Brasil Biofuels' biodiesel plant in Envira, Amazonas state. The company foresees investments of 1.8 billion reals in a biorefinery in Manaus that will begin production in 2025 (Image: Brasil BioFuels)

By Monica Prestes
MANAUS, Brazil, Apr 4 2022 (IPS)

Oil palm, known as dendezeiro in Brazil, can produce up to ten times more vegetable oil per hectare than other crops, but it is regularly condemned as harmful to the biodiversity of tropical forests in Asia, Africa and Latin America. Now, its cultivation looks set to advance in the Brazilian Amazon.

In December, Brasil BioFuels (BBF) and Vibra Energia – the country’s largest distributor of biofuels – announced plans to build a biorefinery for “green diesel” in Manaus, the capital city of Amazonas state. Produced from soybean and/or palm oil, the fuel is seen by many as desirable for low-carbon futures, as it is less polluting than fossil-based diesel.

“This is the crop with the most devastating potential in the world being implemented in the heart of the world’s largest tropical forest,”

Lucas Ferrante, researcher at the National Institute for Amazonian Research


The refinery is currently in the study phase, and is still without an environmental license or deadline to start construction. But with planned investments of 1.8 billion reais (US$378 million) and a start of operations in 2025, the venture could produce up to 500 million litres of diesel per year.

To reach this volume of production, BBF plans to plant 120,000 hectares of oil palm by 2026, in areas yet to be defined. This would increase the area devoted to oil palm in Brazil by about 60%, with the crop used in a variety of consumer products already occupying 201,000 hectares in the country, according to data from the Brazilian Institute of Geography and Statistics (IBGE).

Brazilian law states that oil palm should only be cultivated in areas that were deforested before 2007. BBF’s president, Milton Steagall has assured that the crop already follows these sustainable standards, and also contributes to carbon sequestration in previously degraded areas.

“Oil palm does not occupy forest space. We are talking about areas that were ‘anthropised’ before 2007, and which would be difficult to recover, because frequently they have already turned into pasture,” Steagall told Diálogo Chino. “We take degraded areas and make a perennial crop, which is not mechanised, does not require much fertiliser, and produces for 35 years.”

Steagall added that the refinery will help to power 20 thermoelectric plants in operation and another 14 being planned in the Amazon. For this reason, he said, it will be vital to offer a source of clean energy to the region’s thermoelectric plants, which currently operate with fossil diesel.

However, researchers and environmentalists have criticised the expansion of infrastructure for the production of palm oil in the Amazon.

“This is the crop with the most devastating potential in the world being implemented in the heart of the world’s largest tropical forest,” said Lucas Ferrante, a researcher at the National Institute for Amazonian Research (INPA). He described oil palm as “a proven predatory crop, which causes enormous loss of biodiversity”.

There are multiple impacts that the advance of oil palm plantations can have on tropical forests – which have mainly been seen in the palm hotspot of Southeast Asia, where habitat loss has put at least 193 species at risk of extinction. And according to the Union of Concerned Scientists, only 15% of species that inhabit tropical forests can survive in oil palm plantations.

Palm oil in Brazil goes against the world

In 2010, the Brazilian government launched the Sustainable Palm Oil Production Programme with the expectation of leveraging Brazilian production and developing in the Amazon region, but the programme has not taken off. Less than 3% of Brazil’s biodiesel today comes from oil palm, according to the National Petroleum Agency.

“There is no way to fulfil the commitment of only producing in an already deforested area without governance, without control and without enforcement of environmental laws,” says Rittl, reinforcing that, even though oil palm contributes to sequestering carbon by replacing degraded pastures, it stimulates new deforestation. “Oil palm is pressuring cattle ranching into new areas of native forest,” he adds.

This is occuring, Rittl recalls, amid the ongoing dismantling of environmental protection agencies in Brazil and successive record years for deforestation and invasions of protected areas. Between 2019 to 2021, the average annual deforestation in the Amazon was 56.6% higher than the 2016 to 2018 period.

Although palm oil has little share in Brazil’s fuel matrix and it is not even self-sufficient in that it requires imported oil. Cultivation of oil palm has almost doubled in the last decade in the country, according to IBGE, driven by fiscal stimuli that helped attract agribusinesses to the Amazon.

But while Brazil invests in oil palm to target biofuel and energy markets, growing international pressures are leading two major buyers – Europe and the United States – to discuss import barriers.

The EU also hopes to eliminate palm oil-based fuels by 2030 – five years after the Brazilian refinery goes into operation – while Germany has announced the end of the use of palm oil for the production of biofuels as of 2023.

In China, there are discussions aimed at reducing the import of palm oil without certification, says Rittl. The certification body, the Roundtable on Sustainable Palm Oil (RSPO), has been working to reduce the environmental impact of the country’s procurement, as it is also a major importer.

“If we have an expansion of production in Brazil beyond domestic use, there will soon be no room in the market,” says Rittl.

Expropriation of land for oil palm plantations in quilombola communities has generated conlfict (Image: Negritar Produções)

Palm oil impacts on traditional Amazon communities

The advance of palm oil has already had negative impacts on traditional communities in the Amazon, according to André Carvalho, a professor at the Federal University of Pará (UFPA). “Studies confirm the almost complete loss of character of the way of life in the region, food insecurity, besides the expropriation of land and violence in the field, including murders,” he told Diálogo Chino.

José Joaquim Pimenta, president of the association that brings together six quilombola communities, said that the expropriation occurred more than three decades ago. At first, Agropalma’s expansion occurred “on a small scale”, Pimenta says, through land purchase. But starting in 1987, the company acquired a farm and went beyond the limits of the property.

Pimenta says the company “invaded traditional territories, initiating grilagem [land grabbing]. Between 1987 and 1990, it cut down a very large natural reserve area to plant oil palm.” In 2015, the legal fight to return to these areas began.

In 2018, the Federal Court suspended the registration of two Agropalma farms on suspicion of illegal occupation, falsification of documents and notary fraud, following a request from the State Public Ministry of Pará (MPE-PA).

Quilombola communities are resisting the encroachment of oil palm plantations onto their territories (Image: Joaquim Pimenta)

This article was originally published by ChinaDialogue

Children from one of the communities in Ocean Division, southern Cameroon, who lost much of their forestland after the government leased it to a logging company. Credit: Monde Kingsley Nfor/IPS

By Carey L. Biron
WASHINGTON, Dec 9 2014 (IPS)

Just half of major global banks have in place a public policy to respect human rights, according to new research, despite this being a foundational mandate of an international convention on multinational business practice.

Further, of the 32 global banks examined, researchers found that none has publicly put in place a process to deal with human rights abuses, if identified. None has even created grievance mechanisms by which those impacted by potential abuses can complain to the banks.“The findings of this report are quite sobering about what can be expected from self-regulatory principles.” -- Aldo Caliari

The findings, published by BankTrack, an international network of watchdog groups, come three and a half years after the adoption of the United Nations Guiding Principles on Business and Human Rights. These principles, unanimously endorsed by the U.N. Human Rights Council in 2011, specify a range of actions and obligations for all businesses, including the financial sector.

Yet banks have a unique role in underwriting nearly all of the business activity around the globe, even as they are typically shielded from the impacts of those investments.

“Banks covered in this report have been found to finance companies and projects involving forced removals of communities, child labour, military backed land grabs, and abuses of indigenous peoples’ right to self-determination,” the report, released last week, states.

“Policies and processes, open to public scrutiny and backed by adequate reporting, are important tools for banks to ensure that these kinds of abuses do not happen, and that where they do, those whose rights have been impacted have the right to effective remedy … If these policies and procedures are to be meaningful, the finance for such ‘dodgy deals’ must eventually dry up.”

One of the banks studied in the new report, JPMorgan Chase, is one of the leading U.S. financiers of palm oil, through loans and equity investments. While the bank does have a human rights policy, BankTrack’s researchers find this policy applies only to loans, not investments.

“When it comes to reporting on implementation, the bank falls flat, making the policy little more than window-dressing,” Jeff Conant, an international forests campaigner with Friends of the Earth U.S., a watchdog group that is working on palm-oil financing, told IPS.

“We’ve spoken with JPMorgan Chase about the need to give impacted people an opportunity to file complaints about the human rights impacts of its financing, with the belief that this is a first step towards accountability. Frankly, from the bank’s response, I don’t see them stepping up anytime soon.”

While private finance today facilitates almost the full range of corporate activity, Conant notes, “the finance institutions themselves are wholly unaccountable.”

Sobering results

According to the new study, a few banks appear to be well on their way to conformity with the Guiding Principles. The top-ranked institution, the Dutch Rabobank, received a score of eight out of 12, with Credit Suisse and UBS close behind.

These are the exceptions, however. Against a set of 12 criteria, the average score was only a three.

Many scored at or near zero. While those ranked at the very bottom include several Chinese institutions, they also include banks in the European Union and the United States.

Indeed, Bank of America, one of the largest financial institutions in the world, scored just 0.5 out of 12, receiving a minor bump for having expressed some commitment to carrying out human rights-related due diligence. (The bank failed to respond to request for comment for this story by deadline.)

“The findings of this report are quite sobering about what can be expected from self-regulatory principles,” Aldo Caliari, the director of the Rethinking Bretton Woods Project at the Center of Concern, a Washington think tank, told IPS.

“The Guiding Principles are the bare minimum of any human rights framework in the corporate sector, a framework that has the companies’ consent. So the fact that there is so little [adherence to] such a relatively weak tool, where every effort to court corporations’ support has been made, is, indeed, very telling.”

Despite the spectrum of findings on implementation, the financial services industry as a whole has taken note of the Guiding Principles.

In 2011, four European banks met to discuss the principles’ potential implications for the sector. Three more banks eventually joined what is now called the Thun Group, and in October 2013 the grouping released an initial paper on the results of these discussions, including recommendations for compliance.

A previously existing set of voluntary guidelines for the banking sector, known as the Equator Principles, were also updated in 2013 to reflect the new existence of the Guiding Principles. So far, the Equator Principles have been signed by 80 financial institutions in 34 countries.

“To date, banks’ efforts to implement the UN Guiding Principles have mainly revolved around producing discussion papers on the best way forward,” Ryan Brightwell, the new report’s author, said in a statement.

“BankTrack has welcomed these discussions, but some three and a half years on from the launch of these Principles, it is time to move onto implementation.”

Strengthening accountability

The new findings on lagging implementation will strengthen arguments from those who want to tweak or supplant the Guiding Principles. Some suggest, for instance, that the framework be changed to treat financial institutions differently from other sectors.

“[T]he financial sector requires an exceptional treatment when it comes to the application of the Guiding Principles,” the Center of Concern’s Caliari wrote last year in comments for the Working Group on Business and Human Rights.

“Financial companies, more than other companies, have the potential, with their change of behaviour, to influence the behaviour of other actors. That means they also should be upheld to a greater level of responsibility when they fail to do so.”

Caliari and others are also part of a movement to move beyond voluntary frameworks such as the Guiding Principles (at least in their current form), and instead to see through the creation of a binding mechanism.

This decades-long effort received a significant boost in June, when the U.N. Human Rights Council voted to allow negotiations to begin toward a binding treaty around transnational companies and their human rights obligations. (This same session also approved a popular second resolution, aimed instead at strengthening implementation of the Guiding Principles process.)

The new data on banks’ relative lack of compliance with the Guiding Principles, Caliari says, is one of the reasons the call for a legally binding treaty “has been gaining ground.”

He continues: “It is increasingly clear that mechanisms that rely on the consent of the companies cannot be the total of available accountability mechanisms. More is needed.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

The multinational food giant Mars, Inc. unveiled Monday a new set of guidelines aimed at ensuring that its palm oil supply lines are completely traceable and sustainable by next year.

Global demand for palm oil has increased substantially in recent years, for use in both foods and household goods. Yet the industry, overwhelmingly centred in Malaysia and Indonesia, has been rife with environmental and labour problems."This isn’t an activist-led commitment. They’re doing it because they want to do it." -- Bastien Sachet

Recent months, however, have seen a cascade of major reform commitments from both palm oil suppliers and well-known consumer brands such as Mars.

“Rapid expansion of palm oil plantations continues to threaten environmentally sensitive areas of tropical rainforest and carbon-rich peatlands, as well as the rights of communities that depend on them for their livelihoods,” Barry Parkin, chief sustainability officer at Mars, best known as the maker of M&Ms and other candies, said Monday.

“We believe that these additional measures will not only help build a genuinely sustainable pipeline for Mars, but will also help accelerate change across the industry by encouraging our suppliers to only source from companies whose plantations and farms are responsibly run.”

Under the new guidelines, Mars will require that all of its suppliers have in place sourcing plans that are both fully sustainable and fully traceable by the end of this year, to be implemented by the end of 2015. The company, headquartered just outside of Washington, is also instituting a “no deforestation” pledge for its palm oil supply as well as its sourcing of paper pulp, soy and beef.

“Four years ago, Nestle decided to go for full traceability and no deforestation, but at the time that decision was seen as very niche because it was being pushed by environmental activists,” Bastien Sachet, director of the Forest Trust, a global watchdog group that focuses on responsible products and whose newest member is Mars, told IPS.

“The great thing about Mars, particularly in their push against deforestation across commodities, is that this isn’t an activist-led commitment. They’re doing it because they want to do it, which means that they see what’s happening.”

Workers on Bugala Island work to clear the rainforest to make way for an expanding palm tree plantation. Palm oil production is one of Uganda’s rising industries. Credit: Will Boase/IPS

In this, Sachet refers to a growing trend from both palm oil supply companies and major consumer brands to recognise that previous industry certification efforts to clean up palm oil supply lines have been relatively ineffective. Ensuring the traceability of palm oil, on the other hand, turns this certification model upside-down.

“Over the last four years, the general public, industry and the brands have struggled to make progress on sustainability with the tool of certification. Meanwhile, we saw forests being trashed in Malaysia and Indonesia, a process that’s also beginning in Africa,” Sachet says.

“But now they’re realising that certification is not the only way to go. Instead, we can get traceability first, figure out where it’s coming from and then figure out what’s happening around its production. Eventually we can incentivise those guys who are doing well with more market share – and penalise those that aren’t.”

While much of the industry is currently based in Southeast Asia, many observers point to looming problems in Africa, where land is starting to be snapped up by speculators. Yet Sachet says the new policies being put in place by the global food industry could be laying the grounds for finding a balance between development and conservation throughout the palm oil industry.

Half the supply

A voluntary certification process for responsible palm oil production, known as the Roundtable on Sustainable Palm Oil (RSPO), has been in effect for a decade, and most of the major users of palm products do abide by its guidelines. Yet it’s become increasingly clear that RSPO certification has been unable to halt the industry’s mass deforestation and destruction of endangered habitat.

Mars’s Parkin notes that his company “recognised that even though we have already implemented a 100% certified supply of palm oil, this is not enough.”

Other major brands have made similar realisations in recent months, including Unilever, Hershey, Kellogg and L’Oreal. Perhaps more critically, this trend has now included some of the largest global palm oil suppliers, including Wilmar (in December) and Golden Agri Resources (GAR, just last week).

Wilmar alone accounts for more than 40 percent of the global palm oil supply. Altogether, companies controlling a bit more than half of that supply have now committed to having their products be deforestation free by 2015.

As recently as the middle of last year, that figure was zero.

“There has been progress and I definitely think we’re on the right track, though there’s still a long way to go,” Calen May-Tobin, lead analyst for the TropicalForest and Climate Initiative at the Union of Concerned Scientists (USC), a watchdog group here, told IPS.

“It’s also important to remember that these are still just public commitments. The action happens when these commitments get turned into policies and are actually implemented.

Last week, UCS released a scorecard that rated palm oil-related sustainability progress by the packaged food, fast food and personal care industries. May-Tobin, who was a co-author on the new report, notes that much of the new public pressure has been aimed at the packaged-food companies.

“On the one hand, it’s clear that when consumers speak up, these companies listen. On the other hand, I think the report’s major finding was how poorly the fast-food sector did,” May-Tobin says.

“Further, there are still a number of other large traders that now need to follow Wilmar and GAR’s example. We think the consumer companies are equally key in helping drive the traders, as the average consumer doesn’t necessarily know who Bungee or Cargill is, but they know Hershey and Mars.”

Advocacy groups are using the recent momentum to urge holdout companies to unveil their own commitments. Greenpeace, the group widely credited with pushing Nestle to make its landmark pledges in 2010, is currently focusing on the U.S. consumer-goods giant Procter & Gamble (P&G).

“Mars joins a growing list of companies … that are finally promising forest-friendly products to their consumers. It shows that global public pressure is working, and is leaving P&G, which refuses to clean up their supply chains, increasingly isolated,” Areeba Hamid, forest campaigner at Greenpeace International, said Monday.

“P&G is relying on a certification scheme that has failed to prevent rainforest destruction in the habitat of endangered orangutans, or help reduce man-made fires like the ones that covered Singapore in smog last summer. It’s time P&G finally becomes proud sponsors of rainforests and commits to No Deforestation.”

Carmen Moreno in the Las Pavas community kitchen. Credit: Gerald Bermúdez/IPS

By Constanza Vieira
LAS PAVAS/BOGOTÁ , Nov 14 2013 (IPS)

The rural community of Las Pavas in northern Colombia received this year’s National Peace Prize Wednesday in recognition of its peaceful struggle for land that is claimed by an oil palm company, in a case that became an international symbol of the conflict over land in this country.

The day before, the members of the community, organised in the Asociación Campesina de Buenos Aires (Asocab – Peasant Association of Buenos Aires), were formally recognised as victims of forced displacement in a ceremony held in the offices of the government’s Unit for Integral Assistance and Reparations for Victims in Bogotá.

Inclusion on the official Registry of Victims strengthens Asocab in its legal battle against the company with which it is disputing ownership of the land – Aportes San Isidro SA.

As of Oct. 1 the registry included the names of 5,087,092 victims of forced displacement, out of a total of 5,845,002 victims of crimes committed since 1985 in Colombia’s nearly half-century civil war.

Adjacent to the 1,338-hectare Las Pavas hacienda, Buenos Aires is a small village in the municipality of El Peñón in the northern province of Bolívar, some 270 km southeast of the provincial capital Cartagena de Indias.

The village, which has a single street, is on Papayal island located between the river of that name and the Magdalena river, which crosses Colombia from south to north.

People in this area live in villages like Buenos Aires and depend on fishing, farming and raising farm animals for a living.

Through the Unit for Integral Assistance and Reparations for Victims, the state has rectified its previous position, and now officially recognises that the community was forcibly displaced at least twice from Las Pavas, where they worked the land.

“This is an admission of judicial incomprehension because it wasn’t understood that this community was displaced from its source of livelihood, not its place of residence” in Buenos Aires, said Juan Felipe García with the Javeriana Pontifical University’s legal clinic on land, which is providing legal assistance to Asocab.

“Today we’re going to celebrate because the truth has triumphed,” he told IPS.The campesinos want to change the name of Las Pavas, “which reminds us of difficult times,” says Misael Payares. It will now be called Milagro de Dios (Miracle of God).

The decision benefits 464 people belonging to the 124 families grouped together in Asocab. However, it does not imply recognition of ownership of the Las Pavas land.

The dispute over ownership of the hacienda is a separate legal case, which is before the Council of State and could drag on for 10 more years, the director of the legal clinic, Roberto Vidal, told IPS.

“What lies ahead now is working with the community to decide what measures they want to prioritise; reaching all of the institutional agreements necessary; coordinating with the various institutions; and obtaining the reparations they are demanding,” the director of the Victims Unit, Paula Gaviria, told IPS.

“We have to wait for the authorities to comply,” said Asocab leader Misael Payares, “so that we can see our dream come true, which is to stay in Las Pavas.”

The hacienda has been at the centre of the wider dispute over land in Magdalena Medio, a stunningly beautiful region that used to be coveted by the drug barons because of its location, which is strategic in the logistics of the trafficking of cocaine by air.

On a nearby farm, Rancho Lindo, planes landed and took off until 1983. “Were they shipping firewood, manioc, yams, or what?” Payares quipped.

Since that year, Jesús Emilio Escobar Fernández, a cousin of and front man for notorious drug lord Pablo Escobar (1949-1993), has figured on paper as the owner of Las Pavas.

Up to 1963 the land was unused publicly owned rural property.

The hacienda was abandoned after 1992, as a result of the crackdown on Escobar’s Medellín drug cartel. An enormous tree growing out of a swimming pool is testament to the fact that the property was abandoned.

The people of Buenos Aires, who have large families and are often illiterate, decided then to plant crops on part of the land of Las Pavas, and set up the Association of Peasant Women of Buenos Aires.

Later they learned that, according to article 52 of a 1994 law, the owners of privately-owned rural land lost their property rights if the land was used for drug trafficking or if it had been abandoned for at least three years.

So they occupied Las Pavas, and Asocab was born in 1997, to cultivate cacao, plantain and oak.

The left-wing guerrillas (which emerged in Colombia in 1964) used to simply pass by Buenos Aires, on their way to a nearby hill covered with coca crops, which drew many temporary harvest workers.

Sometimes they would demand payment of a tax, in the form of a chicken or a pig, from the campesinos working Las Pavas, and once they shot and killed a man who they accused of being an army informant.

When the far-right paramilitaries (which began to be formed in 1981) arrived in the area along the Papayal river in 1998 and set up camp a 20-minute walk from Buenos Aires, the guerrillas pulled out.

The paramilitaries “started to kill people,” one of the founders of the women peasant association, Carmen Moreno – whose brother is ‘disappeared’ – told IPS.

Bodies missing the head or legs would float down the river past Buenos Aires. “Even the kids would see them. And they would come shouting ‘Mommy! Mommy! There’s a leg floating by….It’s a woman, mommy, because the toenails are painted!”

But all through those years, hunger would push the villagers, confined to Buenos Aires, to brave their fear and panic over and over again and return to Las Pavas to plant and harvest their crops.

In 2006 they began the legal proceedings to get the state to revoke the existing land title, under the 1994 law. They even applied for and were granted farming loans from state institutions.

But in 2007 it turned out that the front man Escobar Fernández had sold Las Pavas to the companies Aportes San Isidro and CI Tequendama – the latter of which belongs to the Daabon group.

These firms say that no authority informed them that the private ownership status of the land was in question – which made it legally impossible to buy or sell the land.

The companies set up an oil palm production project, drying up wetlands, diverting streams and blocking roads.

President Andrés Pastrana (1998-2002) made oil palm production his administration’s chief agribusiness strategy, and his successor Álvaro Uribe (2002-2010) continued that policy.

The government decided that 66,000 hectares of oil palm should be grown in Papayal, and that a palm oil refinery to produce biofuels should be installed there.

Oil palm is the third-largest crop in Colombia, planted on more than 400,000 hectares and employing over 130,000 workers, according to the international organisation Solidaridad, which promotes responsible food production and sustainable alternatives to fossil fuels.

Oil palm has great production potential compared to other oil-producing plants, and its use is growing in the food, hygiene and cosmetics industries as well as the emerging biodiesel industry.

But in Las Pavas, palm oil is no longer being produced, and the legal battle continues.

In 2009, the companies in question got the police to evict the local campesinos. The incident cost Daabon its contract as the main palm oil supplier for The Body Shop cosmetics chain, whose parent company is L’Oreal.

Daabon preferred to pull out of the project rather than negotiate with Asocab, as The Body Shop had urged it to.

The local campesinos returned to Las Pavas in 2011. Since then they have been living there, some of them in shifts, in a settlement with two dirt roads running between improvised dwellings covered with black plastic.

In the hacienda house, Aportes San Isidro has posted armed men, without official authorisation.

The campesinos constantly complain about intimidation, destruction of crops, tires shot out on Asocab’s tractors, theft of livestock, or fires set to seeds stocks or nearby brush by incendiary device attacks on the camp.

“An outlaw group no longer has control; a few companies do,” said Payares.

“We haven’t had a human victim yet, because we have been smart enough to keep that from happening,” said Efraín Alvear, the community’s historian.

“Conquest without rifles” is the title of the book he has been writing by hand for years about the story of Asocab, he told IPS.

After their inclusion in the registry of victims and the award of the National Peace Prize, the campesinos plan to change the name of Las Pavas. “That name reminds us of difficult times,” says Misael Payares. It will now be called Milagro de Dios (Miracle of God).

A woman in Riau in Sumatra wears a mask for protection from the pollution caused by forest fires. Credit: Ulet Ifansasti/Greenpeace.

By Sudeshna Sarkar
KOLKATA, India, Aug 11 2013 (IPS)

When there is feasting in India, Pakistan and Bangladesh, there could just be a connection between the celebrations and the fires on Indonesia’s Sumatra Island that trigger frequent transboundary smog.

And when China’s population of more than a billion consumes yet more noodles, Malaysia should perhaps brace for greater air pollution.

Though not as simplistic and direct, there is nevertheless a tangible link among all these happenings and countries. It’s called palm oil, Asia’s new “liquid gold”.

Southeast Asia – read Indonesia and Malaysia – are the biggest producers of the oil obtained from the fruit of the oil palm tree, accounting for nearly 85 percent of global output.The wonder oil carries an ecological price tag.

India and China are its biggest consumers, with Pakistan and Bangladesh emerging as growing markets. As the major buyers, they not only influence price and production, but can also impact the way the oil is produced, currently controversial because of its adverse effect on the environment.

Dr Reza Azmi, founder and executive director of Wild Asia, a social enterprise in Kuala Lumpur working for sustainable tourism and agriculture, explains why oil palm has become such a hot product in Asia.

“It provides a higher source of income compared to other cash crops like paddy or rubber,” he tells IPS. Farmers can harvest bunches of oil palm fruit twice a month, while paddy can be harvested twice a year. Oil palm also produces the highest yield per area compared to other crops.

Moreover, it is cheap and used in an amazing variety of products: food from Nestle’s Kitkat to halwa, the dessert obligatory during most festivities in South Asia; a wide array of cosmetics, from lipsticks to shampoos; and biodiesel.

However, the wonder oil carries an ecological price tag.

As farmers fell trees and set fire to vegetation to clear more area for cultivation, it destroys forests and endangers wildlife, triggering smoke and recurrent hazes.

This June, Southeast Asia suffered the worst air pollution in 16 years. Smog from Indonesia choked Malaysia and Singapore. Visibility decreased, schools were closed and public programmes cancelled. Hospitals saw a rush of patients with respiratory diseases. A diplomatic row erupted between Singapore and Indonesia over culpability.

A transboundary meet in Kuala Lumpur in July saw the environment ministers of Indonesia, Malaysia, Brunei, Thailand and Singapore agree on a joint haze monitoring system. Indonesia also agreed to ratify a regional treaty to fight smog. But the fires continue to burn.

This is where China and India can play a major role by insisting on buying only palm oil produced without endangering forests.

The movement for sustainable production gathered momentum in 2004 with the formation of the Roundtable for Sustainable Palm Oil (RSPO), an industrial initiative to persuade planters to keep off primary forests and conservation areas and minimise their environmental footprint.

“RSPO-certified sustainable palm oil currently represents over 15 percent of global crude palm oil production spread over 50 countries, including Indonesia, Malaysia, and Papua New Guinea,” Darrel Webber, RSPO secretary-general tells IPS.

“A number of countries are making national commitments to sourcing only sustainable palm oil by 2015, including the Netherlands, Belgium, the UK, France and Germany,” he added.

However, the two biggest consumers, China and India, are yet to follow the trend.

“While businesses in the West are making big strides to support the sustainable production of palm oil, large volume users in India and China are yet to get on board,” says Bob Norman, general manager at GreenPalm, an RSPO associate. “If the movement is to be a global success and achieve its aims, food service companies, retailers and other volume users in Asia need to engage with this issue.”

After India, China is the second-largest importer of palm oil. The demand is expected to grow 10 percent annually, which would make China the largest market by 2015.

However, only 15 Chinese companies are RSPO members so far.

Still, Webber thinks the sustainability campaign will find more takers after RSPO’s alliance with the Chinese Chamber of Commerce of Foodstuffs and Native Produce under the ministry of commerce.

The Chinese government’s 12th Five-Year Plan (2011-2015) emphasises low carbon consumption.

India accounted for 19 percent of the global palm oil consumption in 2011-2012, more than China (16 percent) and the European Union (14 percent).

Dr B. V. Mehta, executive director at the Solvents Extractors’ Association in Mumbai estimates the Indian demand will increase by three to four percent per year as the cheap oil is used more and more in India’s food and hotel industries.

“Considering their use and import, it is imperative for Indian companies to move towards sustainable palm oil and practices,” says Webber. “By committing to source only certified sustainable palm oil, Indian companies can take a step towards ensuring future supply of clean palm oil while also taking responsibility for the global impact of their imports on the environment and the climate.”

Indian companies began joining the RSPO in 2006. Currently, there are 26 members.

Webber calls it a “strong indicator that business commitment and demand for sustainability is increasing in the country,” but Mehta says the huge population that still remains below the poverty line will pose a tough challenge.

“India supports sustainability but the poor Indian consumer is looking for cheap oil,” Mehta says. “People in the EU can afford to pay a higher price for certified palm oil but not in India, where thousands are struggling to feed themselves.”
Norman remains optimistic. “Economic prosperity in India and China has seen a rise in ethically conscious consumers,” he says. “Over time, this broader understanding and concern about the issues surrounding the production of palm oil will invariably lead to an increase in demand for food manufacturers and retailers to support sustainable production.”

Joseph Tesse’s extraction process involves the fermenting and boiling of the palm oil fruit in large steel drums. Once the oil is extracted, it is diluted and passed through a sieve and then boiled once more. Credit: Monde Kingsley Nfor/IPS

By Monde Kingsley Nfor
LITTORAL REGION, Cameroon, Jul 4 2013 (IPS)

In Maleke village, western Cameroon, an oil palm tree is considered to be “black gold”. At least, that is what Joseph Tesse, the local processor of oil palm, tells IPS.

“Every household here has a parcel of land with oil palm trees,” Tesse says of the residents in his village in Cameroon’s Littoral Region. The tree, which is indigenous to West Africa, bears a fruit that can be processed to make palm oil, an essential ingredient used for cooking here. Palms are also used to produce wine and liquor.

But while Cameroon may be the third-largest producer of palm oil, after Nigeria and Côte d’Ivoire, it has an annual deficit of the oil  for domestic consumption. More than 80 percent of the palm oil produced here by agro-industries is exported to Nigeria, the Middle East, France and other European countries, Pierre Jonathan Ngom, national coordinator of Small Holder Oil Palm Development Programme Cameroon (SOPDP) tells IPS.

According to statistics from the Ministry of Agriculture and Rural Development (MINADER), Cameroon produces about 200,000 tonnes of crude palm oil annually. Agro-industrial palm production accounts for 140,000 tonnes, while small-scale farmers produce the remainder.

“Supply for local consumption keeps falling as much of the oil produced is consumed by the processing industries and export markets. Following this trend, locally-produced palm oil has become a niche item on local markets,” Ngom says.

“The cultivation of oil palm trees is less expensive as compared to other cash crops. The use of pesticides is fairly limited and oil palm trees gives the highest yield of oil per unit area compared to other crops like soy,” Ngom says.

Smallholder farmers are rising to the challenge of meeting the country’s shortfall of local supply of this commodity.

“Oil palm trees are most resistant to drought and climate change and require little or no fertiliser or chemicals and need less care as compared to cocoa and coffee,” Deborah Mokwe a farmer from Maleke village tells IPS. She is among 200 individual oil palm tree farmers in the village.

Gladys Njeni is another. “A litre of palm oil now sells for 1.90 dollars on local markets as compared to 90 cents in early 2000,” Njeni says of the lucrative local market for the product.

Njeni is a customer at Tesse’s artisanal mill and she has brought her harvested fruit to be processed. “When I bring one tonne of ripe bunches of fruit (for processing) it produces 200 litres of palm oil, which I can sell to retailers for 180 dollars a tonne,” Njeni says.

But the extraction process at Tesse’s informal oil press mill is a slow and laborious one – even though he employs nine people to assist him.

“The work is very cumbersome, so men do the more difficult phase of the work while women do the selection of fruits and decide the form in which the produce is to be traded,” he says.

Tesse’s extraction process involves the fermenting and boiling of the fruit in large steel drums. Once the oil is extracted, it is diluted and passed through a sieve and then boiled once more.

“Artisanal production is not a sustainable way of processing palm oil. It entails a lot of waste in the quantity and quality of the oil – about 25 to 40 percent. A by-product is palm press fibre which cannot be extracted,” Alain Nkonji, an agricultural engineer with Societé Camerounais du Palm, a company involved in the production of palm oils, tells IPS.

But farmers here use this waste to fertilise their crops.

“In the 1990s, I used chemical fertiliser on my farm because it was cheap. Just before 2000, a 60-kg-bag of fertiliser was 18 dollars, but today it is 48 dollars, so I use the palm press fibre as manure,” Njeni says.

According MINADER, small-scale producers in Cameroon generate yields of less than one tonne of palm oil per hectare. But in Indonesia and Malaysia, small-scale plantations achieve yields four times those of their Cameroonian counterparts.

One of SOPDP’s aims is to increase this output, through the distribution of improved species and loans. The programme aims to increase national palm oil production to 450,000 tonnes by 2020.

“We also plan to create three pilot processing plants in major palm-oil-producing localities where farmers can process their produce at a reduced cost and minimise waste,” Ngom says.

After coming under fire from environmental and social justice organisations for violations of land protection laws, Herakles Farms, a New York-based agricultural company, has suspended a large, controversial palm oil project in Cameroon.

The announcement comes after the Cameroonian government ordered the company to halt its operations, saying the project had failed to obtain necessary permits. Critics of Herakles’s Cameroon plans are celebrating the decision as a victory for the power of local community activism, though the suspension is currently seen as merely temporary."If you think you’re going to go into an African country and do as you please to make some quick money, it now turns out you’re in over your head." -- Anuradha Mittal of the Oakland Institute

“People on the ground are celebrating, and the suspension is being viewed as recognition of the [Forest] Ministry standing up for what is right,” Anuradha Mittal, executive director of the Oakland Institute, a U.S. watchdog group that has followed Herakles Farms’ Cameroon project for years, told IPS.

“In fact, what it shows is that it’s communities on the ground that will make governments honourable – and that’s what democracy is supposed to look like. This is sending a strong message that African countries are open for business, but they’re not open for theft.”

In a 2009 agreement, the Cameroonian government authorised a Herakles Farms subsidiary to develop more than 73,000 hectares for new palm oil plantations. Much of this forestland has reportedly already been cleared, and the company says it is currently in the process of transporting saplings to the plantation areas from nurseries.

Yet local NGOs have increasingly accused Herakles Farms of ignoring community concerns and failing to comply with both court mandates and a government injunction. The company’s decision to suspend the operation now comes following a mid-April order from the Forest Ministry that the company halt a logging operation in the Cameroonian southwest.

A request for comment from Herakles on Friday was not responded to by deadline.

Ministry officials say Herakles has failed to attain two required permits, with Forestry Minister Ngole Philip Ngwesse noting Thursday that previous agreements between the company and government don’t “exempt” Herakles from following “legal procedure”.

Ngwesse said his office was forced to act following grievances lodged by local communities. Authorisation to resume operations is now based on a “declaration of public usefulness”, according to the ministry.

In announcing the suspension of work, Herakles stated that it “always has and will comply fully and transparently with government regulations in force” and that it “hopes to understand and resolve these actions” by the ministry. Noting that nearly 700 employees involved in the project could now be furloughed or laid off, Herakles said it “finds these events especially tragic”.

Need to “safeguard reputation”

Yet according to Mittal, newly released evidence of Herakles’s internal operations suggests that moving forward could be complicated for the company, which says it has invested some 350 million dollars in the Cameroon project.

“Given the other evidence that we have of the company’s mismanagement, it will be interesting to see how exactly they decide to handle this,” she says.

“After all, this could now undermine a misconceived business plan. If you think you’re going to go into an African country and do as you please to make some quick money, it now turns out you’re in over your head – and there’s no way to fix that quickly.”

Earlier this week, the Oakland Institute and Greenpeace International jointly released a report highlighting wide discrepancies between how Herakles was presenting its projects in Cameroon to investors and consumers and the environmental and social impacts on the ground.

At the heart of the issue is Herakles’s presentation of the Cameroon project in a way that emphasised its purported environmental sustainability and beneficial impact on local communities – the company even began its own development group, called All for Africa. Yet internal documents included in the report now show that executives at Herakles were aware of the legal holes in the investment.

One e-mail between company executives called the management situation in Cameroon “pathetic” with a “grossly overstaffed office”, and urged “formal approval from the government for land concession”. The e-mail also warned that the situation in Cameroon should be addressed “to safeguard Herakles investments and reputation”.

“What’s really unique about this [instance] is the web of lies and deceit,” Samel Ngiuffo, director of the Center for Environment and Development, a Cameroonian NGO, told reporters this week. “It’s not just to consumers … it’s to investors and the Cameroonian government.”

Chief among these allegations is that Herakles, despite denials to the contrary, began clearing forest and developing palm nurseries before obtaining certificates required by Cameroonian law. According to the report, some evidence suggests that the projects have been in violation of those laws since 2010.

Herakles has also touted the project’s employment potential. Its corporate website, for example, states that the company has developed a “staffing plan and will work closely with village leaders to identify and train candidates and employ as many of those seeking employment as possible.”

Yet a convention Herakles signed in 2009 allows the company to pay according to minimum wage scales “fixed on the basis of productivity and efficiency criteria”, rather than according to Cameroonian minimum wage laws.

“Small-scale farmers who are already producing cash crops like cocoa are making far more independently operating than they would be as labourers in a Herakles plantation,” Brendan Schwartz, a forest campaigner with Greenpeace International, told reporters this week.

Additionally, Herakles Capital, an affiliate company, is a member of the Roundtable on Sustainable Palm Oil, a group designed to set and monitor environmental standards for such investments. The group formally prohibits its members from using so-called high conservation value forests (HCVF), or forests designated as ecologically, economically or culturally vital, for palm plantations.

Despite this, the new report points out that the Germany Agency for International Cooperation (GIZ), among other monitoring groups, has indicated that “part of the [Herakles] concession area has to be considered as HCVF.”

Now, the Cameroonian government’s strong position on the Herakles project shouldn’t be read as an attempt to close the door on foreign investment, the Oakland Institute’s Mittal cautions.

“The ministry is not saying that Cameroon is a bad place to invest,” she says. “It’s just saying that investors need to follow the proper regulations.”