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Report

Palm Oil's Black Box - How agribusiness giant Olam’s emergence as a major palm oil trader is putting forests in Southeast Asia and Gabon at risk

...Olam failed to publicly disclose the names of its suppliers, the locations of its mills, or any information about supplier performance on sustainability, creating a massive black box that could be hiding deforestation, peatland clearance, and human rights abuses in its supply chain. Moreover, Olam’s deadline for supplier compliance with its palm oil sustainability policies isn’t until 2020, which could have the perverse incentive of creating amongst its suppliers a race to deforest for up to four more years...since March 2012, Olam has cleared around 19,000ha of forests within Olam’s oil palm concessions in Gabon...Olam needs to guarantee transparency in its supply chain, immediately require its suppliers to comply with its sustainability policies, and embrace a strong ‘No Deforestation, No Peat and No Exploitation’ (NDPE) commitment that adheres to the HCSA methodology...Olam has more than 16,000 global customers, and names Pepsico, KraftHeinz, ConAgra, Unilever, Mondelez, and Nestlé among them, meaning that these companies are tied to Olam’s efforts to undermine sustainability progress in the palm oil industry...In 2015 alone, more than two million hectares of Indonesian forest and peatland went up in smoke, due in significant measure to purposeful burning to clear land for palm oil and paper plantations...69 million people across the region were exposed to toxic haze as a result of last year’s devastating wildfires in Indonesia; an estimated half a million people in Indonesia sought medical care because of haze and Singapore recorded over 77,000 visits to clinics and polyclinics for haze-related ailments. Harvard and Columbia scientists recently estimated that 100,300 people likely died prematurely as a result of inhaling smoke particles from the 2015 toxic haze emanating from Indonesia’s vast forest and peat fires. In Singapore specifically, they estimated 2,200 premature deaths occurred...Olam’s principal bankers include Australia and New Zealand Banking Group Limited, BNP Paribas, Natixis, Commerzbank AG, Credit Suisse Group, JPMorgan Chase Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd, among others. Those providing Olam with loans for its Gabon palm oil operations include: Ecobank, Afreximbank, BGFI Bank Gabon and the Central African State Development Bank (BDEAC). Many of these banks have committed to environmental and social responsibility, and in some cases, forest protection. Mitsubishi Corporation is the second largest shareholder, and the World Bank’s International Finance Corporation (IFC) has an equity stake, while Norway’s pension fund (Norges Bank Investment Management or NBIM) holds shares in Olam...In Gabon, Olam is by far the major palm industry player, and is operating in an area at high risk of deforestation, characterized by corruption, lack of a free press, weak civil society, and poor governance...Olam has entered into two separate joint ventures with...Gabon to develop its palm oil business...Olam received a 16-year income tax holiday beginning in Fiscal Year 2011...and a 300,000 ha pledged landbank from Gabon..15,659 Gabonese have been enrolled in the GRAINE scheme, each of whom will receive approximately seven hectares and who will then sell their oil palm harvests...to Olam...the program will be rolled out in nine provinces and aims to cover a total of 200,000 ha with 30,000 participants across 1,600 villages by 2020. [Refers to SIFCA Group, Acacia Investments, Felda Global Ventures Holdings Berhad (FGV), Cargill, Sime Darby, Olam Rubber Gabon SA, Outspan Bolovens Limited (a subsidiary of Olam], 

Part of the following stories

Un nouveau rapport montre comment le développement d'Olam menace les forêts d'Asie du Sud-Est et du Gabon; l'entreprise répond

Olam creating "black box" of palm oil from unknown sources, fuelling deforestation "from Gabon to Indonesia" - NGO report