A scorecard released recently by Friends of the Earth found that the largest consumer goods companies are not holding Astra Agro Lestari (AAL) accountable for ongoing human rights and environmental violations in Central and West Sulawesi, Indonesia.
The scorecard shows that many consumer goods companies continue sourcing palm oil from AAL. Kellogg’s, PepsiCo, and Mondelez scored the worst. However, there is a bit of good news. Hershey’s and Procter & Gamble scored higher because they recently decided to suspend business ties with AAL. All 16 companies with supply chain links to AAL are members of the Roundtable on Sustainable Palm Oil.
“Despite frequent talk of sustainability and membership in the RSPO, household brands working with AAL continue to use land grabbing, criminalization, and environmental destruction as hidden ingredients in their products,” said Jeff Conant, Senior International Forests Program Director at Friends of the Earth U.S., in a statement.
The Low-Down on Astra Agro Lestari’s Palm Oil Production
AAL is the second-largest palm oil company in Indonesia and controls 73,390 acres. The company has 41 palm oil subsidiaries in eight Indonesian provinces. AAL is responsible for land rights abuses and environmental destruction, according to a report released in 2022 by Friends of the Earth. Three of AAL’s subsidiaries (PT Agro Nusa Abadi, PT Lestari Tana Teladan, and PT Mamuang) are responsible for the abuses and destruction.
AAL’s parent company, Astra International, the largest independent automotive group in Southeast Asia, owns almost 80 percent of its shares. The largest shareholders in AAL are U.S. asset managers BlackRock, Vanguard, and Capital Group. Blackrock and Vanguard each owned around $42 million or 16 percent of shares as of November 2021.
AAL adopted a sustainability policy in 2015 that applies to “all current and future operations and subsidiaries, including any refinery, mill, or plantation that we own, manage, or invest in, as well as all third parties from whom we purchase.” The policy commits to protecting forests, peatlands, and human rights through three principles: no deforestation, conservation of peatlands, and respect for human rights. The policy commits AAL to comply with the U.N. Guiding Principles on Business and Human Rights. All three plantation subsidiaries mentioned in the report violate the sustainability policy.
The Problem with Palm Oil
Palm oil, produced from trees grown in the tropics, is used in food products, detergents, and cosmetics. More than half of all packaged goods in the U.S. contain palm oil. Global production and demand for palm oil are rapidly increasing. Around 90 percent of the world’s palm oil comes from a few islands in Indonesia and Malaysia. Producing palm oil impacts the environment. Tropical forests converted to palm oil plantations devastates native plant and animal species. Habitats destroyed when tropical forests are cut down contain rare and endangered species.
Palm oil production even impacts national parks. Forty-three percent of Tesso Nilo National Park in Sumatra, which provides a habitat for the endangered Sumatran tiger, is overrun with illegal palm oil plantings. Tropical forests are often burned, releasing smoke and carbon, which causes pollution and contributes to climate change. The smoke and haze impact Southeast Asia, causing health issues.
Palm oil is a driver of forest destruction in Southeast Asia. It is the most commonly produced vegetable oil, at 66 million tons a year. Palm oil plantations cover over 66 million acres. Tropical forests destroyed and replaced by palm oil trees contain almost no biodiversity in an area the size of the country of New Zealand. Indonesia is the world’s largest palm oil producer and ranks 10th for carbon emissions.
What You Can Do
There is something simple you can do to help reduce the palm oil industry’s destruction. Stop buying consumer goods with palm oil. Read labels religiously. If you see palm oil listed as an ingredient of a product, exercise the power of the pocketbook and put it back on the shelf.