Will Wilmar's stricter environmental controls bear fruit?

SINGAPORE (Dec 11): Wilmar International last week signed a joint statement with Aidenvironment Asia, a not-for-profit consultancy in the field of sustainable production and trade, to reaffirm its commitment to “break the link between oil palm cultivation and deforestation, peatland development and social conflicts”.

The Dec 7 document was primarily signed between Wilmar chairman and CEO Kuok Khoon Hong and Eric Wakker, Aidenvironment’s co-founder.

It comes with Wilmar’s plans to immediately suspend suppliers found involved in deforestation or new development on peatland from Jan 2019, under plans to continue implementing its ‘no deforestation, no peat, no exploitation’ (NDPE) policy.

This is also when Wilmar will begin enforcing its new grievance approach to suspend, then engage its suppliers using a database jointly developed with Aidenvironment to spot deforestation or development on peat using high-resolution satellite monitoring.

To determine the extent of non-compliance during the monitoring process, Wilmar intends to develop a high-resolution forest cover and peatland baseline maps for 2016 onwards, beginning with Indonesia and Malaysia, by 2019.

Following the suppliers' immediate suspension, the group then plans to engage them to bring their operations into compliance with the NDPE policy, under a re-engagement protocol which it intends to publish by 1Q19 to specify a time-bound process, which includes terms and conditions to resume sourcing.

Going forward, Wilmar says it will report clear information about the progress of its suppliers, at the group level, regarding its NDPE policy as well as the accuracy of concessions maps and updated on the group mapping database, among others, starting from 2Q19.

“We will make progress in moving the industry through the implementation of these stricter controls. However, our efforts may continue to be undermined by a growing ‘leakage market’ whereby errant suppliers and traders continue to resist the need to change as they face limited pressure after they have been placed outside our sphere of influence,” said Wilmar and Aidenvironment in their joint statement.

“Thus, we call upon NGOs together with other downstream industry players to accelerate pressure on these non-compliant suppliers to commit to and implement NDPE policies. It is only through such collaborative, multi-stakeholder actions that we can ensure that the entire palm oil industry moves towards long-term sustainability commitments and goals that will result in the assurance of deforestation-free supply chains.”

Palm oil has longed been blamed or a litany of environmental and socioeconomic woes, with some consumer brands vowing to go palm-oil free by 2030.

This week in The Edge Singapore (Issue 860), we discuss how such moves may, in fact, hurt sustainability efforts as there are myriad drawbacks to consider. Login to read our latest cover story Palmful of problems, or click here to subscribe.