30.01.2019 (www.businessgreen.com) -  Corporate sourcing policies are delivering only partial success in curbing deforestation for palm oil production in Indonesia, investigation finds

Zero deforestation policies adopted by many major palm oil companies have had only a limited effect in curbing deforestation, a study by the Environmental Investigation Agency (EIA) has found.

Using a combination of satellite imagery and trader questionnaires, the report - released yesterday - concluded deforestation rates in Papua and West Papua has halved since 2015 in comparison to business-as-usual projections.

However, eliminating deforestation altogether will require legal action alongside voluntary corporate efforts, the EIA said.

"These 'no deforestation, no peat, no exploitation' (NDPE) policies have reduced deforestation for oil palm in Papua but have not stopped it altogether, and the rate still remains high even though a significant number of palm oil growers have halted forest clearance in order to comply," said Siobhan Pearce, forests campaigner at the EIA.

Palm oil is present in a huge range of consumer goods, from processed foods to cleaning products and cosmetics. But consumer concern over its environmental impact is rising, thanks largely to pressure from environmental groups highlighting the industry's role in deforestation.

The two regions studied by the EIA are the most densely forested in Indonesia, acting as carbon sinks for the surrounding area. But around 31 million hectares of land, mostly forested, has been earmarked for palm oil plantations.

Overall, 56,000 hectares of forest in Papua has been cleared for palm oil plantations since 2015, the EIA pointed out, the highest of any region in Indonesia.

According to the research, the voluntary nature of corporate NDPE pledges means incentives for firms and their suppliers to abide by them are weak. "The tensions between maintaining revenues and voluntarily imposing NDPE results in opaque, ineffective monitoring and, ultimately, non-compliance," Pearce said.

The EIA, which is funded through a mix of grants and public donations, argues binding regulation from policymakers to require NDPE policies from all palm oil firms would dramatically ramp up forest protection.

Other industry actors are continuing to pursue stricter corporate governance of their voluntary pledges.

For example, last month one of the world's largest palm oil traders, Wilmar International, promised to start mapping and monitoring all its palm oil suppliers in a bid to "step up the effectiveness" of its NDPE policy. From the start of this year any suppliers involved in deforestation and new development on peatland will face "immediate suspension of sourcing", Wilmar said.