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Why Your Money May Be Driving the Palm Oil Industry's Human Rights Abuses and Environmental Destruction

Top banks, institutional investors and several major pension funds have palm oil in their portfolios.

Photo Credit: David Gilbert/RAN


If you’re an American looking to do your part to protect tropical rainforests, you need look no further than your kitchen pantry. As you’ve likely heard by now, the world’s leading killer of tropical forests is palm oil—and palm oil derivatives are in your cookies, your ice cream, your shampoo, and—I’m sorry to tell you this—in your chocolate.

While industry analysts attribute the ubiquity of palm oil to consumer demand, palm oil isn’t in all these products because you demanded it, because it’s healthy, or because it tastes good (it doesn’t). It’s there because it’s cheap. Palm oil is cheap because it’s produced by a global industry built on land grabbing, human rights abuses and environmental devastation. Along with low production costs and a growing market comes the other reason why palm oil has become ubiquitous: it gives high returns on investment.

Palm oil’s environmental footprint

Palm oil is a vegetable oil derived from the fruit of the oil palm tree, native to West Africa, and used, as of very recently, in thousands of consumer products, from baked goods and ice cream to cleaning products and biofuels. Because of its high melting point, its high yield, and its lack of unhealthy trans fats, palm oil has rapidly come to dominate the global vegetable oil market, with production projected to double again in the next decade. (About 76 percent of palm oil is used for foods, with the remainder used for industrial purposes including biodiesel.)

Nearly 90 percent of global palm oil production comes from Indonesia and Malaysia, where industry boosters argue it’s been a huge boon for the economy. World Wide Fund for Nature (WWF), the environmental juggernaut that initiated the industry-friendly Roundtable on Sustainable Palm Oil (RSPO) to certify palm oil according to environmental and social criteria, argues that palm oil has lifted millions of poor Indonesians out of poverty. But at what price?

Because palm trees do extremely well in the same conditions as rainforest, the industry’s expansion has relied on cutting and burning vast acreages of forest, draining fragile peat soils, and replacing native vegetation with palm oil monocultures. Less than half of Indonesia’s forests remain standing today, and by 2020 the Indonesian government plans to convert 45 million more acres of rainforests —an area the size of Syria—into palm oil plantations.

Indonesia’s rainforests are among the earth’s most biologically and culturally rich ecosystems, harboring the only wild populations of orangutans, Sumatran tigers and Sumatran rhinoceros. Rainforest Action Network has launched a campaign to bring attention to these critically endangered animals, especially the orangutan, of which only 60,000 wild animals remain. The organization is targeting 20 snack food companies that use conflict palm oil in their products and urging consumers to participate in their In Your Palm campaign.

The African rainforest belt is suffering from the palm oil boom as well, with millions of acres of forest being converted to plantations from Liberia and Cameroon in West Africa across the heart of the continent to Uganda and Madagascar in the east.

It’s not just animals that are endangered: the palm oil monitoring group SawitWatch has identified 663 ongoing land disputes between palm oil companies and rural communities in Indonesia, many involving private armies and paramilitaries. In Nigeria, activists have been forced into hiding for opposing palm oil expansion, and in Liberia, plantation conditions are likened to modern-day slavery. Forced and child labor are part of business-as-usual.

Last month, Friends of the Earth released a report about a lesser-known company called Bumitama Agri that sells the majority of its palm oil to Wilmar International, a Singapore-based company that controls nearly half of the global palm oil trade. The report shows how Bumitama has destroyed at least 15,000 acres of rainforest in the past decade, including endangered orangutan habitat. At least 17,000 acres of its plantation land lacks valid permits, much of it inside protected forest reserves. [Full disclosure: I work for Friends of the Earth, and worked on the report.]

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