August 28, 2015

Malaysia Palm Oil Producer Sets Sustainable Example

The palm oil industry is responsible for tremendous amounts of deforestation, air pollution, soil erosion and human trafficking. It’s a highly controversial subject, and the trade is heavily reproached for its environmental offenses – but one Malaysian producer is setting an example for sustainable palm oil that breaks the mould.

“Right now 95% of our products that come from the plantations are sustainable,” said Khairudin Hashim in interview with BBC.

Mr. Khairudin is the head of sustainability for Sime Darby, arguably the most sustainable palm oil producer in the world.

Sime Darby is certified through the Roundtable on Sustainable Palm Oil (RSPO), a collective encouraging sustainable palm oil production. In order to earn an RSPO certification, a palm oil producer must conform to strict regulations ensuring transparency, environmental responsibility, good employee welfare, care taken to safeguard the health of communities surrounding business operations, and a promise to continue improving upon sustainable practices for as long as the business is certified. The standards of RSPO are high – higher than sustainability standards for most industries – and they are revised and re-written every five years.

Most of the world’s palm oil producers are extremely unsustainable. The business is usually extremely destructive. In the Malaysian state of Sarawak, only 5% of original forests remain, and 30% of the forests on Borneo – the island Sarawak sits on – have disappeared entirely. This is almost entirely due to palm oil plantations.

Sime Darby, on the other hand, is doing what it can to operate sustainably. It can cost a palm oil producer $15 per metric ton of palm oil to certify it through RSPO – which adds up. The organization also produced its first standalone sustainability report last year – a 69-page document outlining responsible practice across all three pillars of sustainability: environmental, social and economical.

The struggles of the palm oil industry are far from being resolved, but Sime Darby is making a tremendous push in the direction of sustainability for this in-demand but controversial industry.

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