Yesterday’s report on Singapore-based palm oil giant Olam titled “Palm Oil’s Black Box” by Mighty highlights again that third-party suppliers are key to assess whether a palm oil giant is haze-free. In practice, palm oil giants should know exactly the locations of the mills and their supply base, i.e. supply chain transparency, in order to know whether their suppliers are causing the haze.
As more than 99% of palm oil supply come from Olam’s third-party suppliers in Indonesia and Malaysia, Olam needs to ensure that these third-party suppliers operate in a haze-free manner. Positive steps have been taken. Since October 2016, all third-party suppliers are required to comply with no fire and no deforestation according to Olam’s supplier code. In addition, Olam has a goal of end-to-end total traceability to the mills by the end of 2020 with a roadmap. Upon the release of the report, Olam also published the list of 14 third-party suppliers in their response.
However, gaps remain. Olam’s no deforestation policy may not be stringent enough, which means Olam’s suppliers could continue create fire-prone landscapes. Despite Olam’s commitment to sustainable palm oil, less than 0.5% of the total volume in 2015 is certified sustainable by RSPO. The issue at hand is also a great opportunity for Temasek, the major shareholder of Olam, to act for the good of Singaporeans.
Acknowledging the positive steps taken, PM.Haze wishes to see Olam resolving the gap in its deforestation policy, increase the supply chain transparency and ensure third-party suppliers do not contribute to the haze. Furthermore, companies, governments, financiers, civil society groups and citizens need to work together towards the 2020 haze-free ASEAN goal. All stakeholders need to quickly resolve the gaps in awareness, knowledge, policy and implementation. The clock is ticking, we may still experience severe haze if the root causes are not resolved, and global warming waits for no one.
Read more on:
- “Palm Oil’s Black Box” summary report: http://bit.ly/2hHDVDL
- Full technical report: http://bit.ly/2gv33fS
- Response to Olam’s initial response “Olam’s Newfound Transparency Constructive But Not Enough”: http://bit.ly/2hyrH4q
- Sustainable Palm Oil Policy (Oct 2016): http://bit.ly/2hs67va
- Interim Progress Report on Olam Palm Sustainable Supply Chain and Traceability: Oct 2016 http://bit.ly/2guVDZU
- Olam International’s response to Mighty Earth and Brainforest report: http://bit.ly/2gUo84l
High Carbon Stock (HCS) Convergence Agreement: http://bit.ly/2hoJhUU