The giants who had no hearts in their bodies

How some of palm oil’s biggest players are actively working against reform.

Fairy tales, like the Norwegian story The Giant Who Had No Heart in His Body are meant to teach us that no good comes of greed, and that redemption is always possible for bullies who choose to change. The Indonesian palm oil industry’s history reads like a scorched-earth rampage by an uncaring fairytale giant, but thanks to global village outrage, some companies have faced a moral (and market) reckoning. They have begun to halt forest destruction and address their conflicts with local communities. Will the rest follow their lead, or stab them in the back?

Peat forests, such as this one cleared and burned this April in Riau despite a moratorium, will remain at risk as long as giant palm oil traders refuse to implement full supply chain traceability.

There’s a sharp divide amongst Indonesia’s biggest palm oil producers and traders. On the one hand are the companies making strong commitments to clean up their palm oil production. At times they are struggling to deal with their legacy of deforestation and social conflict, but at least they’re making a genuine attempt to change their ways. Against them stand a handful of giant companies stuck in the past – and increasingly isolated.

Here are some of the ways in which forward-looking companies are trying to transform the palm oil industry. Agropalma, DAABON and New Britain Palm Oil have joined forces with NGOs and developed a vision of what responsible production looks like with the Palm Oil Innovation Group Charter. Golden Agri Resources helped develop the High Carbon Stock Approach, a ground-breaking methodology to identify and protect forests inside its concessions. Palm oil trader Wilmar was the first to commit to stop buying and selling from companies destroying forest and peatlands. Other commodity traders, including Cargill, Asian Agri and Musim Mas have since followed.

And then there are the companies that could have joined this movement, but have decided to continue their devouring ways. IOI, KLK and Sime Darby are some of the most prominent members of the Roundtable on Sustainable Palm Oil. But while other members are identifying and protecting the forests in their concessions, these three are undermining those positive efforts by trying to weaken forest protection policies and arguing that there are some types of rainforest that they should be allowed to destroy.

When NGOs called them on this, these companies claimed they would put forest destruction on hold. But reports from the field tell a very different story.

Last June, the CEO of IOI told us that his company would stop clearing forests and peatlands in its PT BSS concession in Western Kalimantan. But despite this unambiguous commitment, IOI’s bulldozers have carried on regardless. Recently a formal complaint was submitted to the RSPO about IOI, accusing it of violating the RSPO’s rules by clearing forests and not resolving its conflict with communities.

Cleared orang-utan habitat ready for palm oil planting inside a concession owned by PT Karya Makmur Abadi Estate II, a subsidiary of KLK group, seen on 25 Feb 2014.

KLK also promised to stop clearing forests – but it has kept its bulldozers on stand-by. The company refuses to give up its claim to land in Collingwood Bay, Papua New Guinea, even though indigenous communities have refused their consent and the development would mean violating its commitment to protect natural forest.

And what of Sime Darby, the world’s biggest palm oil producer? Despite its size, this giant has yet to take up a leading role in transforming the industry. Worryingly, Sime Darby just bought New Britain Palm Oil, one of the most progressive palm oil producers. Yet Sime Darby has not vowed to adopt NBPOL’s environmental practices, and the fear is it could drag New Britain down to its level.

In life, as in fairytales, justice is never far away. It’s time for these giants to change their ways, if they don’t want to be punished by the growing market demand for ethical commodities. We challenge them to take up a leadership role and join their peers in transforming this troubled sector. Until these companies commit to ending deforestation and respecting local communities’ rights and livelihoods they – and anyone buying palm oil from them – are part of the problem.

Suzanne Kroger is the Global Palm Oil Coordinator at Greenpeace International.