Palm Oil Giant Launches Web Portal to Make Its Supply Chain Transparent

Wilmar International Ltd., the largest palm oil producer in the world, is the first industry player to make its palm oil supply chain transparent via an online platform. The decision is expected to help the palm oil company achieve its goal of eliminating deforestation and exploitation from its operations.

Wilmar mapped out its supply chain and listed all of its palm oil mill suppliers in Indonesia and Malaysia on a dashboard website. The dashboard, which went live last week, is a result of a collaboration with the Forest Trust. The company’s supply chain map shows where its refineries in Indonesia and Malaysia are located, and includes a traceability summary for each one.

The dashboard includes a mechanism to report improper activities. All concerns are logged under the Grievances Procedure, and progress and findings will be reported on the dashboard.

Wilmar began to map its supply chain early last year. Indonesia and Malaysia are the priority because most of the world’s palm oil comes from those two countries. However, Wilmar is also mapping its supply chains in other regions, including Africa, India and China.

The company announced its commitment in December 2013 to stop purchasing palm oil from suppliers whose product is grown on deforested land or who exploit people. Wilmar also signed a pledge, with other industry players, to cut deforestation in half by 2020 and eliminate it in 2030.

Advocates are applauding the company's latest move as a big step forward for the industry:

“Wilmar is the first agro-industrial giant to offer a way to follow palm oil all the way back to the mills where the oil is processed,” said TFT founder Scott Poynton in a statement.

“No one has ever aimed for this level of transparency in agriculture commodities. Wilmar has more than 800 palm oil suppliers, so the company covers the bulk of the industry,” added Glenn Hurowitz, chairman of Forest Heroes. “If the online tool released [on Jan. 22] does lead to real engagement between industry, local civil society, and all stakeholders, it will dramatically accelerate the transformation of the palm oil industry.”

The expansion of palm oil comes at a steep environmental price

Palm oil is the most widely used vegetable oil, and it is found in 50 percent of everyday products, ranging from processed foods to personal care products. Over the last few years, global demand for palm oil has greatly increased. There is a reason why: Palm oil is the cheapest vegetable oil to produce and has the highest yield among oil crops, according to Rainforest Rescue. More than 90 percent of the palm oil produced worldwide is used to make food products, cosmetics, detergents and candles.

The increase in palm oil demand has not been good for forests, including rain forests, in Indonesia and Malaysia. Palm oil plantations in Indonesia cover an area the size of Maine at 9 million hectares, and are projected to cover 26 million hectares by 2025. Palm oil plantations are the leading cause of rain forest destruction in Indonesia and Malaysia, according to a report by the United Nations Environment Program (UNEP).

Image credits: 1) CIFOR; 2) Wakx