Sumatra smog and the familiar smell of denial.
As record-breaking haze from the fires in Sumatra choked Singapore and Malaysia last month, the immediate reaction from most palm oil plantation companies was that ‘it’s not happening in our concessions; it’s independent smallholders, so we can’t control it’. Denial of responsibility is the first phase of any company’s response to problems in their supply chains – apparel brands had the same reaction when reporters discovered child labour and 80-hour workweeks in supplier factories in the mid-1990s: we don’t own the factories, so we can’t control what goes on there.
But as the apparel brands came to learn, problems faced by your independent suppliers are, actually, your problems too. The oil that will eventually come from the land which is burning today will make it into your mill and into our products. As rates of asthma and lung problems inevitably rise across the region, plantation companies will start feeling the pressure to stop shifting blame and actually take action to fix the problem.
What if . . .
It’s easy to say that the fires are the fault of the hundreds of thousands of independent smallholder farmers practicing slash-and-burn agriculture on Sumatra, and that it is impossible for palm oil mills to control their behaviour. But is that true? For more than ten years, the chocolate industry said the same thing about child and slave labour in smallscale cocoa farms in West Africa. There are ten million farming families growing their key ingredient – how on earth could companies reach them to make sure they have the livelihood support they need to get and keep their kids in school?
But today, we see major chocolate brands investing millions to build schools, fund teachers, support cooperatives, donate seedlings, and develop the comprehensive, long-term relationships with small farmers which a few years ago they said were impossible to form. These companies realized that they could no longer get away with saying that they had no responsibility for practices in supplier farms, and what is more, they need smallholders to increase yields and maintain quality if they want every schoolchild in Beijing to be eating chocolate in twenty years’ time. What if the companies currently burying their heads in the peat stood up and said wait a minute, what if I treated these independent smallholders who provide up to 40% of my product like an important part of my supply chain? What if I offered long-term contracts to farmers who used my bulldozer services instead of lighting their own fires? What if I provided high-yield seedlings and agronomic support to raise the average smallholder yield from four tons per hectare to five? We could avoid another two million hectares of forest conversion for palm oil, that’s what. We could prevent Indonesia from once again being responsible for 40% of global carbon emissions in one year.
Plenty of mills already integrate smallholders formally when they set up new projects in ‘plasma’ schemes, which are basically an extension of the plantation’s activities. But what would it take to get mills to take an interest in their independent suppliers? Maybe buyers and banks telling palm oil companies: enough smog, enough carbon emissions, enough denying responsibility. We are ready to sign long-term contracts and even, dare we say, pay a premium for palm oil from mills and refineries which take full responsibility for the practices of all of their suppliers and are investing in changing practices. No more fires, no more deforestation, no more low yields, no more buying on the spot market or on the side of the road. We want stabilized supply chains, with mills who know where all their product comes from, who grew it, and how it was grown . . . and we’re willing to pay for it.
Sadly, very few companies are doing the hard work of even finding out where their palm oil actually comes from, much less building strong relationships all the way upstream and joining efforts to build responsible supply chains. It’s much easier to buy a sustainability certificate on an exchange and continue to source palm oil tainted with fire and deforestation. But other industries are showing that it can be done, and eventually must be done. As a long-term marketing strategy for the palm oil industry, blaming smallholders just isn’t going to cut it.