NGOs and Private-Sector Sustainability Leaders Diverge on Deforestation

By June 15, 2015Blog

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By Achmad Rabin Taim from Jakarta, Indonesia, via Wikimedia Commons

By Achmad Rabin Taim from Jakarta, Indonesia, via Wikimedia Commons

In April, I traveled to Washington, D.C. to attend “How Business Can Tackle Deforestation,” a conference hosted by Innovation Forum, a London-based organization that convenes organizations around sustainability trends and opportunities for business. The two-day event focused primarily on issues and opportunities related to palm oil, a $40 billion industry which relies almost entirely on converted rainforest land in Malaysia and Indonesia, two of the most biodiverse countries on earth. Though palm oil is in so much of what we consume—in packaged food (like Nutella, peanut butter, and potato chips) and beauty products (lipstick, even shampoo) and laundry detergent—we often have no idea we are consuming it. This trend is expected to continue; the UN predicted in 2011 that demand for palm oil would double by 2020.1  

New standards established within the palm oil industry over the last year, combined with activism to raise awareness of harmful practices, have all led to greater scrutiny of the industry as it faces increased demand to expand from markets around the world. I became interested in the topic of oil palm agriculture after visiting Indonesia last summer and driving by hectares of plantations on its rural island of Sumatra, seated beside protected primary forest areas that house some of the world’s most dense primary rainforest. The intersection of the industry’s challenges with regard to ecology, agriculture, food system sustainability, and nutrition make it particularly relevant within the sustainability space.

The Innovation Forum conference underscored many of my (incorrect) preconceptions about the industry and about notions of sustainability within the private sector:

  1. I had assumed that sustainability officers of environmentally-minded companies would be the ones to appeal to their senior leadership on behalf of causes championed by NGOs. Instead, there seemed to be a fair amount of disagreement between the two groups over many issues, including labor rights, local preferences, and the ‘wider context’ of factors that drive decisions affecting forests in areas where oil palm is cultivated.
  2. Market-based mechanisms appear to rule decision-making in international agriculture, in a manner far more effective than any set of standards, local laws, or international mandates, giving private enterprise a disproportionately powerful role in a part of the world where regulations are easily skirted and corruption is more of a norm than an exception.
  3. Private companies are not all created equal. Some are doing way better than others to minimize deforestation of primary forests in order to expand production of palm oil. While this might be due to the growing pressure from buyers of palm oil, as well as from consumers, it remained unclear to me why some were making much larger efforts than others.
  4. Local stakeholders are not always supporters of the more responsible companies. One of the representatives from one of the biggest agribusinesses in the world told a story about turning down the opportunity to develop 2,000 hectares of rainforest land described as ‘ideal’ for deforesting in order to plant oil palm trees. The local government responded to the company’s effort to protect the local habitat by blocking the local access road in protest. The parcel of land was promptly sold to a local logging company instead, which deforested the whole swath of forest.
    Palm Fruit by World Bank Photo Collection, on Flickr

    Palm Fruit by World Bank Photo Collection, on Flickr

In scenarios where many factors may work against goals consistent with environmental stewardship, a company committed to minimizing harm may be the local habitat’s strongest advocate, even as it works to expand its production and economic gain from the local area. There appeared to be significant variation in how much action companies take in minimizing their environmental impact, a fact acknowledged more readily by the NGO community than by the companies themselves.

We should not have to rely on companies choosing to take on these issues voluntarily: corporations should be incentivized to augment their engagement of sustainability issues through policy changes and consumer demand. Governments should demand more comprehensive implementation plans from companies that promise zero-deforestation or other reforms. Specific metrics should also be established in order to measure the success of implementation, rather than let ‘change’ begin and end with a statement or promise.  Such changes may come slowly and I left the Innovation Forum conference feeling as though working for a company willing to be a first mover might be the most enduring way to effect positive change.

The conference adhered strictly to the Chatham House Rules, which means that this summary omits the names of any organizations or individuals represented at the event.



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