The Commoditization of the Natural Market
According to the USDA World Market Trade Report, the global use of vegetable oils has steadily increased, about 5% per year, over the last 20 years. Growing populations, increased wealth in the BRIC countries, and the resulting increased meat consumption (which requires more animal feed that comes from oilseed), have all maintained the steady growth of vegetable oils. Biofuels are also driving vegetable oil production. Biofuel production has dramatically risen over the last 15 years, going from 5 billion gallons in 2001 to almost 35 billion gallons in 2016 (Beckman, J. et al 2017). Recent biofuel increases are a response to the well-publicized connection between fossil fuel combustion and global warming. All these markets contribute to the overall positive impression that we have for natural materials. They are symbols of wealth, health, and global awareness.
USDA Oilseeds World Market Trade Report
Words like “sustainable” play influential roles in marketing campaigns. Fears of climate change led to a rebuffing of petroleum derived materials in consumer goods and a proliferation of natural merchandising. This influenced purchasing habits in everything from cars to building materials to consumable goods, like cosmetics. Today, the success of the natural movement has pushed this specialty niche market into the mass market arena. The popularity of natural products is evidenced by the fact that the largest mass market online retailer, Amazon, recently purchased the largest US organic grocer, Whole Foods. What was once considered “specialty” is now considered the norm.
Price erosion is the market’s response to the commoditization of a specialty market. Instead of consumers being prompted to purchase because of a product’s natural origin, the masses are now looking for the least expensive, natural product. Palm oil was more than able to fill this need. The beauty of palm oil is its efficiency as a crop. More oil can be derived from a single palm tree than any other vegetable crop existing. The rampant availability of palm oil keeps prices low and supply constant. This abundant oilseed can also be used to make many of the raw materials utilized in our daily lives at a fraction of the cost. Items like glycerin, lauric acid, caprylic/capric triglyceride, and many others now fill the ever-expanding portfolio of palm oil.
But the Devil is in the Details
Palm oil should be a success story. It’s inexpensive, land efficient, and when burned, can lead to reductions in the amount of carbon dioxide in our atmosphere. What we neglected to consider are its methods of production. Before planting can begin, forest must be cleared. This is done by cutting down harvestable timber and burning what remains. This process is known as “slash and burn”. The issue of concern is that primary forest is typically targeted. The reason for this is revenue generation while seedlings grow. It can take a palm plantation anywhere from 2 to 4 years to become productive and provide a return on investment. Selling the timber harvested from primary forest can generate $2,000 – $2,400/ha (Sheil, D. et al 2009). This money will help a smallholder buy fertilizer and, equipment and support his family while waiting for his crop to become productive. Palm plantations have a lifespan of about 20-30 years. Near expiration, harvests on these plantations start to decline. The Indonesian government advocates for the replanting of old plantations to ensure sustainability. However, replanting involves cutting down old trees, buying new seeds and rehabilitating the soil. This process can cost $4,300-6,600/ha. In addition to that expense, the smallholder has no timber to sell and will have to wait an additional 2-4 years before his farm is productive again. Abandoning old fields and using fire to clear new ones is simply cheaper and more realistic. Smallholder plantations make up about 40% of the current oil palm industry and the Indonesian government estimates 2.4 million ha of smallholder managed farms need to be replanted (Ompusunggu, M et al, April 6, 2018).
Man made fire in Indonesia, 2016, Jakarta Post
Removal of primary forest leads to greenhouse gas emissions and destroy habitats, threatening the extinction of many endemic species. 50% of the world’s animal population resides in the rain forest and we’re losing it. If the forest being cleared covers peatland, that land is highly flammable and can burn for months, undetected. Peatland also has a high carbon content that emits mass amounts of greenhouse gases when burned. The global tropical peatland carbon pool is estimated to be 89 Gt with 77% of that being in southeast Asia. The two largest southeast Asian contributors are Indonesia which is estimated to hold 57 Gt of tropical peatland carbon and Malaysia with an estimated 9 Gt of carbon (Page et al, 2001). If the goal is to reduce greenhouse gases, we must preserve our most efficient carbon sinks rather than destroy them. The peatland found in Indonesia and Malaysia are some of the oldest and deepest in the world which means they contain the most carbon. Burning primary forest and peatland has been calculated to create carbon debts anywhere from about 100 to 1000 years (Science, Fargione, et al. 2008). Palm oil as it is currently produced is simply not sustainable.
Can Sustainability be Commoditized?
So, what’s the answer? Some think it’s the RSPO (Roundtable of Sustainable Palm Oil) and “sustainably” sourced material. Sadly, substantial evidence documents that the RSPO, as currently established, is unable to self-monitor, halt the rampant corruption seen between growers, auditors and government officials, or protect the environment that it is supposed to serve. RSPO certified palm oil produced by RSPO certified growers has been found to be created through the destruction of primary forest and peatland resulting in habitat destruction of critically endangered species and produced using child and forced labor (Environmental Investigation Agency, 2015; Finnwatch, 2015; Amnesty International, 2016). The US Department of Labor lists that palm oil coming from Malaysia as being made with child and forced labor and palm oil coming from Indonesia as being made with child labor. Children of migrant workers in Malaysia cannot attend school or take advantage of the free national healthcare. This creates a growing population of alienated youth with very few choices in life. Children born in Malaysia to non-Malaysian citizens (ie-foreign workers) are considered stateless and have even fewer choices. Foreign workers make up about 20% of Malaysia’s workforce (US Department of State, 2017).
The United Nations Program on Reducing Emissions from Deforestation and Forest Degradation (UN-REDD) even admitted that “[w]hile RSPO and other standards require certain provisions that would in principle limit deforestation, there is very little quantitative evidence that this is actually the case.” A recent NASA study provided space-based evidence that the Earth’s tropical regions during 2015 and 2016 were the cause of the largest annual increases in atmospheric carbon dioxide seen in at least 2,000 years. NASA satellite recorded atmospheric carbon dioxide increases 50% larger than the average increase seen in recent years. These increases equate to 6.3 Gt of carbon. Researchers noted that tropical Asia’s increased carbon release came mainly from Indonesia and was largely due to increased peat and forest fires. (Nasa, 2017).
The success of the natural movement and the RSPO both shield palm oil under the cover of “sustainability”. Most consumers incorrectly equate natural origin with sustainability. Consumers respond positively to phrases like “sustainably sourced” so there is no real incentive to address what is actually happening under the guise of sustainability. The truth is, RSPO certification prevents us from seeing that our reliance on palm oil, as it is currently produced, leads to unbridled levels of greenhouse gas emissions through the loss of our two most valuable carbon sequestering resources: forests and peatland. Despite the Indonesian Presidential ban on clearing peatland, despite the RSPO’s principals and criteria which state there shall be no clearing of primary forest, despite consumer brand commitments to only use “sustainably sourced” raw materials, we are still producing unprecedented levels of carbon dioxide in our quest to reduce greenhouse gases.
In 2010, Norway pledged 1 billion dollars to Indonesia if they agreed to a 2-year ban on clearing new forests. The US also pledged $136 million dollars to Indonesia to fight deforestation. Even so, between 2010 and 2016, 12.3 Mha of tree cover were lost. In Indonesia there were 1,156 active fires detected as recently as April 28th to May 5, 2018 (Global Forest Watch).
What’s the Answer?
Stop wearing make-up? Stop washing our hair in protest? The RSPO appears to be ineffective. Paying governments not to deforest doesn’t seem to work either. Decades pass by and more forest is lost. The Sumatran Rhinoceros population was estimated to be less than 100 individuals in 2013 (IUCN SSC 2013). That was 5 years ago. 100,000 Bornean orangutans were lost between 1999 and 2015 (Voigt et al 2018). The situation can seem hopeless. But it’s not. We have witnessed the effectiveness of NGO and community pressure in the reduction in deforestation rates in Brazil. The same can happen in Southeast Asia. There are raw material manufacturers making palm free options and certifying bodies like the Palm Free Council who can help find those sources. People from 2 to 92 need soap, shampoo, and lotion. Cosmetics and personal care are ideal platforms to reach millions of consumers who are unaware of the effects that palm oil is having on our atmosphere. This environmental travesty can be changed but formulators and brands must consciously decide to take a stand.
Carol Mantasoot is the founder of the Palm Free Council which is a non-profit working to raise public awareness of the connection between palm oil and forest degradation. She is doing so through social media campaigns, speaking and writing engagements and the certification of palm free and palm restricted personal care, cosmetics and food. If you are interested in learning more, please visit Palm Free Council or phone 1-310-968-2635.