Corporate giants exposed to palm oil sourced from illegal clearances of Sumatran rainforest

Tuesday, July 25th, 2017

Aerial view of recent land clearing by PT. Agra Bumi Niaga in East Aceh, Indonesia. Image courtesy of the Rainforest Action Network.

Some of the world’s biggest companies including Pepsico, Mars, Unilever and Nestlé may have sourced palm oil from illegally deforested land on the Indonesian island of Sumatra.

A study by the Rainforest Action Network (RAN) used satellite data, photographic evidence and GPS coordinates to chart ongoing illegal clearances of primary rainforest in the Leuser ecosystem, in contravention of a moratorium imposed on deforestation of the 2.6m hectare wilderness in June last year.

The study shows how palm oil grown on land that was illegally cleared by the logging company PT Agra Bumi Niaga (ABN) may have ended up in the products of some of the world’s biggest brands. It pinpoints that ABN illegally cleared 336 hectares of rainforest between June 2016 and April 2017, part of a corridor of lowland forest essential for the survival of critically endangered Sumatran elephants.

PT ABN delivers fruit to nearby crude palm oil processing mills owned by PT Koperasi Prima Jasa (KPJ) and PT Ensem Sawita (ES), which sell on to some of the world’s biggest palm oil traders, including Wilmar and Musim Mas.

Unilever admitted to the Guardian that it had indirectly bought palm oil from PT ABN through Wilmar and Musim Mas, saying it had requested an “action plan” from the palm oil giants. Nestlé said that it was investigating the allegations with Wilmar, which is sending a team to assess whether other sources in its supply chain were using palm oil originating in PT ABN’s 2,000-hectare concession. Mars and Kellogg’s stressed their sustainable palm oil policies, while McDonald’s denied any links to PT ABN. Cargill and Musim Mas said they were investigating the reports.

Most of the firms implicated have sustainability policies that highlight the importance of traceable supply chains. PepsiCo’s sustainability policy aims to establish “clear agreements with customers, suppliers, and sub-contracted producers.” Unilever’s Sustainable Living Plan states the firm is “committed to sourcing 100% of agricultural raw materials sustainably […] Knowing where our raw materials come from enables us to work with others to co-create responsible standards.” Nestlé has a Responsible Sourcing Traceability Programme which “promotes transparency in our extended supply chains back to the farm or feedstock, implementing our commitments on no-deforestation.”

Leuser is among the world’s most biodiverse ecosystems, encompassing 6.5 million acres of lowland tropical rainforest, peatlands and mountains.

In response to deforestation within Leuser, Indonesian President Joko Widodo announced a moratorium on new palm oil permits in April 2016. Two months later, the governor of Aceh ordered palm oil companies to cease all forest clearances. RAN’s investigation indicates that ABN has illegally cleared another 336 hectares of rainforest since June 2016.