2020 was supposed to be the year that companies eliminated deforestation from their supply chains. Over the past decade, more and more companies, along with their investors, have labeled deforestation as an important ESG risk and forest loss as a major contributor to climate change. Being tied to commodity-driven deforestation could lead to many detrimental setbacks for companies, such as reputational damage, suspensions from buyers, regulatory pressure from consumer countries, and material financial losses. Key industry players have responded with commitments to reduce exposure to deforestation and increased their transparency.
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Since 2015, Forest Heroes has assessed the actions of companies in their efforts to adhere to deforestation standards and policies in the palm oil and soy sectors around the world in our “Green Cats” report. In the regions where the last wild endangered tigers thrive– often overlapping with palm oil production– and in the habitats where threatened jaguars live where soy production takes place, we provide analysis on company actions by examining publicly available data to find gaps between policies and progress. By comparing these palm oil and soy production– which sit at the nexus of food production, deforestation, and climate change– we have been able to ascertain which companies are making progress toward achieving globally-recognized policies to reduce their impact on deforestation.
This year was defined by companies’ traceability and transparency policies. These two characteristics provided authenticity for corporations and investors, dividing those who performed well from those who did not. Since companies are only capable of managing their deforestation, peatland conversion, and labor exploitation risks if they transparently measure and monitor their supply chains using traceability, those who prioritized these aspects achieved better outcomes than those without distinct visibility.
The Green Cats 2018 update– Green Tigers for palm oil production and Green Jaguars for soy production– has added one more company to our palm oil analysis for a total of 22 companies, and two more companies to our soy analysis for a total of 7 companies.
Since 2013, an increasing number of the world’s largest agricultural commodity companies have committed to addressing the deforestation impacts that occur in the supply chains associated with the agriculture commodities they produce, refine, transport, and sell. Hundreds of companies have signed pledges to avoid deforestation, to stop the destruction of carbon-rich peatlands, and to cease labor exploitation. These business-as-usual policies are called No Deforestation, No Peat, No Exploitation (NDPE). The Green Cats 2018 update assesses these NDPE policies along with each agriculture commodity giant’s approach to transparency and traceability of their agriculture products associated with deforestation, peatland destruction, and labor exploitation.Read More »
New Alliances, Creative Campaigns
A FOREST HEROES BRIEF
Forest Heroes’ newest report, “Behind the Global Curve: A Scorecard of the Latin American Palm Oil Sector” rates the transparency and corporate policies regarding social and environmental practices of 26 companies in Latin America. The Scorecard highlights alarming trends in the region and details steps that compares must take to safeguard the environment and the rights of workers and local communities. With an average score of 13 out of 100 it is clear that Latin America’s palm sector is well behind the global curve in terms of social and environmental policies and practice. Read more here .
El informe más reciente de Forest Heroes, “Boleta de Calificaciones: El retraso de la industria del aceite de palma en América Latina,” califica la transparencia y las políticas corporativas con respecto a las prácticas sociales y ambientales de 26 empresas en América Latina. La boleta destaca las tendencias alarmantes en la región y detalla los pasos que se deben seguir para salvaguardar el medioambiente y los derechos de los trabajadores y las comunidades locales. Con una puntuación promedia de 13 sobre 100, está claro que el sector de la palma en Latinoamérica se encuentra por detrás de la curva global en términos de prácticas y políticas sociales y ambientales.Read More »
New Alliances, Creative Campaigns
A FOREST HEROES BRIEF
Increasingly the global palm industry is training its sights on a new frontier: Latin America.
Southeast Asia is the world’s biggest supplier of palm oil, a commodity that has found it way into everything from consumer foods to biofuels. This business boom has been accompanied by massive deforestation and human rights abuses, making palm an intense focus for environmental campaigners worldwide and resulting in corporate zero deforestation policies and commitments by major global traders and buyers in the palm oil supply chain.
But the Latin American palm oil sector is a different story, with different challenges and different opportunities. Palm oil has been a minor commodity in the region for years, often promoted by development agencies and governments as a “replacement crop” to stem coca cultivation as part of the “War on Drugs.” However, since 2001, palm oil production has doubled. The Roundtable on Sustainable Palm Oil (RSPO) has set up a regional office and more and more Latin American-owned and operated businesses are seeking to enter the global market through RSPO membership and/or certification.
Despite this expansion, the Latin America palm sector remains largely a black box. What is clear is that it is well behind the global curve in terms of deforestation and human rights policies and practices with very few Latin American companies boasting No Deforestation, No Peat Burning and No Exploitation (NDPE) policies and even fewer actually implementing them.
Unique Factors: Market, Corporate Structures & Context
The overall lack of acceptable corporate policies, transparency and implementation accountability mechanisms is likely due at least in part to three unique characteristics of the Latin American market, corporate structures and overall context that have kept the sector relatively insulated from demands by campaigners and international buyers.
Where companies have been the focus of international campaigns, as in the case of Reforestadora de Palmas del Petén, S.A – Repsa (a subsidiary of Grupo Olmeca) in Guatemala and Grupo Palmas (a subsidiary of Grupo Romero) in Peru, policies have often followed — albeit not necessarily accompanied by implementation or an end to environmental or human rights abuses. But traditionally effective targeting and pressure campaigns against bad actors in the region can be an uphill battle for three primary reasons:
- The Latin American palm oil market is largely domestic or regional in nature. A 2015 U.S. Agency for International Development (USAID) repot notes that at that time all Peruvian crude palm oil is produced for domestic consumption. With some notable exceptions, exports tend to be regional as well. For example, palm oil is Central America’s biggest export to Mexico, comprising 24 percent or exports overall. Almost half (44 percent) of all Central American palm oil went to the Mexican market in the first three quarters of 2016. Major international consumer brands – the ones most vulnerable to global campaigns and most likely to have strong environmental and human rights corporate policies on the books – are simply less active in these supply chains and therefore less able to exert the type of pressure to improve conditions.
- Palm production companies are mostly privately-held, often family-owned and in many cases subsidiaries of powerful and politically connected national conglomerates. A majority of Latin American palm producers are privately held companies, many family-owned. This means that their level of transparency and the ability for civil society to understand their operations is much lower than is the case with companies that are publicly traded on national or international stock exchanges. Palm production businesses are also frequently part of larger, vertically integrated parent conglomerate groups. In some cases, the parent group is buying and selling to itself through various subsidiaries. In the most extreme cases, as in Peru, these larger conglomerates essentially control large portions of the national palm supply chains from input to export, creating monopolies. When the seller and the buyer are the same company, it renders many traditional supply chain pressure tactics moot.
- State corruption and violence against environmental, land and human rights defenders is endemic. Of the top ten palm producing countries in the region, only one (Costa Rica) is not ranked as “highy corrupt” by Transparency International. Most of them have long-histories of land rights conflicts, civil wars and impunity for violence committed against communities and human rights activists. Local, regional and national governments often collude with companies in abuses. In Colombia, violent government-affiliated paramilitary outfits worked to forcibly evict people to clear land for palm growers such as in the case of Poligrow. In Honduras, the world Bank’s International Finance Cooperation has investigated Dinant Corporation for allegations of murders of at least forty individuals linked to its palm oil plantations, security personnel and sub-contractors. These are, unfortunately, not extreme outliers, but instead examples of “business as usual” in the region. The frequency and consistency of violence has earned Latin America the dubious distinction of being the most dangerous region for environmental defenders. Key palm-producing countries Brazil, Colombia, Guatemala and Honduras all rank in the top ten for murders of defenders. Simply put, campaigning often carries an unacceptably high risk of violence against local communities and their leaders.
What Can Global Civil Society Do?
Given the uniqueness of the Latin America palm sector, global campaigners and allies will need to find new and creative ways to work on this issue. It is also essential for global environmental campaigners to deepen alliances with the local and international human rights groups that have a longstanding presence in the region. Three immediate responses to the challenge of achieving zero deforestation and no exploitation in the palm sector in Latin America include:
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- Investing in Getting More, Better Information. The global community should be shining a bright light on the sector in Latin America, doing more research to understand how it works, who the players are and how they are connected to political and financial systems both in-country and at the regional and international level.
- Designing Creative, Non-Traditional Advocacy Campaigns. Campaigners must be talking to and learning from human rights colleagues who have decades of experience with winning campaigns in the region and on-the-ground. This also means a potential focus away from traditional corporate campaign pressure points such as globally known brands and toward a focus on regional and national household names as well as hitherto relatively unexplored financial sector connections.
- Supporting Human Rights Defenders. Human rights violations go hand and hand with environmental devastation and in Latin America are often the necessary precondition for environmental destruction. Given the dangers faced by communities who oppose corporations seeking to grab land through unlawful and unethical means, more human and financial resources must go directly to protecting human rights and environmental activists on-the-ground.
Many of the world’s agriculture commodity companies have expressed a recognition of the damage caused by unsustainable policies – and hundreds of companies in agricultural supply chains have signed pledges to avoid deforestation, destruction of carbon-rich peatlands and exploitation of local communities. These “NDPE” pledges (No Deforestation, No Peatland, No Exploitation) now cover some of the world’s largest firms. But commitments require action.
Forest Heroes has augmented our previous Green Tigers report to go beyond the promises made by 26 companies – 21 in the Southeast Asian palm oil sector previously covered by Green Tigers, and five in the Latin American soy sector which we have named after a New World cat, the “Green Jaguars.” Our goal with our Green Cats report is to shine a light on their actions, examining publicly available data to find gaps between policies and progress. By comparing these two critical sectors at the nexus of food production, deforestation and climate, we have been able to learn some interesting lessons about what works, and what doesn’t.
South American soy production is heavily concentrated among four companies – Archer Daniel Midlands, Bunge, Cargill and Louis Dreyfus. A fifth, Brazilian company Grupo Magi, is also a major player. The Southeast Asian palm oil market, by contrast, is significantly more fragmented, with 30 companies each managing a land bank of a hundred thousand to a million hectares mostly spread across Indonesia and Malaysia. While our analysis compares these industries side-by-side wherever possible, we adjusted several criteria to account for unique aspects of the production and geographies of the industries.
Note: This report is based on analysis of data that was accurate as of September 2016. Since then, many companies have set new policies including Sime Darby and IOI Corporation. Forest Heroes will soon release a new scorecard based on similar criteria, with a focus on human rights.Read More »
Instant noodles are cheap, delicious, and a key to ending destruction of much of the world’s last remaining rainforests. From the college student’s humble bowl of ramen to a midafternoon workplace snack to a young family’s fast and easy dinner, instant noodles are made with more palm oil by weight than any other product on the shelves.
Too often, ramen sold in the United States is made with palm oil grown by cutting down tropical rainforests – adversely impacting communities, destroying ecosystems, unleashing climate pollution and pushing animals like orangutans and Sumatran tigers to the brink of extinction. It doesn’t have to be that way. Forest Heroes believes that Americans deserve Rainforest-Safe Ramen.
There are four big companies that together dominate the U.S. instant noodle market: Toyo Suisan, Nissin, Nongshim, and Sanyo Foods. All four companies now have unprecedented access to rainforest-safe, responsibly sourced palm oil – but not one has committed to ending the purchase of palm oil from deforestation, carbon-rich peatland destruction or community exploitation.
American instant noodle lovers should demand better. If we can convince these four companies to do their part to end rainforest destruction, for the products they sell in the U.S. and around the world, we can drive change on a global level. Learn more at the new Forest Heroes campaign, Americans for Rainforest-Safe Ramen.Read More »
Statement of Scott Paul
Director, Forest Heroes CampaignRead More »
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Forest Heroes joined an international coalition of environmental and human rights groups in calling on hundreds of global brands and traders to drop their ties to controversial palm oil supplier IOI Group. Continue ReadingRead More »