Q&A: The changing face of the global palm oil industry

"The Journey" video that GAR recently released shows their work in action through individuals like Yatimin, a farmer from a village in Borneo. Video by: GAR

BARCELONA — The mere mention of palm oil conjures images of large-scale, industrial plantations causing deforestation, land erosion, and river pollution — which in turn contributes to climate change, human displacement, biodiversity loss, and the destruction of animal habitats.

In recent years, however — following intense scrutiny — organizations and businesses within the sector have tried to engage in efforts toward sustainable transformation, implementing new policies, partnerships, and practices aimed at ensuring both people and planet are front and center of any palm oil production efforts.

“For a long time, the face of palm oil has been the face of an orangutan and it’s been a very compelling and powerful one, but there are also 16 million other faces whose lives are centered around palm oil production who are looking to do good, who want to be able to feed a family, and earn a living,” explained Anita Neville, vice president of corporate communications and sustainability relations at Golden Agri-Resources, one of the world’s largest palm oil plantation companies.

Despite its negative perception among consumers, Neville said that when asked, smallholder farmers still often choose to plant oil palms because they see a high return on their investment. That, combined with the product’s ubiquity in everyday items — from foods to cosmetics, cleaning products, and fuels — means long-term demand for palm oil remains high. A sustainable and responsible approach is the only way forward, but are the steps taken so far enough to warrant a reputation overhaul?

“The reality is that palm oil has the reputation of being large-scale, industrial agriculture. In real terms, that image is quite false.”

— Anita Neville, vice president of corporate communications and sustainability relations, Golden Agri-Resources

“While there are still negatives to overcome, there are also very many positive stories about the benefits that palm oil can bring — like the kinds of job opportunities in communities and the essential qualities that palm oil as a naturally produced oil has,” said Neville.

Sitting down with Devex, she explained what the industry has done to address criticism, what still needs to be done, and where the global development community can contribute.  

This conversation has been edited for length and clarity.

Talk us through the sustainability transformation underway in the palm oil industry in places like Indonesia — what’s the state of play?

Around 2009-10, palm oil came under intense scrutiny from the NGO community — predominantly around deforestation in the tropics and specifically in countries like Indonesia. It’s fair to say that the industry as a whole had been relatively slow to respond to increasing consumer understanding and awareness around sustainability issues, to look at their track record, and determine what they should be doing.

That actually started changing through GAR’s efforts in relation to deforestation, when we created our forest conservation policy back in 2011 — a first in the sector and really a recognition that practices within the industry weren’t keeping pace with international markets, or indeed reality. This transformation has been underway ever since.

We see it as an essential business component. The key, for an organization like ours, is how to work with people who are directly and indirectly connected to our business and to help them make the changes that the market is now demanding of us.

What do you say to palm oil’s detractors, who often decry industrial-scale production given that it’s ubiquitous in everything from food to personal care items, cosmetics, and even fuel?

I remember very clearly when I spoke to my now 12-year-old son about it and he said to me, “I don’t know Mum, I’ve heard about this palm oil stuff and I'm not sure it’s any good.” I found myself really thinking: “Why do I want to work in this sector and what is the challenge that we face?” The reality is that palm oil has the reputation of being large-scale, industrial agriculture but in real terms, that image is quite false. There are a lot of small- and medium-sized players in this sector — of course, there are large players, but in real terms, it’s an industry that is very much driven by people and by communities.

In Indonesia, close to 16 million people are directly or indirectly involved in the palm oil industry. Far from being industrial or inhuman, it’s a very human-centric industry and that’s why we want to detail the human stories of palm oil in the communities in which we operate and show the daily lives as people who use the product. We are doing this through our Extraordinary Everyday campaign. 

What is the biggest challenge in implementing sustainable production practices in the palm oil sector?

Mindset change is the biggest factor. Working in commodities, there can be a lack of education around more beneficial agricultural practices that we work to improve when working with smallholder farmers.

“The Journey” video that we recently released shows our work in action through individuals like Yatimin, a farmer from a village in Borneo — where GAR operates — who is benefitting from training on how to better support his family. He took part in an education program on organic farming that allows the community to look at what the pinch points are and what things we could do differently to help them improve their livelihoods alongside what palm oil brings to the community.

One of the key challenges we identified within these communities was around nutrition and different kinds of food not being available to them.

The community also identified a lack of alternative proteins as an issue, so we helped them build a fish farm and provided goats. That has seen real improvement in their livelihoods and income generation. In fact, Yatimin managed to double the amount of vegetables he was able to grow and secured a supply for his own family. He's also been able to increase his monthly income from 1 million rupiah, or $70, to 2.5 million rupiah, or $170. These kinds of programs help us to change people’s behavior and enables us to see the real improvement in the lives of the people in the communities where we operate in Indonesia.  

In Indonesia, close to 16 million people are directly or indirectly involved in the palm oil industry. Photo by: GAR

How is GAR helping to improve sustainable practices, support community development, and drive improved nutrition through the people working along the palm oil value chain?

I mentioned our policy that was implemented in 2011, but in many ways, the sustainability journey of GAR starts as early as 1997, when we established the first zero burning policy in Indonesia after those horrendous forest fires. We’ve been on an evolutionary path since.

In practical terms, it was important we got our own house in order before saying to our third-party suppliers to do the same. Implementing the first conservation policy, identifying what forests we wanted to set aside for a forest conservation policy, working through our own practices to improve those, and being able to take those experiences out to our suppliers has been important.

Within the communities in which we operate, GAR aims to be at the heart of the family, and we see ourselves as a partner in their success. In these rural communities, education is the key to breaking the cycle of poverty. That’s why we support 239 schools and employ over 2,050 teachers, who in turn teach around 35,000 students in Indonesia. In many cases, going back decades, had a company like GAR not been in that area, there wouldn't have been that infrastructure and that facility available. Some of the earlier schools we built back in the ‘80s have now been folded into the government infrastructure.

Looking ahead, what’s your key message in terms of what’s needed to encourage and enable more people within the industry, especially smallholders, to adopt improved practices, delivering better yields with less impact on the environment?

The initial trigger for changing the palm oil sector was environmentally driven. That was right, but what we need now — and where I think the development community has an opportunity to engage in this process of transformation — is in-country capacity building programs to help Indonesians deliver a more sustainable and responsible future for themselves.

I think I speak for many of us in the palm oil industry when I say we're really looking for partners who can help us undertake this challenge. We are great at growing palm — we really understand the farming component — but we’re on a learning curve around how we can create meaningful, long-term programs to change rural communities.

I would encourage those in the global development community who have perhaps been wary of palm in the past to look again. There are some committed professionals there and we need help.

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