Trading company wins cautious praise for palm oil production practice shift

By Aerin Einstein-Curtis

- Last updated on GMT

© GettyImages/slpu9945
© GettyImages/slpu9945

Related tags Palm oil Sustainability feed crop production Feed ingredients

Mighty Earth is welcoming changes to POSCO International’s policy on deforestation and palm oil production but continues to watch for positive on the ground change in Indonesia.

The environmentally-focused and US-based organization announced the release of POSCO International’s new zero-deforestation policy​ on Monday [March 2]. The organization provided input on a draft version of the new policy and has been working for several years to halt palm oil-driven deforestation in Papua, Indonesia, which it attributes to POSCO and other companies.

The new policy addresses palm oil production, protects rainforest land, supports the rights of indigenous communities, and pledges compensation for the company’s deforestation legacy in Papua, Indonesia, according to Mighty Earth.

Palm oil in feed 

Mainly two kinds of palm products are being used in the feed industry - palm kernel expeller (PKE) and palm oil, which can be made up of different blends.

PKE is the meal that remains when oil has been extracted from the palm kernel; it has a high fiber content that makes it a valuable protein-based feed for cattle and other animals.

In the feed sector, palm oil is used as a vegetable source of fat, fatty acids, and triglycerides. Fats and oils are used as energy sources, to supply dietary essential fatty acids, including linoleic and linolenic acids, that can be synthesized by the animal, to aid in the absorption of fat-soluble vitamins, and to provide specific bioactive fatty acids.

Mighty Earth is engaged with saving rainforests and natural ecosystems global from damage linked to agribusiness, said Deborah Lapidus, senior campaign director at Mighty Earth. “Palm oil production is a leading cause of deforestation in Indonesia and Malaysia, which are home to the third-largest tropical rainforest areas in the world,” ​she added.

Since starting its work on palm oil production in 2011, the group has managed to get several palm oil companies to adopt “No Deforestation, No Peat, and No Exploitation”​ (NDPE) policies, she said.

“We have engaged with various company executives in both South Korea and Indonesia, and finally, when the company was seriously ready to move forward with its NDPE policy, it reached out to us for feedback,”​ she told FeedNavigator about the organization’s work with POSCO.   

Concerns about rainforest destruction

Although there has been an improvement in company policies, there continue to be challenges protecting rainforests in some areas, said Lapidus.

“We've seen new threats emerge to Indonesia's largest area of remaining pristine rainforest in Papua, Indonesia, which has quickly become the next major frontier for rogue palm oil companies and other agribusiness expansion in Indonesia,” ​she said. “This area is extremely remote, historically cut off from journalists and civil society, and companies had been operating there with very little scrutiny -- driving massive destruction and harm to the local indigenous peoples.”

Mighty Earth reported on the situation in 2016 and noted deforestation it attributed to POSCO International – previously called POSCO Daewoo, she said. At the time, other companies were starting to improve their practices.

“This was very striking,” ​Lapidus said. “So, we launched a campaign with allies in Korea and Papua, Indonesia, to expose the harm caused by both of these South Korean-origin companies in Merauke, Papua to both stop further destruction and put Papua on the map as a conservation priority for the industry and the global community.”

New policy highlights and next steps

The new policy could be “hugely precedent-setting,”​ said Lapidus. It includes a pledge to compensate for deforestation, she said. 

The damage done to rainforest areas in Southeast Asia, native species and inhabitants cannot be undone by adopting a new policy, she said. However, investing in restoration work in those regions “can contribute to a positive future for Southeast Asia that can bring back critical habitats, capture carbon, and prevent future forest fire disasters.”

If POSCO follows through with reconstruction work, it would set an example for the palm industry and commodity agriculture as other companies have not been as willing to “seriously address past harms,” ​said Lapidus. “It also would signal a significant transformation in the palm oil industry if one of its most rogue actors leads the way on conservation and remedy – but we have a long road ahead to get there.”

The organization would have liked additional detail about POSCO’s implementation plan including a statement regarding the company’s deforestation liability and the steps it is planning to take to address the pledge on compensation and resolve grievances from local communities, she said.

Going forward, Mighty Earth is watching for “action on the ground” ​said Lapidus. The group is also looking for an independent expert to oversee the grievance resolution process.

Potential steps the company could take might include restoring polluted waterways, returning customary lands where possible, compensating communities for land and lost livelihoods or other steps requested by communities, she said.

“POSCO International needs to acknowledge the scale of its deforestation legacy – which our mapping shows is 27,000 hectares – and put real money toward conserving an area of forest greater than what it has destroyed,”​ she said. 

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