The palm oil industry is increasingly certifying its activities as “sustainable,” “responsible,” and “conflict-free.” This trend does not represent a breakthrough toward better governance, this article argues, but primarily reflects a business strategy to channel criticism toward “unsustainable” palm oil, while promoting the value for protecting rain forests of corporate social responsibility, international trade, industrial production, and industry-guided certification. Illegalities and loopholes riddle certification in Indonesia and Malaysia, the two main sources of certified palm oil; at the same time, palm oil imports are rising in markets not demanding certification. Across the tropics, oil palm plantations linked to deforestation and human rights abuses are continuing to expand as companies navigate weak governance rules, and as sales shift across markets and inside global supply chains. Theoretically, this analysis advances the understanding of why and how the power of business is rising over the narratives and institutions of global agricultural governance.
World production of palm oil and palm kernel oil has tripled since 2000, today accounting for more than one-third of the global production of vegetable oils and almost two-thirds of global trade in vegetable oils (US Department of Agriculture [USDA] 2002, 5; USDA 2017, 11). Approximately half of packaged food and personal hygiene products in a typical supermarket now contain oil from the oil palm tree. It is in margarine, chocolate, cookies, cereal, ice cream, and dog food. It is in toothpaste, detergent, lipstick, and shampoo. It is in biodiesel. And it is widely used for deep-frying food. On ingredient lists, it appears under scores of different names besides “palm oil” and “palm kernel oil,” including “palmitate,” “palmitic acid,” “glyceryl stearate,” “sodium kernelate,” and “hydrogenated palm glycerides.”
Palm oil has many appealing qualities. It has a long shelf life; it holds up well in hot climates and under intense heat; it is virtually odorless and highly versatile; and it is less expensive than comparable oils. Yet, over the past four decades, the growing and processing of oil palm have been leading causes of tropical deforestation, biodiversity loss, and greenhouse gas emissions, especially in Indonesia and Malaysia, which together accounted for 85 percent of world production in 2017 (USDA 2017, 19). In Indonesia, every year during the dry season, fires are lit to clear land for oil palm plantations, contributing significantly to climate change and smothering the region in a smoky haze as forests, peatlands, and coal seams burn. Palm oil production has also contributed to widespread human rights abuses, as plantation owners take over lands from subsistence farmers and indigenous communities, not only in Indonesia and Malaysia but also increasingly in tropical Africa, Latin America, and other countries of Asia.
Over the past few decades, activists have fought hard to reduce these costs. Governments, corporations, and communities have pushed for reforms too. At first glance, the gains would seem impressive. The Malaysian and Indonesian governments have amended land-clearing policies, have set up certification programs, and are promising to allow only for the production of “sustainable” and “responsible” palm oil. Notably, the Roundtable on Sustainable Palm Oil (RSPO), a multistakeholder, nonprofit organization with a vision to “transform the markets by making sustainable palm oil the norm,” has steadily expanded since launching in 2004 and, by 2017, was certifying nearly one-fifth of world palm oil production as sustainable (Roundtable on Sustainable Palm Oil [RSPO] 2017). At the same time, financial institutions (such as HSBC in 2017) have revised their lending policies for the palm oil industry, while states, NGOs, and companies have signed on to initiatives to end palm oil production that is contributing to tropical deforestation, such as the 2014 New York Declaration on Forests. Across the global palm oil supply chain as a whole, by the beginning of 2017, nearly 60 percent of firms had committed to strive to end deforestation (Tropical Forest Alliance 2020 2017, 2), with just about every company that has a global brand—from Nestlé to Procter & Gamble to McDonald’s—claiming to pursue a policy of “zero deforestation.”
Yet, despite this tidal wave of claims and promises, reducing the environmental and social costs of the oil palm industry is proving elusive. In 2015 alone, fires across Indonesia, many set to clear forests and peatlands for oil palm, scorched more than two million hectares, emitting as much carbon dioxide as the entire Brazilian economy that year (Purnomo et al. 2017). And even more environmental and social costs are on the way as world production of palm oil continues to expand across the tropics.
Why are governance efforts failing to significantly reduce the environmental costs of palm oil production and consumption globally? The overview of global food governance by Jennifer Clapp and Caitlin Scott (see Introduction to this issue) offers helpful insights for investigating the politics underlying this failure. In particular, they emphasize the value of exploring the intersection of industry complexity and distancing, competing business and scientific narratives, power inequalities and dynamics, and the nature of the policies and institutions of governance. Considering industry complexity, at first glance, the high concentration of palm oil production in Indonesia and Malaysia might seem to simplify the governance challenge. Indeed, forest, agricultural, and palm oil policies look reasonable in these countries. Yet political corruption, power inequities, and widespread illegalities have long undermined implementation (Dauvergne 1997, 2001; Ross 2001; Straumann 2014). Moreover, the complexity of the palm oil industry beyond these countries—characterized by long supply chains, a great diversity of buyers, and a high substitutability across end uses—has greatly increased the difficulty of effective governance, both fragmenting and undermining interventions to improve management.
But domestic politics and industry complexity only partly explain why palm oil governance is doing so little to reduce social and ecological costs. Significantly, a narrative advocating for the development advantages of producing and trading even more palm oil—though now calling it “sustainable”—has come to dominate mainstream institutions and policy circles. This industry-friendly narrative is directing criticism toward “unsustainable” production, with smallholders blamed in particular for such production. It is positioning corporate investment, international trade, and industrial-scale production as vital for conservation, food security, and rural development. And it is maintaining that industry-guided certification and offsetting, corporate social responsibility (CSR), voluntary compliance, and public–private partnerships are the most efficient and effective ways to improve palm oil governance. Yet, as this article shows, these supposed solutions are deflecting, hiding, and causing new problems within illegal political economies and across the complex global palm oil landscape, while doing comparatively little to enhance environmental management or community well-being.
I divide my analysis into three sections. To begin, I survey the global palm oil industry to demonstrate the governance difficulties arising from the distancing effects of long and complex supply chains, the high fluidity of markets, and the high substitutability of the end uses for palm oil. Next, I delineate the competing narratives around the ecological and social consequences of palm oil, documenting the growing influence of industry over the narratives, policies, and institutions of palm oil governance. Finally, I turn to analyzing how power dynamics and institutional outcomes combine to create a weak, fragmented, and market-oriented governance structure for palm oil: one that is reinforcing a global expansion of oil palm plantations while doing little to improve management. I conclude the article by reflecting on the lessons from this analysis of the global environmental politics of palm oil for understanding the sustainability of the global food system more generally.
The Global Palm Oil Industry
In the case of palm oil, as is true for most agricultural products, long supply chains distance responsibility for damage both geographically and psychologically (Clapp 2015; Princen 2002). Tracing the source of palm oil is extremely difficult even with the high concentration of world production in Indonesia (54% in 2016) and Malaysia (31% in 2016). There are tens of thousands of different plantations across these two countries. Moreover, local firms with little transparency control many of the plantations in places such as Sarawak, a Malaysian state where profits from logging and palm oil have long financed political rulers, and where the state’s chief minister from 1981 to 2014 (who is now the ceremonial head of state) accumulated a fortune of approximately US$ 15 billion by the time he left office (Straumann 2014; Varkkey 2016).
Across Indonesia, where patronage is also a defining feature of the palm oil industry, there are more than fourteen hundred private firms (many with ties to Malaysia and Singapore) and fifteen state companies managing plantations averaging approximately four thousand hectares in size. The number of firms, however, is relatively small compared to the great array of smallholders. Typically only two to five hectares in size, smallholdings comprise more than 40 percent of Indonesia’s oil palm area, accounting for around one-third of production and involving close to 1.5 million households. Although companies control one-third of these smallholders through leasing and other agreements, the rest are largely independent (especially those managing more than ten hectares) or are part of a cooperative (Daemeter 2015, 1, 8).
This complex production terrain can make it very hard to pinpoint responsibility for the clearing of forests to plant oil palm (Sustainable Palm Oil Transparency Toolkit [SPOTT] 2017). In Indonesia, companies almost always blame independent smallholders for illegally setting fires to clear land (often described derogatorily as “slash-and-burn” agriculture). Plantation owners in Indonesia, however, are known to pay locals to light fires, and land clearing for large-scale agriculture has long involved illegally burning forests and peatlands, including in parks and on indigenous lands (Anderson 2013; Pye and Bhattacharya 2013; Varkkey 2012, 2016). For this reason, growers, local agents, brokers, and corporate processors—often protected by political patrons—commonly misreport and falsify the origins of palm oil. Further complicating matters, around 90 percent of oil palm smallholders in Indonesia do not hold legal land title; meanwhile, some independent smallholders have also turned themselves into local “strongmen,” clearing forests and peatlands with fire to establish oil palm estates of one hundred hectares or more (Daemeter 2015, 8, 13). Rising demand since 2010 for certified palm oil has been compounding the difficulty of tracing oil palm supply chains, as local agents, traders, refineries, millers, and processors “launder” uncertified oil by mixing it into batches certified as sustainable and conflict-free (Greenpeace International 2013, 3).
Palm oil supply chains, moreover, are becoming more complex and opaque as production expands beyond Malaysia and Indonesia and into new areas with equal, if not greater, levels of corruption, violent land grabbing, unclear corporate landholdings, misreporting and smuggling, and weak implementation of regulations. Rising demand for palm oil partly explains this expansion. World palm oil production has grown rapidly over the past three decades, and analysts are expecting growth to continue over the next few years. Grand View Research (2016), for example, is predicting that global palm oil production in 2022 will be almost 75 percent higher than it was in 2014, with market worth rising from US$ 61 billion to US$ 88 billion. In recent years, investment in oil palm production has been rising across Central and West Africa (although the oil palm tree is native to West Africa, the region has historically only produced small quantities of palm oil, primarily for local consumption). And industry analysts are now projecting that palm oil production in countries such as Cameroon and Liberia will increase quickly over the next few decades, with Central and West Africa one day possibly even rivaling Malaysia and Indonesia as a global producer and exporter of palm oil and palm oil kernels (Kelly 2016).
Coupled with the distancing of consumers from environmental consequences, the very high and growing interchangeability of the end uses of palm oil presents another difficult challenge for global governance. In recent years, roughly two-thirds of palm oil has been used for cooking and deep-frying, with health warnings and new regulations for trans fats helping to stimulate demand in baked goods and processed foods (palm oil does not contain trans fats, although it is high in saturated fat). Increasing utilization of palm oil and palm kernel oil for other uses—animal feed, cosmetics, personal hygiene products, and biofuels—has also been driving up palm oil sales over the past decade. Rising demand for biocosmetics, biodetergents, and biolubricants, as well as government regulations to promote biofuels, has further pushed up consumption (Grand View Research 2016).
As the end uses of palm oil have diversified, the variety and number of markets and buyers have increased. Malaysian and Singaporean firms do wield substantial influence over the production and distribution of palm oil from industrial-scale plantations in Malaysia and Indonesia (Hamilton-Hart 2015), and a single company, Singapore’s Wilmar International, controls approximately 45 percent of world trade in palm oil. There is, however, no dominant market or corporate end user. In 2015, for instance, the palm oil purchases of 137 leading retail, food-service, and manufacturing companies only added up to about 6 million metric tons, or 10 percent of world production (WWF 2016, 3). Palm oil sales are also spread over a wide array of developing and developed countries. India, where palm oil is widely used for cooking, was the leading consumer in 2017, accounting for 16 percent of world consumption, almost all of which was imported. Indonesia was second at 15 percent, followed by the European Union (10%), China (8%), Pakistan (5%), Malaysia (5%), Thailand (4%), and Bangladesh (2.5%). Next on the list were the United States and Nigeria, each accounting for a little over 2 percent of global consumption (USDA 2017, 19).
Because of the high product substitutability, high fluidity of buyers, and wide market distribution for palm oil, regulating or taxing one industry or national market more strictly can quickly deflect sales into new uses and jurisdictions. Over the past decade, for instance, a global activist campaign to target the palm oil sourcing practices of global brands—ones such as Unilever, Nestlé, Procter & Gamble, and McDonald’s—has shifted the purchasing patterns of brand corporations toward products certified by the Roundtable on Sustainable Palm Oil (Dauvergne 2017). This has been a boon for the RSPO, which certified 19 percent of world palm oil production in 2016 as sustainable, up from 10 percent in 2011 (or from 5 million metric tons in 2011 to nearly 12 million metric tons in 2016; RSPO 2017). Yet at the same time, the consumption of unbranded and uncertified cooking oil for low-income households has gone up in countries such as India, where imports neared 10 million metric tons in 2017—two times more than in 2007 (USDA 2011, 13; USDA 2017, 19). Consumption of uncertified palm oil is also dispersing across the developing world, with imports into Central and South America, for instance, growing especially quickly in recent years (Grand View Research 2016).
Contested Palm Oil Narratives
Competing narratives of palm oil sustainability and unsustainability swirl inside this complex industry and across the governance landscape, with sharp differences across countries and between advocates and critics. The most vocal proponents of palm oil tend to reside inside the governments and industry associations of Malaysia and Indonesia, although strong support for increasing the production of what advocates call sustainable palm oil has also come from those working in transnational corporations (TNCs), nonprofit organizations such as the RSPO, and international organizations such as the Food and Agriculture Organization (FAO) and the World Bank (as a way of earning foreign exchange and supporting development). On occasion, as Malaysia and Indonesia jockey for export markets and price premiums, domestic and international palm oil supporters have clashed openly over definitions, strategies, and what constitutes best practices, although the common goal of wanting to expand production and consumption has helped diffuse tensions.
Of course, many individuals within these countries and organizations have also expressed concerns over the environmental and social consequences of oil palm plantations. The most outspoken and sustained criticism, however, has come from human rights and environmental activists. Those affiliated with local NGOs, such as Indonesia’s Sawit Watch (Jiwan 2013), Indonesia’s environmental forum Wahana Lingkungan Hidup Indonesia (known as WALHI), and Malaysia’s Sahabat Alam Malaysia have been highly critical; so have those campaigning for international NGOs, such as the Rainforest Action Network and Greenpeace. Scholarly work has also been very critical of the environmental and human rights consequences of the palm oil industry (e.g., Anderson 2013; Cramb and McCarthy 2016; Gillespie 2012; Hamilton-Hart 2015; McCarthy et al. 2012; Nesadurai 2013; Pichler 2015; Pye and Bhattacharya 2013; Schleifer 2016).
Some critics go as far as describing oil palm in countries like Malaysia and Indonesia as little more than an invasive species. The oil palm tree, which was first transplanted from West Africa to Indonesia in the mid-1800s, covered as much as 27 million hectares worldwide in 2017, an area roughly equal to New Zealand (SPOTT 2017, 4; SPOTT’s lower-end estimate is 20 million hectares). Rain forest activists highlight the grave consequences for biodiversity and endangered species, such as for orangutans and Sumatran tigers. Greenpeace International (2016, 1), for example, describes the consequences of palm oil plantations as “catastrophic” for Indonesian rain forests and wildlife. Critics further note the contribution to climate change of both the burning down of forests, which emits carbon, and the processing of palm oil, which emits methane. Oil palm plantations and mills, they add, also disrupt ecosystem services, destroy peatlands, and pollute waterways, including with waste, fertilizers, and pesticides (Gillespie 2012; Jiwan 2013).
The expansion of oil palm plantations, many critics add, has tended to aggravate social inequalities and breed conflict (Abram et al. 2017; Cramb and Sujang 2011; Jiwan 2013). These critics claim that companies stir up animosity within communities by exploiting land tenure uncertainties, ejecting indigenous people as “squatters,” misleading communities on their share of the profits, and manipulating participation and consent processes (Anderson 2013; Cramb and McCarthy 2016; Lunkapis 2013; Prabowo et al. 2017). The transformation of the state of Sarawak, Malaysia, has been especially dramatic, with oil palm now covering more than 1 million hectares (up from 23,000 hectares in 1980): a straight-up “land grab” to prop up a corrupt system of “political patronage,” according to Rob Cramb (2016, 192) at the University of Queensland. Some critics add that large-scale plantations frequently exploit workers as well (Li 2017) and, contrary to company claims, offer few lasting economic benefits for communities (Rhein 2015). The Rainforest Action Network (2017), for instance, describes various palm oil plantations in Malaysia and Indonesia as exploiting child labor and practicing modern-day slavery (see also Amnesty International 2016).
This critical narrative contains some important differences in emphasis. Some critics focus on the harm from expanding industrial plantations into forested areas. Others oppose large-scale oil palm plantations but at the same time advocate for more small-scale planting on already deforested land, arguing that this can generate vital income for poorer families and supply inexpensive cooking oil for low-income households. This diversity of criticism, emphasis, and proposed ways forward offers many opportunities for advocates of palm oil to push back against opponents. Critics have clearly raised global awareness of the environmental and social costs of palm oil. Nevertheless, advocates have managed to channel much of this criticism into a narrative emphasizing that these concerns only apply to “unsustainable” oil palm plantations and that “verified” and “transparent” certification, stakeholder partnerships, and voluntary CSR offer pathways to expand industrial plantations, the palm oil trade, and the uses and consumption of palm oil under the labels of sustainable, responsible, and conflict-free.
This industry narrative is gaining strength in part by emphasizing the value of investing in sustainable palm oil as a way of generating income, jobs, and foreign exchange, both locally and nationally. Oil palm is especially suitable for large-scale agriculture, advocates contend, as it yields much higher rates of return per area planted than other vegetable oil crops. Already, they note, the industry is worth approximately US$ 20 billion a year in countries like Indonesia, with even higher earnings possible. Advocates of commercial oil palm plantations often speak of the value of modeling “climate-smart” agriculture. They generally accept the value of smallholder production but also note that company-run plantations are more productive per hectare—and thus more efficient—than smallholder farms (Daemeter 2015, 11). They also tend to claim that most of the expansion into forested areas, including by burning forests and peatlands, is done by smallholders, and rarely, if ever, are large-scale plantations (at least ones producing certified palm oil) implicated in deforestation.
There are differences in emphasis within this overarching industry narrative of the value of expanding the production of so-called sustainable palm oil. Since the 1990s, the governments of Indonesia and Malaysia have been particularly staunch defenders of the merits of oil palm plantations, with both governments putting in place incentives and policies to increase palm oil exports (Cramb and Sujang 2011; Potter 2012; Jiwan 2013; Hamilton-Hart 2015, 169–173). To some extent, competition between Malaysia and Indonesia for palm oil markets has amplified differences in the tone of domestic and international advocacy for oil palm plantations. Back in 1990, confronting a growing global activist campaign to save the rain forests of Borneo, the Malaysian government set up the Malaysian Palm Oil Council to protect the industry’s reputation overseas. Today, the council does not shy away from stating its mission: “To promote the market expansion of Malaysian palm oil and its products by enhancing the image of palm oil” (see www.mpoc.org.my). Malaysia’s and Indonesia’s palm oil industries have also each formed associations to further promote their interests and reputations. The Malaysian Palm Oil Association, established in 1999, has a mission similar to the Malaysian Palm Oil Council: “to inspire the sustainability of oil palm and other plantation crops for long term profitability and growth” (see http://mpoa.org.my). The Indonesian Palm Oil Association, set up in 1981, also speaks of “empowering sustainability,” claiming that it is advancing the expansion of sustainable production and sustainable exports (see GAPKI 2016).
The Malaysian and Indonesian palm oil associations both emphasize the value of commercializing and trading palm oil in overseas markets as a way to reduce poverty and thus promote food security by increasing household incomes within farming communities (GAPKI 2016; Malaysian Palm Oil Certification Council [MPOCC] 2017). Sometimes they go even further and describe palm oil as a healthy and nutritional staple food for billions of people. The Malaysian Palm Oil Council, for instance, runs Palm Oil Health (www.palmoilhealth.org), which is dedicated to supplying “breaking news and industry research” on what it claims is Malaysian palm oil’s “exciting potential for supporting cardiovascular and neurological health.” International advocates of palm oil would rarely make such claims. Differences in emphasis and tone within the global palm oil industry, however, have not impeded the strengthening power of the overarching industry narrative of sustainable palm oil. As the next section discusses, though, recent moves by Malaysia and Indonesia to bypass the RSPO and capture sustainable palm oil markets through domestic certification schemes are further weakening and fragmenting governance.
Governing the Business of Palm Oil
For those critical of the environmental consequences of palm oil, figuring out where, and how, to intervene to improve governance is difficult given the complexity of the industry. Should one focus on improving forest, land tenure, and palm production policies in Indonesia and Malaysia? Should one focus on enforcement of current regulations? Should one develop regional agreements, such as the 2002 Transboundary Haze Pollution Agreement of the Association of Southeast Asian Nations? Should one pressure international banks to reform lending policies? Should one establish financing programs to support conservation and reforms to land management, such as the United Nations program for Reducing Emissions from Deforestation and Forest Degradation (+Conservation), or REDD+? Should one aim to improve and extend certification? Or should one perhaps rely on educational campaigns and ecoconsumerism to influence brand manufacturers and global supply chains?
All of these efforts are occurring—and so is industry resistance to any effort that threatens profitability. The result is a governance landscape that is multilayered, very complicated, and constantly shifting: a patchwork of crisscrossing domestic regulations, international programs, financing schemes, market signals, private voluntary initiatives, and NGO pressures. Some of this governance is functioning reasonably well, but some is also clearly functioning intermittently, poorly, or not all. Some critics, such as Natasha Hamilton-Hart (2015, 164), argue that palm oil governance is better understood as “misgovernance,” which for her is “not an unintended consequence of institutions failing to keep up with markets in scale and scope, but is embedded in the multilevel governance regime that supports, and partially regulates, the industry.”
Looking across this diverse, patchy, and fragmented governance landscape does reveal, however, a clear pattern over the past decade: the institutions and policies of palm oil governance have increasingly come to reflect the narrative and interests of business. The Tropical Forest Alliance 2020 (TFA), a multistakeholder initiative comprising governments, business, and civil society groups, is one manifestation of the institutionalization of the pro-industry narrative. Founded in 2012 at the urging of the Consumer Goods Forum, this alliance claims to aim to reduce by 2020 the consequences for tropical deforestation of pulp and paper, beef, soy, and palm oil production: what it describes as a commitment “to end commodity-driven tropical deforestation.”
The language of public–private partnerships, collaboration with business, and voluntary industry commitments is central to the discourse of the TFA. “Partnership is critical to … success,” the TFA (2017, 3) writes. “Companies should feel comfortable making bold commitments knowing that the global community is behind them. Governments and civil society should see that now more than ever there is the need to collaborate with business and be part of the transition to deforestation-free commodities” (3). The 2016 Marrakesh Declaration, signed by countries in Central and West Africa at the 22nd Conference of the Parties to the 1992 UN Framework Convention on Climate Change, is an example of initiatives by the TFA. Signatories pledged to “develop and promote a sustainable oil palm sector that delivers increasing yields and secures increased production while: bringing jobs to our people; providing fair and equitable labour conditions; working to improve community livelihoods; and contributing to food security and poverty alleviation through equitable benefit sharing” (Tropical Forest Alliance 2016, 3).
The RSPO is the most visible manifestation of this pro-business narrative of sustainability. The RSPO was set up in 2004 with the backing of the WWF and the Anglo-Dutch consumer goods company Unilever, which at the time was looking for ways to reduce growing criticism of its palm oil sourcing. Zurich, Switzerland, is the legal home of the association, but the secretariat is in Kuala Lumpur, Malaysia, and there is a branch office in Jakarta, Indonesia. It is a private, third-party certification organization and excludes governments as formal members. RSPO’s market coverage has been growing steadily, with a fivefold rise in RSPO-certified palm oil from 2010 to 2016. Today, the RSPO has more than thirty-six hundred members, with 51 percent of its Certified Sustainable Palm Oil (CSPO) coming from Indonesia and 42 percent coming from Malaysia in 2016 (RSPO 2018).
To some extent, the RSPO is helping some palm oil producers and buyers to improve environmental and social practices (Nesadurai 2013; Teoh 2013). Yet there is also no question that industry wields a great deal of influence over the definitions, policies, and programs of the RSPO (Hamilton-Hart 2015; McCarthy 2012; Pichler 2013; Ruysschaert 2016). We can see this industry influence in its governance. The co-chairs of the board of governors at the start of 2018, for instance, were from Unilever and United Plantations (a Malaysian oil palm plantation company). The Malaysian Palm Oil Association, which, as we saw earlier, has a mandate to promote Malaysia’s palm oil industry, was instrumental in establishing the RSPO, including its certification standards; moreover, since then, the Malaysian Palm Oil Association has remained influential in the governance of the RSPO (Hamilton-Hart 2015, 174; Teoh 2013, 36).
We can also see the influence of business in the discourse and claims of the RSPO, which frequently borders on open advocacy for more palm oil production and consumption. RSPO “factsheets” emphasize the versatility of uses, the efficiency of yields, and the affordability for poorer households as well as palm oil’s value for reducing poverty and promoting sustainability in developing countries. One factsheet, for instance, notes that oil palm is “GMO-free” and declares that it “is a more sustainable source of vegetable oil than other oil crops” (RSPO Secretariat, 2008). The RSPO website (www.rspo.org), under the tab “About RSPO” and the subtab “Sustainable Palm Oil,” lists five reasons for a “need” for even more palm oil production, asserting that it “fulfills increasing global food demand,” “supports affordable food prices,” “supports poverty reduction,” “safeguards social interests, communities and workers,” and “protects the environment and wildlife.”
Over the past decade, the WWF has been pushing for reforms within the RSPO and does not shy away from occasionally criticizing the organization publicly (WWF 2016). Since 2004, many other environmental and conservation NGOs have joined the RSPO, with thirty-eight NGO members as of January 2018, including WWF Switzerland, WWF Malaysia, WWF Indonesia, and WWF International. These NGOs participate for a variety of reasons and with a variety of goals, including striving to reform the RSPO from the inside (Ruysschaert and Salles 2016). Many rain forest activists, however, see the RSPO as little more than a tool of industry, arguing that these NGOs have been coopted to legitimize the organization’s true purpose: to expand oil palm plantations. Critics further note that the RSPO tends to favor large-scale growers and processors (Azhar et al. 2017; Brandi et al. 2015; Pichler 2013; Ruysschaert 2016; Saadun et al. 2018), while having little power to prevent growers and processors from illicitly gaining certification. In addition, critics point out that the RSPO was mainly designed to certify South–North trade and supply chains, and in recent years, rising exports of uncertified palm oil into developing economies such as India have been counteracting many of the gains from certifying palm oil for brand corporations and Western markets (Schleifer 2016; Schleifer and Sun 2018). Moreover, although interest in RSPO-certified palm oil would appear to be rising in China (Schleifer and Sun 2018), overall the RSPO has limited capacity to reach into the highly fragmented palm oil markets of the developing world, where the vast majority of importing firms have little interest in paying certification premiums and where large numbers of small retailers are selling a great array of unbranded products containing palm oil (Schleifer 2016, 53–55).
Rain forest activists have been especially critical of RSPO programs (e.g., “GreenPalm” and “mass balance”) that allow buyers to claim “certification” yet do not actually guarantee that all of the palm oil purchased meets RSPO standards (as is the case for what RSPO calls “segregated” palm oil). Greenpeace International (2013) argues that the RSPO is doing little more than “certifying destruction.” The comments of Bustar Maitar of Greenpeace International and head of the Indonesia Forest Campaign are typical: “RSPO, from my perspective, has been used for greenwashing by companies who want to expand their plantations into the forest” (quoted in Gies 2014).
Overall, critics assert, the RSPO is doing very little to enhance biodiversity conservation, protect endangered species such as Sumatran orangutans (Ruysschaert and Salles 2014), or even stop the clearing of forests and peatlands in countries such as Indonesia (Greenpeace International 2013). A key reason, the Environmental Investigation Agency (EIA) argues, is the auditing processes underlying RSPO certification. “Auditing firms are fundamentally failing to identify and mitigate unsustainable practices by oil palm firms,” the EIA finds. “Not only are they conducting woefully substandard assessments but the evidence indicates that in some cases they are colluding with plantation companies to disguise violations of the RSPO Standard.” The RSPO, the EIA concludes, in effect functions as a “firewall” to help protect palm oil buyers from criticism (Environmental Investigation Agency 2015, 3).
Despite Indonesia having considerable influence within the RSPO, after several TNCs ended contracts to purchase Indonesian palm oil (Brandi et al. 2013, 55), the Indonesian Ministry of Agriculture decreed a mandatory certification scheme for palm oil in 2009 (aiming to pilot the scheme in 2011 and eventually require all producers to comply). In part, the government set up this new public standard—what in English translates as “Indonesian Sustainable Palm Oil,” or ISPO—to gain more control and reduce foreign influence over the monitoring, auditing, and evaluation of palm oil certification (Wijaya and Glasbergen 2016). The government also wanted to establish a lower-cost certification option for smallholders and local corporations (Brandi et al. 2013, 57). Although the government has struggled to gain international recognition and price premiums for its certification standard (Macleod 2017), and although only around one-quarter of Indonesia’s palm oil corporations were ISPO-certified by mid-2017 (Jakarta Post2017), the government continues to present ISPO publicly as both a way to improve environmental management and as a strategy to increase Indonesian palm oil exports.
Revealingly, Indonesia’s certification standard is easier to meet than the RSPO’s, even more in line with Indonesian corporate interests, and allows firms to label exports as sustainably produced without going through the RSPO (Wijaya and Glasbergen 2016, 240). Not to be outdone, in 2013, the Malaysian government announced its own certification scheme, known as Malaysian Sustainable Palm Oil (MSPO). Operational since 2015, once again, industry interests dominate, and as with both the ISPO and the RSPO, the organization is reinforcing a narrative emphasizing the value for economic growth and community well-being of producing and exporting even more palm oil (MPOCC 2017). The discourse of the MSPO frequently sounds more like marketing than standard setting. Typical is the following from MSPO’s (2017) Palm Oil Health division:
Chefs may prefer Madagascar vanilla, Parmigiano-Reggiano cheese and Irish butter. Many foodies appreciate New York pizza, Florida oranges and Sumatran coffee. There is another food for which geography is important, Malaysian palm oil. Thankfully a new certification, Malaysian Sustainable Palm Oil (MSPO), may help you identify this high-end ingredient in your favorite products.
Over the past decade, as activists have raised awareness of the costs and risks of oil palm production, some growers have eliminated some of the worst practices, and most buyers with global brands have shifted toward purchasing offset certificates and certified palm oil, especially from the RSPO. Yet, as this article documents, the palm oil industry has not passively stood around under this barrage of criticism. It has become far more proactive, engaging and reshaping criticisms and channeling discourses, policies, and governing institutions toward a dichotomy of unsustainable and sustainable palm oil.
The resulting narrative blames unsustainable palm oil production—especially by independent smallholders—for causing deforestation, degradation, and violence. At the same time, the industry narrative emphasizes the value of expanding industrial production, corporate investment, global trade, and markets for so-called sustainable palm oil, not only as an edible oil for foods but also for cosmetics, hygiene products, and fuels. Such expansion is presented as helpful, even essential, for conservation, food security, and the prosperity of indigenous and local communities in tropical countries. Organizations such as the Malaysian Palm Oil Council, the Malaysian Palm Oil Association, the Indonesian Palm Oil Association, the RSPO, and the TFA are legitimizing and disseminating this narrative, as the case of the 2016 Marrakesh Declaration for Central and West Africa shows. Transnational agricultural firms and global brand buyers are further enhancing the power and reach of this industry-friendly narrative, especially among consumers, but also within governments and advocacy organizations. This overarching industry narrative does not mean that the oil palm industry is united or even cooperative, and, as this article showed, in some ways, competition among palm oil producers is further fragmenting and weakening governance. Certification schemes such as ISPO and MSPO, for instance, are clearly trying to help domestic oil palm growers, processors, and exporters meet rising international demand for certified palm oil without needing to go through the more internationally oriented RSPO.
The narrative of sustainable palm oil offers an enticing vision for going forward: more income, more jobs, and more development for poor countries without causing deforestation, land-clearing fires, or conflict within communities. However, this scenario rarely plays out, as expansion-oriented and trade-focused corporations extract profits from a highly fragmented and weakly governed global palm oil industry. In many ways, palm oil certification and offsetting are doing more to appease critics and reassure customers than improve management. Hoping to nudge along “laggards,” for instance, it is now common for rain forest activists to describe global brands (e.g., Nestlé, Hershey’s, and McDonald’s) that are promising to purchase CSPO as “leaders,” “front-runners,” and “forest-friendly.” Yet, as we saw in this article, industry dominates the ISPO, MSPO, and RSPO, and even in the case of the more independent RSPO, at least some of what the organization is calling CSPO is continuing to cause deforestation, climate change, biodiversity loss, and local food insecurity and conflict. Approximately 90 percent of the RSPO’s certified palm oil comes from Malaysia and Indonesia, places where bribery, smuggling, and forged documentation have long plagued land and forest management. In this context, the mixing of uncertified palm oil into batches labeled as sustainable is a growing problem. Furthermore, producing and selling more certified palm oil is not translating into less deforestation, as palm oil demand has shifted production into unbranded markets, new uses, and new sources of palm oil across Africa, Asia, and Latin America.
What insights does this analysis of the global politics of the business of palm oil offer for those trying to govern the world food system for greater sustainability? First, as Clapp and Scott highlight in the introduction to this issue, high industry complexity, the distancing of consumption, and the increasing fragmentation of governance are creating major challenges for the pursuit of global sustainability. Complexity, as the case of palm oil shows, can increase for many reasons, such as more producers across more countries, more intermediaries and longer supply chains, more buyers as consumption spreads, and more diverse forms of consumption. Governance within a particular TNC supply chain—such as Walmart’s one hundred thousand first-tier suppliers—has been consolidating somewhat as TNCs realize the business advantages of tracking, auditing, and pushing suppliers to reduce waste and inefficiencies (Dauvergne and Lister 2013; LeBaron et al. 2017). Still, the broader expansion of global production, certification schemes, and varieties of consumption is further fragmenting governance, with new environmental and social consequences emerging far from the centers of power.
Second, as Clapp and Scott further underline, and as the case of palm oil confirms, the sustainability narratives for global agriculture can be usefully understood as arising out of cycles of contestation, with unceasing struggles to control and reframe discourses within particular political economies (Neville 2015). Grassroots and civil society resistance to corporate and state power is clearly ongoing, even as more NGOs embrace the business narrative of palm oil sustainability. Importantly, however, the analysis of palm oil points to the power of industry to defuse resistance by channeling criticism into a category of “unsustainable” agriculture, while simultaneously building support for expanding corporate investment, industrial production, and the global trade of so-called sustainable agricultural products. The analysis further shows how the industry narrative of sustainability helps sideline far-reaching critiques of the global agricultural system, such as the increasing concentration of corporate power, the injustices of the global industrial food complex, and the neoliberal policy advice of international development agencies such as the FAO and the World Bank. It also demonstrates the power of the agrifood industry to marginalize movements calling for across-the-board reforms to the global agricultural system, such as prioritizing “food sovereignty”—the idea that land and food production should primarily serve the nutritional and cultural needs of farming households, agricultural communities, and indigenous peoples (Clapp 2016; Clapp and Fuchs 2009; Fuchs and Kalfagianni 2010).
Finally, and relatedly, the analysis of palm oil reveals the ways the narrative around the dichotomy of unsustainable–sustainable is translating into policies and institutions to support the interests of TNCs profiting from large-scale agricultural production and trade. These policies and institutions are doing far more to advance the commercialization, “trade-ification” (Clapp 2017), intensification, and industrialization of global agriculture than to promote ecological sustainability on a global scale. There is clearly, as Clapp and Scott urge in the introduction to this issue, a need for more research on the consequences of the politics of how ecosystems and food governance intersect, especially by those trying to understand why global food governance is so often failing to prevent the social and environmental costs of agriculture from continuing to rise.
The author is grateful to the Social Sciences and Humanities Research Council of Canada for providing research funding for this article (grant 435-2014-0115).