“Zero deforestation” supply chains tainted by illegal palm oil from Sumatra, as demand exceeds supply of clean produce

Wednesday, July 25th, 2018

An investigation in Sumatra has exposed, again, that major palm oil traders are sourcing palm oil produced illegally in the island’s heavily threatened and biologically valuable protected areas.

The supply chain investigation, by the NGO coalition Eyes on the Forest, found that the four major Indonesian palm oil traders – Golden Agri Resources, Musim Mas, Royal Golden Eagle and Wilmar – were buying produce from mills sourcing, in turn, from the Tesso Nilo and Bukit Tiga Puluh landscapes.

Palm oil from these areas is flowing into the supply chains of leading consumer goods firms with so-called “zero deforestation” commitments, including Mars, Nestle and Unilever.

Eyes on the Forest concluded that the problem was the over-reliance of firms trading and using palm oil in vast quantities on third-party suppliers. The coalition reported that refining capacities far exceed the supply of raw material that “comply with government regulations and with the companies’ own zero deforestation policies”.

It added: “Lack of traceability and the common practice among the [major traders] and others to buy and sell palm oil products to each other led to widespread contamination of the global supply chain.”