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25/08/2016

EU aims to crack down on unsustainable palm oil and illegal logging

Development Policy

EU aims to crack down on unsustainable palm oil and illegal logging

Unsustainable palm oil production can have a huge negative impact on the environment and human rights.

[Michael MK Khor/Flickr]

In the next five years, the major European players, including Germany, want palm oil production to become 100% sustainable and to see an end to illegal logging. EurActiv Germany reports.

It’s no secret: European companies regularly violate the rights of thousands of people in developing and emerging countries. Whether through the exploitation of tin mines in the Republic of Congo or atrocious working conditions in Bangladeshi textile factories. Over the next six months, the Dutch government wants to use its presidency of the European Council to apply a “Fairtrade cure” to the global supply chain and to show that it is serious about the new UN development goals.

A crucial first step was taken on Monday (7 December), at a conference on sustainable supply chains in Amsterdam. In a joint statement, Denmark, Germany, France, the Netherlands and the UK announced that they would seek to make palm oil production 100% sustainable by 2020. In addition, they announced that they would seek an end to illegal deforestation by private companies by 2020 as well.

Over-exploitation of African palm oil

“We’ve seen the devastating forest fires that have hit Indonesia. Unfortunately, this is not the first case. There are too many land conflicts and social tragedies in South-East Asia as a result of illegal logging. We have to fear a repetition of these tragedies in Africa, which is the ‘new frontier’ of palm oil overexploitation. We cannot sit on the fence on this issue,” explained the Dutch Minister for Foreign Trade and Development Cooperation, Lilianne Ploumen.

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Palm oil is the planet’s most important plant oil, enjoying a 40% share of the global market. It is cost effective and versatile and can be found in every other supermarket product, such as margarine, chocolate and cosmetic products. It can also be used as a biofuel. In many cases, huge swathes of forest are cleared in order to grow the crop. This has mostly occurred in South-East Asia, but has been increasingly carried out in sub-Saharan Africa.

“In addition to the immense ecological concerns, there are also social problems such as illegal land grabs and precarious working conditions involved in the palm oil industry,” said Irene Knoke, author of a study on palm oil for the Südwind Institute. “Sometimes there are massive human rights violations and, very often, migrants have to work in slave-like conditions.”

Oversupply

Reports of this nature suggest that a 100% Fairtrade target seems to be a difficult ask. The Roundtable on Sustainable Palm Oil (RSPO) recently set out minimum standards for palm oil production. To obtain certification, producers must satisfy 160 separate criteria. In Germany, only around 50% of companies use at least partially certified palm oil.

“For many SMEs, sustainable palm oil is too expensive and they fear that it would impact on competitiveness,” said a representative of the processing industry. A case in point: the largest palm oil producing country, Indonesia, produces tonnes of sustainable palm oil every year, but due to lack of demand, around half remains unsold every year. At the same time, Europe is the most important importer of the oil and “Europe can be an important ‘game changer’,” according to the Amsterdam declaration.

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How the objective of the declaration will actually be achieved is still up in the air. The signatories of the text have called upon the European Commission to create an intra-European dialogue between businesses, civil society and political leaders. Large companies and the Indonesian government have called for EU import duties on non-sustainable palm oil and the WWF has advocated the involvement of the private sector and more action from Brussels. In regard to deforestation, the Commission has to act and hold companies and governments accountable.

Malmström wants ambitious sustainable development in FTAs

EU Trade Commissioner Cecilia Malmström welcomed the Amsterdam Declaration and wants to include the deforestation action plan in the Commission’s legislative initiatives. Malmström also wants to increasingly target the smart phone industry, due to its use of conflict minerals, and the textile industry, as a result of human rights violations in Bangladesh and India. “We need responsible supply chains,” she said on Monday (7 December), in Amsterdam.

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To achieve this, Brussels wants to include binding sustainability chapters in free trade agreements (FTAs), such as TTIP, which is still being negotiated. “Both sides must respect international principles of labour laws and climate protection,” Malmström added. This also means promoting more responsible business methods. Countries, with whom the EU does not have an FTA, should be rewarded with other incentives, if these standards are guaranteed, such as trade incentives under the GSP+ component.

These measures are an important facet of the new Trade for All strategy that Malmström presented a month ago. Whether it will be effective remains to be seen and observers have their doubts. “In practice, implementing these human rights clauses in FTAs could be difficult, countries such as India reject strong social standards like this,” said San Bilal of the European Centre for Development Policy Management, a think tank based in Brussels. “The Commission must be clear in which countries it is targeting and hold private companies to account,” he added. Malmström has to walk the walk, not just talk the talk.

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At the beginning of the month in Washington, the Commissioner presented a proposal for a sustainable development chapter for the TTIP agreement. The concept “offers the most ambitious provisions ever put forward on these issues to any trading partner”, explained Malmström. Whether they will be successful in including the proposal is still unclear and the US government is still yet to respond.

Further Reading