Changing the Palm Oil Industry: Where Does it Stand?

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Palm oil plays a major role in formulating endless products, spanning across industries. These items require its presence, making the oil unparalleled and too difficult to replace. Although it has no real substitute, its production has raised red flags and caused reasonable outcry from activists. And despite exploitative and environmentally harmful practices running rampant in the palm oil industry, oil palm fruit still uses land more efficiently than other plant oils. This means the best solution is to improve palm oil’s sustainability. How is that being accomplished down the supply chain, and how can the industry continue to improve moving forward?


Why has palm oil harvesting been critiqued?


For years, people have critiqued the production and consumption of palm oil due to its negative environmental and social impacts. In Malaysia and Indonesia – where over 85% of palm oil harvesting occurs – major deforestation has occurred. Clearing land and draining peatlands has been cause for significant concern in these regions, creating air pollution. These issues inflict devastation on the ecosystems.


The human rights concerns are caused by exploitative practices where producers seize land from locals and harbor unfair working conditions with subpar pay. Child labor is a problem at many of these plantations, and some workers have even been trafficked into working there. Because a large portion of the plantations are run by small scale farmers, monitoring their procedures has proven difficult with an extreme deficit of enforcement.


The Roundtable on Sustainable Palm Oil (RSPO) works to regulate the practices in palm oil production, with the goal being to create a more sustainable and ethical manufacturing process. Unfortunately, certified sustainable production only accounts for 19% of the global palm oil market, and that minority still proves challenging to monitor. Studies have found that even certified plantations are not up to par with these guidelines – they are not always much different from their uncertified counterparts in the grand scheme of things. 


The palm oil supply chain


Perhaps the most daunting part of imposing strict guidelines in palm oil production lies within the complex supply chain. Because a simple, direct route from farm to manufacturer to consumer does not exist, much of the process becomes convoluted. 


For palm oil to get all the way to the company purchasing it, we must first go to the start – plantations. Thousands of plantations and small farms account for the agricultural harvesting portion of the chain. From these thousands of (oftentimes small) operations, we move onto thousands of palm oil mills. With a large number of parties involved in the beginning of this process, monitoring for ethical practices becomes difficult, and the onus lies on large companies whose funds flown down the chain, as well as RSPO.


From the mills, the oil moves to collection ports and then to refineries. Traders and oil producers are involved in this stage. Eventually, the oil makes its way to the manufacturers, who can utilize the oil in everything from a package of cookies to a tube of lipstick for big corporations. Notably, certified sustainable palm oil is more expensive to produce, which means these large companies who rely on palm oil for their products opt for cheaper costs in favor of sustainable production. 


The significance of palm oil


Despite these issues, palm oil remains in demand. Why? Simply put, palm oil is troublesome to replace. This versatile product is much less sustainable than comparable plant oils. Although palm oil production has negative environmental effects, other oils would actually cause significantly more destruction if harvested on the same scale. Additionally, replacements would prove to be difficult to formulate, requiring much more time and new technology. 


Attempting to substitute palm oil for an alternative oil would only relocate the environmental impacts. Instead of causing widespread issues in Malaysia and Indonesia, they would simply pop up in the places where other oils are largely harvested and produced. Palm oil itself isn’t the issue, according to experts. The issue lies within the unregulated areas of the supply chain.


So the question presents itself – how can we move forward with palm oil in a positive way?


Palm oil: a look ahead


It’s clear that palm oil exists as our best option for countless products. Simply put, the industry needs a better way to deliver it from farm to consumer. In 2010, over 100 companies committed to cleaning up their supply chains by the end of 2020, promising claims of environmental sustainability to reduce deforestation. Unfortunately, they largely fell through. 


The World Wildlife Fund’s 2020 annual scorecard report found that only 15 out of 173 performed well. Many of the companies surveyed were household names that provide a large number of products to people worldwide. They failed to provide verification of sustainable practices within their supply chains, which is crucial to ensuring good ethics in the palm oil process. 


Looking to the future, organizations like the Rainforest Action Network and WWF can contribute to positive changes, continuing their assessments to keep corporations honest and maintain transparency with consumers. RSPO, of course, plays an integral role as well, as it can work towards improved strategies to enforce their regulations. With over 5,000 members spread across every stage of the supply chain, this is a notable start to sustainable sourcing. 


Companies hold a huge part in this process too, as they have the power to ban suppliers with unethical practices from their chains. If more people call for these corporations to hold their suppliers accountable and commit to deforestation monitoring, changes of significant weight can come to fruition.


Many advocates also call for legislation, citing it as a powerful catalyst for advancement in the palm oil industry. Legislative campaigns currently exist, fighting for a goal of requiring companies to certify that their products do not play a part in deforestation. These demands would push companies from voluntary promises to required and enforced restrictions.


Hope ahead


Although the history of palm oil production is fraught with controversy, the potential of change is on the horizon. With increased awareness and commitment from many parties to shift their actions, the possibility of a transformed industry exists. Companies like Natural Habitats commit to transparency about palm oil sourcing, possessing the highest level of certification from RSPO. This means that its palm oil is 100% traceable, never mixing with uncertified palm oil along the supply chain.


To find out about Natural Habitats and its practices, visit the website, and learn more about the important work being done by the company and other companies who care.

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