Palm oil is an essential element in our daily life. It is found in numerous foodstuffs, in cosmetics and cleaning products. Palm oil is currently still an important ingredient in European biodiesel. In order to satisfy the growing demand for this plant-based oil, forests are cleared to make way for palm oil plantations in countries such as Indonesia and Malaysia, as well as Colombia, Liberia and other areas. This results in serious biodiversity loss and climate damage. IUCN NL works to make palm oil production greener by supporting social organisations, improving sustainability standards and by urging government and financial institutes to demand sustainable production.
Encouraging Dutch players to promote increased sustainability
Dutch companies and financial institutes play a major role in the commercial chains of palm oil. We bring together social organisations and experts that influence Dutch and European authorities, businesses, banks, asset managers and pension funds, each in their own capacity, to make the palm oil chain more sustainable
In turn, we contribute knowledge – also to financial bodies – in the field of biodiversity and the quality of sustainability standards, and we advocate for European legislation to make sustainability mandatory.
Advice on voluntary standards for palm oil
One of the ways to limit damage to nature is the broad application of strict sustainability standards. Six different standards are used worldwide in the palm oil chain. In 2018, we examined which palm oil standard scores highest in terms of biodiversity and monitoring requirements. It was used to advise companies, financial institutes and governments to adopt the Roundtable on Sustainable Palm oil (RSPO) standard. However, this standard can also improve monitoring in practice; this is what we advised the RSPO.
- Between 2006 and 2016, the acreage covered by palm oil plantations increased from 8 to 21 million hectares.
- 2019: the Dutch asset managers Robeco, NN Invest and Actiam issued a joint statement about their contribution to the transition to sustainable palm oil and two of them were influenced by IUCN NL and WWF Netherlands, member of the RSPO.
Making sustainability mandatory by law
We also want the European authorities and financial institutes to incorporate sustainability in their legislative frameworks and requirements for loans and investments. Sustainability can no longer be voluntary.
Financial institutes can exert considerable influence on the chain due to their investments. Dutch asset managers such as Robeco and NN Investment Partners are actively involved in making the palm oil chain more sustainable. However, they often lack reliable information about the behaviour of specific companies.
On the other hand, local social organisations do have access to this information. We work closely with these organisations and can put them in touch with influential asset managers. This is how Robeco and NN Investment Partners obtained evidence via one of our partner organisations in Indonesia about a certain company that was violating the rights of local residents and causing damage to nature. They subsequently confronted the company in question with this evidence.
Minimum criteria for sustainable palm oil in the EU
In the Netherlands the palm oil used in food is now almost exclusively responsible palm oil. The situation is also improving in other EU countries, but it is not yet commonplace. As a result, IUCN NL focuses on European legislation, in relation to palm oil as well as soy. For the Deforestation Law the EU is to present in 2021, we provided five minimum criteria with which (palm oil) companies should have to comply before European companies and financial institutes can do business with them.
Support for local interventions
IUCN NL not only applies its expertise at the level of government, the business community and NGOs in the Netherlands and Europe. We also actively support social organisations in countries such as Indonesia and Colombia. We advocate for aid for farmers to produce sustainable palm oil. After all, a very large proportion of palm oil is not destined for the European market: what matters to IUCN NL is the effect of interventions on biodiversity and on local people.
Palm oil is an important product with many applications, which produces yields four to ten times as high per hectare as other plant-based oils. It is also a source of income for many small-scale farmers, such as those in Indonesia. This means it is better to produce palm oil sustainably than to boycott it. If palm oil is replaced by other oils, the production of less land-efficient oil crops will increase. The significant worldwide losses in biodiversity will simply shift elsewhere, instead of being stopped (IUCN, 2018). Putting a brake on the growth of plant-based oils is important, as is more effective application of sustainability conditions for their production. This applies to palm and soy oil, as well as to other oils.
IUCN NL considers robust sustainability conditions imposed by the government, market players and financial institutes as an important part of the mix of measures to make palm oil more sustainable. However, limiting or stopping further expansion – as in the case of the moratorium on new palm oil permits in Indonesia – also remains extremely relevant, as does sparing nature and sufficient land for growing food in every country where palm oil is produced.