Palm Oil

Last updated: September 2015


Palm Oil



The Product Guides in this report share a common ingredient with an estimated 50% of supermarket products: palm oil.

Bulking out the shops of the industrialised world whilst its production destroys rainforests, biodiversity and lives elsewhere, it has become one of the defining consumer issues of our time.  

In this report we take a look back over 100 years of palm oil expansion and resistance to it; hear from organisations pushing for change at the production and the consumption ends of the chain; get your views on whether to buy or boycott; examine coconut oil as an alternative and give a round up of consumer actions.



The growth of the palm oil industry


Between 1990 and 2010, 8.7 million acres of rainforest in Indonesia, Malaysia and Papua New Guinea were cleared for palm plantations, an area nearly twice the size of Wales. Indonesia, the world’s largest producer of palm oil, has seen a 600% growth in the area covered by plantations over roughly the same period, associated with the loss of 40% of its lowland rainforests.[1]

Destruction of the rainforest in Indonesia, photo credit: David Gilbert/RAN

The industry is now expanding into the rainforests of Central Africa, with more than a million acres under imminent threat.[2]

Palm oil is said to be found in 50% of supermarket products, from food to cleaners to cosmetics. This controversial ingredient may be present in some form in nearly every room of your home. It is widely used for its properties and because it is cheap. Its low price is partly due to its high yield, but also because, as with other mass produced crops, the environmental and social costs go unaccounted for.





The plight of orangutans has been a key feature of palm oil campaigns, due to 80% of their habitat being destroyed in the last 20 years and the serious risk they face of extinction in our lifetime.[3]

Orangutan with baby, photo credit: Nathan Rupert.


The list of other mammals affected includes elephants, rhinos and tigers. The tropical forests under attack are also where much of the world’s remaining biodiversity is found.





Carbon released by deforestation is a major contributor to climate change, accounting for about 10% of global greenhouse gas emissions. 65% of the world’s tropical peatlands are located in Indonesia, and when plantations are established on peat, emissions are even worse.

Palm oil plantation, Indonesia, photo credit: RAN


“Up to 66% of all climate-change emissions from oil palm plantations is estimated to come from the 17% of plantations established on peat soils,” says the WWF.[4]





Social impacts are also wide ranging, and economic gains are far from evenly distributed. More than 20 million people, comprising hundreds of distinct language groups, depend on Indonesia’s forests. Many traditional communities have lost their lands to plantations. The Indonesian National Lands Agency registered over 3,000 conflicts between palm oil companies and communities in 2013, and the drafting in of migrant labour for plantations causes further problems.

Woman removing palm kernels, photo credit: IITA.


In 2014 the US Department of Labor listed palm oil as one of 55 goods produced globally by forced labour. It is estimated that there are between 72,000 and 200,000 children working on palm plantations in Malaysia.

Expansion of the industry has been blamed for an intensification of land and wealth concentration. A World Bank analysis found that “only smallholder production – not production by private estates – is positively correlated with poverty reduction.”[5]

The founder of the Indonesian Peasant Union, Henry Saragih, says: “The presence of palm oil plantations has spawned a new poverty and is triggering a crisis of landlessness and hunger”.[6] Meanwhile, palm oil is being siphoned off into processed goods around the world.



The Roundtable on Sustainable Palm Oil


In 2004, pushed by the WWF, the RSPO was established to develop and implement environmental and social standards for the industry. Its now 2000-plus members are mostly processors, traders and consumer goods manufacturers, but also include growers, retailers, NGOs and investors.

20% of palm oil globally is now certified to RSPO standards. However, the organisation has been accused of ‘greenwash’ for enabling companies to appear to be more sustainable than they are through a process that “on the one hand seeks to improve company practices but, on the other hand, seeks to legitimise continued expansion”.[7]

The organisation also stands accused of failing to adequately audit companies or penalise them when they break the rules. “The credibility or efficacy of the RSPO is entirely reliant on NGOs... to look at what’s actually happening and try and enforce the standard. If we don’t do it, any number of sins will just get rubber stamped and greenwashed,” according to Tomasz Johnson of the Environmental Investigation Agency.[8]


For more information on the RSPO, see our RSPO FAQs.



Beyond RSPO


Widespread criticism of the RSPO for weak standards and failure to enforce them has led campaigning organisations to pressure companies into going further than RSPO requirements. The current push, from organisations such as the Union of Concerned Scientists, is for a commitment to deforestation- and peat-free (DPF) palm oil, and conflict-free palm oil. In 2014, ‘no deforestation’ pledges from companies using palm oil were up 171% on the previous year.[9]

Of the companies rated in this Issue, six have DPF commitments: Arla, Marks & Spencer, Mars, Mondelez, Nestlé and Unilever.

RSPO itself has come up with an enhanced set of standards that incorporate these issues. In June companies including Walmart and Starbucks called on the RSPO to make these new RSPO+ standards compulsory.[10]



Buy or boycott?


Thinking truly sustainable palm oil impossible, many in the EU, US and Australia advocate avoiding it altogether. But there is a growing recognition that even if all the big western manufacturers stopped using palm oil, the problems of unsustainable production would not go away.

India and China each consume more palm oil than the EU, and production is projected to increase 50% by 2020.[11] Indonesia has just increased subsidies to boost palm oil production for biofuel.[12] If countries with more developed consumer campaigns turn away from palm oil altogether, the most damaging forms of production may prevail.

Furthermore, boycotts could push companies to use other oils instead, which could cause even more damage. Oil palms produce far more per acre than other vegetable oil plants.[13] Possible ‘synthetic biology’ substitutes are a whole other minefield which we will cover in a future issue of the magazine.

We asked our readers whether they thought we should buy sustainable palm oil or boycott it. See our forum for their thoughts and to add your own.



The role of legislation


Strong government legislation may be essential to halt the negative impacts of palm oil production: even palm oil traders are asking for stronger regulation in Indonesia.[14]

Stricter standards could also be developed for what will be accepted by consuming countries: an EU Action Plan on deforestation was called for by Greenpeace and other NGOs in May 2014.[15]

The Rainforest Foundation are working with governments in the Congo Basin to develop structures at this early stage of the palm oil industry’s expansion in Africa to try to avoid repetition of the problems that have devastated South East Asia.



Pushing the industry to improve


Demand for ‘certified sustainable palm oil’ (CSPO) was up 65% in the first two quarters of 2014 compared to the same period in 2013.15 This may be partly due to the long-campaigned-for European law, effective from December 2014, which requires palm oil to be specifically labelled on food packaging rather than just called ‘vegetable oil’. But still only half of all CSPO is bought as such, with the rest selling for the lower price of uncertified oil.[16] Not exactly an incentive for growers to switch to sustainable production.

As consumers we can avoid the worst offending companies, but we clearly need to push the industry as a whole to be more responsible. For more ideas on what you can do, see Take Action.



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3 Conflict Palm Oil, Rainforest Action Network, 2013 














17 In 2014 about 5 million tonnes of CSPO was sold as such, out of nearly 11 million tonnes supply.