Finding common ground

25/05/2017 – Sustainability / Palm Oil / Mighty Earth / Olam / Gabon

In the wake of Mighty Earth’s 2016 report, Palm Oil’s Black Box, in which the NGO lambasted Olam for operating what it termed “a giant ‘black box' of palm oil from unknown sources”, the prospect of the two organisations collaborating might have seemed unlikely to say the least. However, the non-profit organisation (a project of the US-based Center for International Policy) and the leading multinational agribusiness (owned by Singapore’s national wealth fund) have not only called something of a truce, but have actually agreed to work together to achieve more sustainable goals.

 

As is the case the world over, sustainable goals often come into conflict with economic ones – and in Gabon, the need for economic development is particularly stark: Some 32.7 per cent of its citizens live at or below the poverty line, according to the World Bank; it has 20 per cent unemployment overall and 35 per cent youth unemployment, while the country imports around 60 per cent of its food. Heavily dependent an the oil & gas sector, which contributes 60 per cent of its budget revenue, there is little wonder Gabon has been striving to diversify its economy, and as 90 per cent of its land area is forested, there is a justifiable imperative to grow the agricultural economy beyond mere subsistence farming. The country’s medium-term goal is to establish 300,000 hectares of agriculture, which will amount to about one per cent of Gabon's total national land area. 

 

“Fundamental to the debate is the basic principle of how Mighty and other NGOs view a country like Gabon and its sovereign right to sustainably develop its agricultural sector in partnership with the private sector,” argued Olam in an earlier missive responding to Mighty Earth’s scathing report. 

 

It is all the more surprising then that, following a recent meeting in Washington DC, Mighty Earth and Olam managed to agreed to move forward on two major imperatives. Firstly, to enable models for responsible agricultural development that support forest conservation whilst addressing poverty reduction and job creation in Gabon and other high forest cover countries. And secondly, of the need for palm oil traders to collectively strengthen their incentives for suppliers in South East Asia to avoid deforestation and the exploitation of workers or communities.

 

The agreement is to be championed in its thrust to help progress the economic development of an emerging market focused on expanding its agricultural sector, while also ensuring that environmental protection remains a key consideration of such ventures. 

 

Progressive talks

 

Moderated by the World Resources Institute, the recent meeting between the agribusiness giant and the NGO was called to discuss the impact of the former’s palm oil and rubber plantations developed in joint-venture with its partner, the Republic of Gabon. It also looked at Olam’s third-party palm oil sourcing in South East Asia. The outcome of the talks saw Olam agreeing to suspend further land clearing of forest in Gabon for palm and rubber plantations for one year (a period that can be extended). During this time, Mighty Earth and Olam will support a multi-stakeholder process to develop further specific criteria for responsible agricultural development in countries that have most of their land covered by forests. It also agreed to continue implementing its time-bound plans to map and disclose more information about its third-party palm oil supply chains in Asia, alongside publishing its procedures to address supply chain risks. 

 

Meanwhile, Mighty Earth agreed to suspend its current campaign targeting Olam’s oil palm and rubber operations for a year, including its complaint to international non-profit organisation Forest Stewardship Council (FSC) – again, a period that can be extended – and to work with the Gabonese government, civil society, and international experts and stakeholders to advance conservation and responsible development.

 

In a spirit of dialogue and increased mutual understanding, Olam and Mighty Earth jointly agreed to participate in stakeholder events with civil society organisations and the government in Gabon, to encourage and support the High Carbon Stock Approach working group to develop clear guidelines for responsible development in highly forested landscapes, and to further explore conservation and restoration initiatives.

 

A balancing act

 

 “Balancing forest protection and new agricultural projects can be very challenging, and it is vital for countries, companies and civil society to work together and find common ground,” noted Andrew Steer, President of the World Resources Institute. “This agreement is a good example of how organisations can come together to agree on a sustainable and prosperous path forward.”

 

Hopefully, the new collaboration is an encouraging sign of things to come – especially given that palm oil is unarguably here to stay. The crop accounts for around 35 per cent of the world’s vegetable oil market today. And this, more than anything, comes down to its efficiency: Harvested all year round, oil palm trees produce on average 10 tonnes of fruit per hectare – far more than soya, rapeseed and sunflower crops. This means oil palm requires 10 times less land than the other three other aforementioned major oil producing crops – an attractive proposition for small-scale farmers and major conglomerates alike. If planted responsibly, palm oil has the ability to support livelihoods in developing nations, while progressive partnerships between businesses and NGOs as outlined above will help to ensure that such development remains sustainable.

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