Major palm oil firm Wilmar vows to end supply chain deforestation

Major agri-business group Wilmar International has vowed to end its part in deforestation by driving its new policy to advance a responsible palm oil industry, the largest driver of deforestation in Indonesia.

The company’s new policy, No Deforestation, No Peat, No Exploitation, establishes mechanisms to ensure that both Wilmar’s own plantations and companies from which Wilmar sources will only provide products that are free from links to deforestation or abuse of human rights and local communities.

It also includes measures to protect high carbon stock and high conservation value landscapes, and to “ensure respect for community rights and support for development”.

Committing further, Wilmar signed a Memorandum of Understanding (MoU) with global consumer goods company Unilever which aims to accelerate sustainable market transformation for palm oil.

As well as Unilever, Wilmar supplies palm oil to several other well-known brands such as Reckitt Benckiser and Proctor & Gamble, and controls almost half of the world’s palm oil market.

This large stake in the market has prompted environmental groups to question the company’s policies and commitment to ethical and sustainable practices.

In October, Greenpeace attacked the company by saying its customers, such as the makers of Oreo biscuits, Gillette shaving products and Clearasil, are “making consumers unwitting accomplices in the destruction of Indonesia’s forests”.

Wilmar has carried out work to preserve high conservation value (HCV) forests and peatland on its own concessions. However, Greenpeace said at the time that these areas supply less than 4% of the palm oil Wilmar trades and refines, with the remainder being produced by third-party suppliers.

The company has responded with the announcement of its new policy and has also said that it will become a member of The Forest Trust (TFT), a global non-profit organisation that works with businesses to deliver responsible products.

Wilmar CEO Kuok Khoon Hong said: “We can produce palm oil in a way that protects forests, clean air and local communities, all while contributing to development and prosperity in palm oil growing regions.

“We know from our customers and other stakeholders that there is a strong and rapidly growing demand for traceable, deforestation-free palm oil, and we intend to meet it as a core element of our growth strategy. We welcome more participation from the industry, financial institutions, and civil society to join this initiative, which will accelerate the achievement of our common goals,” added Khoon Hong.

TFT executive director Scott Poynton said that Wilmar’s new policies include all the elements needed for success.

“A commitment to production that doesn’t involve deforestation, peatland conversion, or exploitation, and a credible plan for implementation,” he added.

Managing director of consultancy Climate Advisers’, who has been working closely with Wilmar to develop the policies, Glenn Hurowitz commented on the potential Wilmar’s commitment has on driving behavioural change in the industry.

“Given its central role in the palm oil industry, Wilmar’s commitment has the potential to truly transform agricultural production to a responsible basis,” said Hurowitz.

“Wilmar and Unilever’s efforts can be a model for other companies that want to grow their businesses in a way consistent with the urgent need to address deforestation and climate change,” he added.

In Novermber, Unilever made its own pledge to buy all of its palm oil from known and traceable sources by the end of 2014, a part of its target to procure the controversial oil from certified sources by 2020.

Leigh Stringer

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