Climate Advisers Managing Director Glenn Hurowitz appeared on Bloomberg TV to discuss the role of major traders like Singapore-based Wilmar International in creating a market for palm oil produced through deforestation and peatland burning.
Following the appearance, Wilmar CEO Kuok Khoon Hong wrote Hurowitz to announce that the company would not source palm oil from companies tied to illegal burning.
“In response to the recent haze, we further reinforce our stand by openly declaring that we will terminate our business relationship with any suppliers found to be flouting the law against forest burning. This is a strong demonstration of our effort to influence the industry.”
“Wilmar’s announcement today should help remove the economic incentive for forest burning, and they should be commended,” said Hurowitz. “The ready market for burn-based palm oil helped make this crisis possible. Wilmar’s announcement sends a message to the entire industry that the days of anything-goes sourcing are ending.”
You can watch Glenn’s interview here:
The announcement follows coverage early last week of Climate Advisers’ position that Wilmar did not do enough to discourage sourcing from burned forest land. Though Wilmar had frequently referred to a pledge not to burn forests for the palm oil it grows on its own plantations, that’s a drop in the bucket: worldwide, the company produces 1.8 million tons, but trades and processes 23 million tons. Their sourcing guidelines stated that suppliers should follow existing laws, but had little transparency or enforcement.
“Given Wilmar’s dominance of the palm oil industry, the company is uniquely positioned to lead the world toward a historic revolution that breaks the link between commodity production and deforestation,” Hurowitz said.
Wilmar’s announcement comes in the midst of an ongoing discussion about palm oil production. Forest advocates argue that significant concerns remain about sourcing palm oil from ultra-carbon rich peatlands and deforestation.
“Wilmar must continue this leadership by making their supply chain transparent, and allowing independent observers to verify their progress. Major consumer-facing companies like Kellogg’s that have bought from Wilmar want to know that their purchases aren’t driving destruction of the world’s forests and extinction of endangered species like orangutans. Wilmar shouldn’t just replace deforestation by fire with deforestation by bulldozer.”
Wilmar’s policy change was covered in an update by Businessweek, quoting The Forest Trust.