitat.

Everything from elephants, tigers, rhinos, orangutans and even rare carnivorous pitcher plants are being pushed to the edge of extinction.

Oil palms need a rainforest climate, with its consistently high humidity and temperatures, and a lot of land, so plantations are often set up at the expense of rainforests.

About 90 per cent of the world’s palm oil production currently comes from Malaysia and Indonesia where palm oil plantations are currently the leading cause of rainforest destruction.

New estimates suggest that 98 per cent of the rainforest there may be destroyed by 2022 as it’s being obliterated at a rate equivalent to 300 football pitches every hour. 

It isn’t just forest plant and animal species that are at risk — the slash-and-burn clearing of huge areas is a real threat to both the local and the global environment.

When preparing rainforest land for a palm oil plantation any valuable trees are cut down and the timber removed first. What remains is cleared by burning. If the forest is on peatland, as is the case in much of Indonesia, the land is drained.

Peatlands store vast quantities of carbon and the conversion of a single hectare of Indonesian peatland rainforest releases up to 6,000 tons of carbon dioxide.

Tropical deforestation — much of it for palm oil — is currently responsible for about 18 per cent of greenhouse gas emissions, making it a significant contributor to climate change.

Indonesia’s rainforests and peatlands are among the world’s most species-rich environments on earth and home to numerous endangered plants and animals, such as orangutans, Sumatran tigers and Borneo rhinos.

Rare and exotic plants like nepenthes — the carnivorous pitcher plants — as well as various species of orchids also need the particular conditions of the mature rainforest to survive.

Orangutans are particularly vulnerable because they are dependent on large forest areas. In search of food, they often stray on to the palm oil plantations, where they are regarded as pests and around 1,500 orangutans a year are clubbed to death by palm oil plantation workers. The UN predicts that no wild orangutans will remain outside protected areas by 2020.

As the campaign against palm oil has grown the industry has tried various attempts to give the impression it has cleaned up its act.

Several companies have pledged to use only organic palm oil. While this might work for some companies, worldwide demand cannot possibly be covered by organic palm oil alone.

Organic isn’t always what it claims to be. One supplier of organic palm oil in Colombia has been responsible for serious accidents and spills, excessive use of water, pollution, deforestation and the eviction of small farmers from their land.

Major palm oil producers and consumers established the Roundtable on Sustainable Palm Oil (RSPO) in co-operation with nature charity WWF. Members include Nestle and Unilever and the label association is chaired by a senior executive of the Unilever Group.

The aim of the RSPO label is to promote the production and sale of palm oil even further and restore its social acceptability.

It does not stop the clearing of rainforest. Only what it calls high conservation value forests are protected. But there is no international agreement in what constitutes “high conservation values.”

Companies that are members of RSPO have been involved in some dubious behaviour. Wilmar — the world’s leading palm oil company — for instance is involved in over a hundred land conflicts and human rights violations in Indonesia alone.

Sinar Mas — another major RSPO player — has cleared tropical rainforest all over the country for its palm oil plantations and is expanding rapidly.

Climate protection is a consideration that the RSPO ignores completely, hence Greenpeace International considers RSPO to be “little more than greenwash.”

Now things are about to get worse. Standard Chartered, a massive transnational bank, is about to bankroll the third-largest palm oil producer in the world Felda to purchase even more palm oil land in Indonesia.

Yet Felda, which was set up by the Malaysian government, has been accused of being responsible for horrific slave-labour conditions and widespread environmental destruction.

The Wall Street Journal carried a report recently about the way Felda runs its palm oil business in Malaysia.

It interviewed a 22-year-old palm cutter who said he had been working for Felda seven days a week for some months without receiving any pay. He was trafficked from Bangladesh and had endured three weeks in a crowded boat with inadequate food and water, followed by more weeks confined in a jungle camp while guards extorted a ransom from his parents back home.

The Journal reported that this spring Malaysian and Thai police found nearly 150 bodies of people thought to have died in human traffickers’ camps. Nearly 50,000 people have boarded boats for the perilous journey to Malaysia in the past two years alone and many died on the way.

The US Department of Labour has cited Malaysian palm oil production as an industry where forced labour occurs. The State Department, in its Trafficking in Persons Report for last year condemned Malaysia.

Some of Felda’s workers are desperate refugees who relied on people-traffickers to get them into Malaysia. 

Other accusations against Felda are that it gets its workers through labour contractors — who have been known to have confiscated workers’ passports — and that it makes the workers pay for their own equipment. 

The abuse is ongoing and contractors have been known to illegally withhold low wages for months on end.

A massive international campaign seeks to persuade Standard Chartered not to loan the money to Felda.

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