Setting the Record Straight: Cargill and Tripa Forest Controversy

Written by Ashley Schaeffer

Topics: Agribusiness, Forests

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Will Cargill Act in the Interest of Orangutans and Adopt Safeguards?

Will Cargill Act in the Interest of Orangutans and Adopt Safeguards?

Although there are no major fires still tearing through the Tripa peat forest in Sumatra — the densest remaining Sumatran orangutan habitat in the world — updates from our allies on the ground tell us that Tripa is still gravely at risk. With one or two small fires still breaking out each day, combined with ongoing active forest clearing for palm oil plantations, the critically endangered orangutans depending on this forest for survival remain in danger.

Despite the international spotlight on Tripa since late March, there is still active clearing and building of more drainage canals going deep into primary forest.

I wish I could say that some of the largest players in the palm oil industry, such as Cargill, are doing everything in their power to ensure that controversial palm oil coming from these types of tragedies isn’t ending up in their supply chain (and our pantries), but that is definitely not the case.

RAN’s report, Truth and Consequences: Palm Oil Plantations Push Unique Orangutan Population to Brink of Extinction, points out that Cargill has no safeguards on its global palm oil supply chain, and that without such safeguards Cargill cannot ensure it is not contributing to egregious violations like the one underway in the Tripa peat forest of Indonesia.

Although Cargill is still misleading the public by releasing statements like the one from last week, titled, “Cargill Refutes Rainforest Action Network claims about Tripa Forest,” the bottom line remains: Cargill traffics a whopping 25% of the world’s palm oil and Cargill cannot ensure it is not trading palm oil from Tripa or parent companies profiting from the destruction of Tripa because it has no safeguards whatsoever in place to prevent it.

RAN released an official response to Cargill’s misleading claims last week with the following key points:

  • Cargill claims that it “does not import Indonesian palm oil to the United States.” This is pure obfuscation. By Cargill’s own estimate, nearly 90 percent of the world’s palm oil is sourced from Indonesia and Malaysia, and the company traffics 25 percent of the world’s palm oil. Cargill’s claim that it does not ship any Indonesian palm oil into the U.S. is misleading and insincere, as a percentage of Indonesia’s palm oil is refined in Malaysia before being shipped to the US.
  • Cargill also claims that it is not associated with the devastating fires raging throughout the Tripa rainforest of Indonesia. Cargill is hiding behind a shell game of shifting company ownership and complicated trade relationships between a web of subsidiary suppliers. However, the fact is that Cargill has a history of trading with at least one company that has profited from the destruction of the priceless Tripa rainforest.Trade data held by Rainforest Action Network shows that Cargill shipped at least 4,000 tons of crude palm oil produced by Astra Agro Lestari from the island of Sumatra in 2009. Astra Agro Lestari produced and exported palm oil from Tripa until at least 2010.

    According to Bloomberg, Astra Agro Lestari also sells millions of dollars of palm oil a year to industry giants Wilmar and Sinar Mas — two major suppliers of palm oil to Cargill. With a lack of supply chain transparency and no safeguards to prevent it, Cargill cannot in good faith claim never to have sold palm oil connected to the destruction of the endangered Tripa forest.

  • Cargill has an enormous influence to exercise on the global palm oil market. The only way Cargill can guarantee it is not contributing to the devastation underway in Indonesia is if it adopts explicit environmental, social and transparency safeguards to prevent it, which does not mean relying on a third party like the Roundtable for Sustainable Palm Oil (RSPO). It does mean taking responsibility for the practices of its suppliers. Cargill as a company has not articulated its values for its supply chain, meaning it does not publicly position itself against common abuses associated with palm oil production like slave labor and deforestation.Cargill has stated an intention to phase RSPO-certified oil into its global supply chain by 2020. However, the RSPO has at best a very spotty track record of enforcing its own rules to prevent tragedies like the one underway in Tripa. At the rate of destruction occurring today, 2020 is too little, too late for the forests, people and wildlife of Southeast Asia.

Just last week, Unilever, the world’s largest buyer of palm oil, announced a commitment to buy all of its palm oil, including its palm kernel oil, from traceable sources by 2020. Cargill’s modest commitments explicitly exclude palm kernel oil, an important commodity in the US market. Cargill also has no commitment to traceability, a crucial element for achieving transparency and accountability.

Cargill is showing an alarming failure to deliver on its time-bound commitments, including to secure RSPO certification for all of its palm oil plantations by the end of 2010, and completion of a survey and review of the practices of its palm oil suppliers by early 2011.

4 Comments For This Post I'd Love to Hear Yours!

  1. Mark_Murphy says:

    Happy to have this opportunity to share more information with your readers.

    Cargill doesn’t import Indonesian palm oil to the United States. The reason is simple: More than 80 percent of all palm oil is used in China, India and Indonesia itself. Europe is another big consumer. The United States uses less than 5 percent of all palm oil grown in the world, and Cargill supplies only a fraction of that.

    Cargill doesn’t buy from PT Kallista Alam, the company accused of setting the fires in Tripa. Nothing complex about it. We just don’t buy from them. http://bit.ly/IMcDT1

    We join RAN in applauding Unilever as a buyer of palm oil, because their 2020 goals rely on RSPO-certified oil. In fact, Cargill agreed two years ago to supply Unilever with fully traceable palm oil http://www.cargill.com/news/releases/2010/NA3031888.jsp. The supply of certified sustainable oil is still bigger than demand, so we look forward to more companies like Unilever committing to it.

    Mark Murphy,
    Asst. VP for Corporate Responsibility, Cargill

  2. Frances Yan-Man-Shing says:

    Dear Mark Murphy,

    I was wondering if you could answer the following questions:

    1. Does Cargill buy palm oil from companies that are actively destroying natural forests and peatlands in Indonesia?
    2. Does Cargill buy palm oil from traders that buy palm oil from companies that are actively destroying natural forests and peatlands in Indonesia?
    3. Does Cargill trade and export palm oil, from companies that are actively destroying natural forests and peatlands in Indonesia, to China and India?

    Many thanks,
    Frances

  3. Catherine Deadman says:

    Dear Mark Murphy,

    What is Cargill’s relationship with PT Kallista Alam?

    Thank you for joining this discussion.

    Catherine

  4. burningforest says:

    There is a big lie going on about buying “certifed palmoil”. Unilever will by certificates that don`t belong physically to the oil they buy. So Unilever can still buy almoil out of sources that not has benn traced and buy certificates from somebody else. The consumer will be tricked. Check out this article about the illusion about certificates:

    http://www.forbes.com/sites/edgarblanco/2012/05/03/can-commodites-be-sustainable/

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