Thematic Report

Asia environment: Who is leading palm oil reform?

by Chuanyao Lu / Mar 1, 2016

Sustainable Path: Palm-oil reform


Southeast Asia’s haze in 2015 was a disaster by any measure. Indonesia’s fires resulted in more than half a million people being treated for respiratory illnesses; carbon emissions that pushed the country to the top of the global league of emitters; and economic costs in the tens of billions of dollars.

While the fires have complex causes, the palm-oil industry clearly bears some responsibility. It was already engaged in a full-frontal battle against public opinion to safeguard its reputation and strengthen its credentials as a sustainable endeavour. The fires underline the need to adopt a new vision for developing the sector. This will require more respect for other uses and users of land, along with better use of the land already planted.

Climate change and shrinking forests are hot topics in the international arena and people naturally feel the need to apportion blame. With a history of land clearing and burning that has harmed biodiversity, flora and fauna across Indonesia and Malaysia, the palm-oil industry is an easy target. The sector has also raised the ire of neighbouring countries, such as Singapore, by contributing to the haze that has plagued Southeast Asia with a direct impact on human health.
That said, palm-oil has redeeming qualities. It is an efficient crop that produces the most edible oil per hectare of land. And in just under 50 years, it has risen from an unknown product outside of Africa to become the world leader, with a 30% market share in edible oils. Without it, we would have had to clear five to 10 times more land to feed the explosion in demand over the past half-century. Palm-oil cultivation also employs more than four million people across Malaysia and Indonesia and has helped communities break out of the poverty trap by providing a sustainable source of income.

Constant criticism of plantation companies has seen a major shift in attitude among the leading players. Having previously regarded sustainable practices as a chore, they now promote them as a key differentiating factor in marketing their products to discerning customers. Policy adoption, full traceability, responsible planting and stakeholder engagement are now the main tenets on which sector firms are judged.

The problem arises when some participants do not follow the rulebook. While the movers and shakers of the palm-oil sector have taken major steps towards producing a sustainable product, a significant proportion of companies still lag industry benchmarks on environmental protection.

Thankfully, it is never too late to start down a new track. Positive action will help to foster a more sustainable industry which produces an edible oil that is ubiquitous in daily life. Palm-oil is found in an array of goods, including soap, cosmetics and chocolate bars.