Top palm oil producers said the industry was making strides towards transparency and sustainability across its supply chain despite campaigns against use of the oil.
Campaigners said that the industry was responsible for deforestation of tropical rainforests and human rights abuses and have initiated boycotts of palm oil.
However, such campaigns are hindering the industry’s efforts to achieve sustainability certification and develop a market for certified sustainable palm oil (CSPO), top palm oil producers said during the Reuters Next conference.
The panellists said sales of more expensive sustainable palm oil, certified by bodies including the Roundtable on Sustainable Palm Oil (RSPO), were still lacking.
“The supply of CSPO outstrips demand by a factor of two. Even if you are certified, it does not necessarily mean you’re able to get that to the market,” Mohd Haris Mohd Arshad, managing director at Sime Darby Oils said.
Sime Darby Plantation is the world’s largest palm oil company by land size and the largest producer of CSPO.
Indonesia and Malaysia, which together account for 85% of global output, in particular, have come under fire for clearing biodiversity-rich rainforests.
The US last year banned imports of palm oil from Malaysian producers Sime Darby Plantation and FGV Holdings. Mohd Haris said there was not a systemic problem.
“The palm industry is a very large industry so yes, you can have a few bad apples, but does it mean that it is a systemic issue and the systems are not in place?” Olivier Tichit, director of sustainable supply chain at Musim Mas, said.
“The issue is how do we regain the trust we seemed to have lost?” said Tichit, adding that the industry has a high level of transparency compared to other commodities.
To boost their green credentials, both Malaysia and Indonesia have implemented national sustainability standards, but NGOs said these were not stringent enough.
“We can’t afford for people to continue undermining efforts to get certification, because for everything that we do it seems like it is one step forward and two steps back. It will disincentivise others to get on board,” Mohd Haris said.
The palm oil industry has been linked to forest fires in Indonesia where in 2019 at least 1.6 million hectares of forest and other land were burned and losses were estimated at US$5.2 billion as a choking haze blanketed the region.
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