Part of: Palm oil and deforestation
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Governments must rejig rules to fit multinationals' treehugger goals

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Thursday, 30 October 2014 10:34 GMT

In a 2011 file photo, an orangutan is pictured after being released into the forest at Seruyan, of Tanjung Puting National Park, central Kalimantan. REUTERS/Stringer

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Asian palm oil producers pledge to stem deforestation, but government regulations are getting in the way

LONDON, Oct 30 (Thomson Reuters Foundation) - When the world's largest palm oil processor decided to make part of its plantation on the island of Borneo into a conservation area, there was one problem.

The Indonesian government does not allow land inside agricultural concessions to be set aside to protect trees or, as in this case, orangutans.

So Singapore-based Wilmar International Ltd teamed up with the Central Kalimantan provincial governor and Borneo Orangutan Survival Foundation in a tripartite agreement to turn the 4,000 hectares of pristine forest into a refuge for the 42 primates.

Several major Asian palm oil producers over the past year have pledged to halt or stem forest loss, but the challenge Wilmar faced illustrates how regulations can impede corporate efforts to reduce deforestation linked to their activities.

Companies at a conference this week in London on combating deforestation spoke of how policies and laws - or the lack thereof - can hinder forest protection.

In Peru, for example, smallholder farmers cannot claim title to land unless they start clearing it, experts said, while in many places, corrupt officials turn a blind eye to illegal logging.


However, the time may be ripe for change.

At the U.N. Climate Summit in New York last month, more than 30 countries and around 40 companies pledged to halve the rate of loss of natural forests globally by 2020, and end it by 2030.

Former EU trade commissioner Peter Mandelson said the politicians he meets around the world - from Beijing to Singapore and Dar es Salaam - have grasped the importance of controlling the environmental impact of industrialisation and production for global markets.

"They have a much clearer sense of the need for a credible sustainability policy - not to satisfy the demands of Western governments... but to meet the expectations of their own local populations, especially in managing the impact of growth on the living environment of their citizens," he said.

Mandelson, who was also a UK cabinet minister, highlighted the legally binding agreements the European Union has signed or is negotiating with 15 developing countries to ensure that timber and timber products exported to the EU come from legal sources.

Some green groups say those agreements merely shift the illegal timber trade to markets with lax rules, such as China.

But Mandelson said any gains made from permissive practices would be short term, and urged other countries to adopt standards as strict as those of the EU and cooperating governments.


Producers and retail brands are now moving ahead to address deforestation and sustainability because they feel "the old 20th century model in some of these countries" no longer does the job, said Mike Barry, who directs the responsible sourcing strategy for UK retailer Marks & Spencer.

New approaches are emerging, such as the Tropical Forest Alliance public-private partnership bringing six governments together with companies, green groups and think tanks to help achieve zero net deforestation in tropical forest countries by 2020.

Barry told the Thomson Reuters Foundation that having the right regulations and policies in place would make his job easier because he would not have to "micromanage every individual product and raw material".

Jeremy Goon, Wilmar's chief sustainability officer, said multinationals adopting green procurement policies would push local competitors to try to keep up with them, thereby increasing the demand for sustainable products and procurement.

Businesses should go a step further and press politicians for change to stop the world's forests shrinking further, said Andy Tait, a senior campaign advisor with Greenpeace UK.

"Companies have to get involved in the political discussion to reform regulations, because if we don't improve forest governance, we will lose the battle," he said.

(Reporting by Megan Rowling, editing by Alisa Tang)

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