In a major announcement signaling a transformational shift in the global palm oil market, agribusiness giant Cargill adopted a new commitment for its palm oil supply chain: an end to deforestation, peatland destruction and community and worker exploitation. Advocates said a meaningful implementation plan is critical to success.
“Cargill’s new commitment is a big deal,” said Climate Advisers Managing Director and Forest Heroes Campaign Chair Glenn Hurowitz. “By committing to only produce, trade and sell responsible palm oil, it is joining other industry leaders in a global transformation to agricultural growth that protects forests and community rights. Today’s announcement is good news for tigers, orangutans and everyone who values the world’s last great forests.”
Cargill is the largest importer of palm oil into North America, and is responsible for a significant amount of the global palm oil trade. Kellogg’s, General Mills, Nestlé, Pepsi, Mars, Ferrero Rocher, Mondelez and many other major brands have committed to only using deforestation-free palm oil. Cargill is also a major supplier to the doughnut sector—the most visible user of palm oil in the US—increasingly under pressure from consumers and forest advocates to adopt responsible purchasing standards for palm oil.
Today’s pledge moves Cargill toward the new benchmark for responsible sourcing of palm oil, set by agribusiness competitors like Wilmar International and Golden Agri-Resources that together control most of the world’s supply. Cargill will need a detailed implementation plan and also needs to verify rapid compliance or termination of problematic suppliers such as Kuala Lumpur Kepong Bhd (KLK), which a Businessweek investigation found uses forced and child labor to toil on its plantations. It also should take further action to reduce use of hazardous pesticides and to treat methane emissions from palm oil mills, a globally significant source of climate pollution.
Palm oil is a $50 billion a year commodity. It is in half of all consumer goods on the shelves, but is too often grown by clearing tropical forests for oil palm plantations. That threatens the lives of tens of millions of people who depend on rainforests to survive – and pushes species like Sumatran tigers and orangutans to the brink. Clearing carbon-rich peatlands also sends huge amounts of carbon pollution into the atmosphere.
“Cargill should now turn to meaningful, fast and transparent implementation to deliver on the promise they made today,” said Hurowitz. “Through its involvement in the Brazilian soy moratorium, Cargill has already proven that it’s possible to eliminate deforestation while increasing production. Now they need to extend these no-deforestation principles across all of their commodities, such as soy, sugar and cattle.”
Palm oil is not the first time Cargill has engaged on the sustainability impact of its commodity business. A few years ago, a quarter of Amazon deforestation was driven by soy production. But after feedback from customers like McDonald’s, Cargill became a leader in establishing a moratorium on new forest clearing. As a result, deforestation in the Brazilian Amazon declined from 25 percent for soy to 0.25% in just three years; and soy production kept increasing as growers planted on degraded lands instead of pristine forests. Today’s move could help translate into significant similar progress in the palm oil sector, and provide momentum to continue the soy moratorium.