Top palm oil producer Wilmar drops out of climate change group

Bulking Installation and Packaging Plant of WILMAR - Sandakan. Photo: CEphoto, Uwe Aranas

Wilmar, one of the world’s biggest palm oil companies, left a coalition that aims to reduce carbon emissions and deforestation, citing management problems. Now the firm’s commitment to sustainability is cast further into doubt.  

By Zachary Frye                                                               

On April 2, 2020, palm oil giant Wilmar announced that it was leaving the High Carbon Stock Approach Steering Group (HCSA), an organization made of NGO and industry partners that aims to implement a protocol to distinguish which types of land are suitable for agricultural development.

The group uses a methodology that rates areas of land based on their biodiversity and levels of carbon stocks in soil and vegetation. Some land, for instance, may be more degraded than other areas, making it more suitable for development.

In the long term, HCSA’s hope is that companies will stay away from operating on lands with high carbon stocks and biodiversity, maintaining the natural environment, keeping carbon sequestered in the ground and slowing the pace of man-made climate change.

According to HCSA, the methodology was developed “with the aim to ensure a practical, transparent, robust, and scientifically-credible approach that is widely accepted to implement commitments to halt deforestation in the tropics, while ensuring the rights and livelihoods of local peoples are respected.”

In its decision to leave, Wilmar cited governance issues and mismanaged budgets. They argue that the group did not properly address their internal objections, making its decision to pull out “a matter of principle.”

HCSA, for its part, acknowledged Wilmar’s decision and encouraged them to rejoin and continue to implement the approach throughout their supply chains. Wilmar stated that it “remains firmly committed to the adoption and implementation of the HCSA toolkit.”

Despite the promises, Wilmar’s environmental record has repeatedly failed to live up to expectations

In 2013, Wilmar introduced a company policy called “No Deforestation, No Peat, No Exploitation” (NDPE) in its supply chains. The policy was meant to cut abuses out of all aspects of its business operations, including those of third-party suppliers and growers.

According to a report by Greenpeace unveiled late last year, however, Wilmar subsidiaries continue to engage in illegal deforestation and contribute to the prevalence of forest fires in Indonesia.

In 2019, Greenpeace claims that groups associated with Wilmar were directly responsible for some 250 fire hotspots within the country. Collectively, Indonesian forest fires cleared over 850,000 hectares of land in 2019 alone, creating prolonged periods of smoke and haze that left many locals suffering from respiratory problems

Greenpeace also alleges that after Wilmar adopted its NDPE policy, instead of working with problematic suppliers to fix issues within its supply chain for good, they mostly opted to sell off those suppliers to other companies, which did little to prevent the problems from reoccurring.

In 2018, it was documented that GAMA, a separate palm oil company owned by a former Wilmar executive, razed forests twice the size of Paris for their expanding operations in Indonesia. Wilmar officially broke ties with GAMA following the incident but then decided to resume purchasing GAMA palm oil in March 2019, citing progress on NDPE.

“It is alarming that Wilmar, given its problematic history, continues to fail on its commitments to implementing No Deforestation,” said Grant Rosoman, a senior advisor for Greenpeace International, following Wilmar’s exit from HSCA. “Instead of demonstrating real progress to end fires and deforestation in its supply chains, it has chosen to quit and criticise HCSA.”

Local communities continue to struggle

In addition to Wilmar’s failure to fully address deforestation and forest fires within its supply chains, some local communities are continuing to struggle with Wilmar subsidiaries who have encroached on indigenous lands and sometimes resorted to harassment and threats of violence to get their way. 

Patrick Anderson, a policy advisor with the Forest People’s Programme, an NGO that works with local communities in West Sumatra, Indonesia, told ASEAN Today that Wilmar’s exit from HCSA occurs in front of a backdrop of ongoing unresolved land disputes.

“For our part, Forest Peoples Programme is concerned that Wilmar is still not acting decisively to resolve the very numerous land conflicts in its palm oil concessions in West Sumatra, where Minangkabau indigenous peoples’ customary lands have been taken without community consent and where communities claim they are being unfairly criminalised when they object or file complaints about their mistreatment,” he said.

The Minangkabau people are the largest indigenous ethnic group on the island of Sumatra and traditionally use their lands to raise crops for community consumption. 

Wilmar needs to work with groups fighting climate change, not leave them

Regardless of the alleged internal problems at HCSA, as one of the largest palm oil producers in the world, Wilmar has an obligation to work with the organization in good faith on making land-use and development as environmentally friendly as possible.

Palm oil is used in countless everyday products from food items to cosmetics to biofuel, and many industries benefit from its abundance.

But to ensure that local communities and the natural environment are protected in the long term, it is imperative that large corporations like Wilmar go beyond rhetoric and make serious efforts to work with all aspects of its supply chain to ensure safety, fairness and sustainability.

It isn’t good enough to simply adhere to these principles within the organization, although that would be a huge step forward. As an industry leader, Wilmar should look at itself as an organization that could potentially be an example for sustainability in the palm oil sector at large.

In its statement when leaving HCSA, Wilmar gave repeated examples of its service within the organization, especially its leadership and its dedication to the HCSA principles. If that is the case, Wilmar should not have abandoned it. For the threats of climate change to be averted, it will take sustained collaboration from all relevant actors, especially industry leaders.

About the Author

Zachary Frye
Zach is a writer and researcher based in Bangkok. He studied Political Science at DePaul University and International Relations at Harvard. Interests include human rights, political affairs, and the intersections of culture and religion.