Sustainable Palm Oil? Who Knows, Thanks to Derelict Auditors

A new report finds the auditors responsible for ensuring palm oil plantations are protecting forests, wildlife, and workers aren’t doing their jobs.
A 13-year-old Indonesian girl works at a palm oil plantation in Pelalawan, Riau province, Sumatra. (Photo: Adek Berry/Getty Images)
Nov 18, 2015· 2 MIN READ
David Kirby has been a professional journalist for 25 years. His third book, Death at Seaworld, was published in 2012.

Was the palm oil in your cookies, fast food, or shampoo produced sustainably, without destroying tropical forests or exploiting human-trafficked workers? Unfortunately, it might be impossible to know for sure, according to a new report from the Environmental Investigative Agency.

The report, Who Watches the Watchmen?, alleges malfeasance and incompetence by the Roundtable on Sustainable Palm Oil, an international consortium created in 2004 to audit and certify palm-oil companies to ensure sustainable production of the product, which is used in about half of all packaged items sold in supermarkets.

“The harm inflicted on people and the environment by the oil palm industry is a global scandal,” the report states.

RSPO’s auditing system is “critically flawed,” the EIA report claims. “Auditing firms are fundamentally failing to identify and mitigate unsustainable practices by oil palm firms. Not only are they conducting woefully substandard assessments, but the evidence indicates that in some cases they are colluding with plantation companies to disguise violations.”

According to the report, the RSPO auditors’ failures are allowing forest destruction, biodiversity loss, entrenched social conflicts, human trafficking, and death threats against environmental defenders to persist.

RELATED: Is Eating Palm Oil Ruining the Planet?

“Without scrutiny and appropriate action, this will be branded as sustainable,” the report added.

Several conservation groups and communities where palm oil is produced are supposed to provide oversight of RSPO auditors, but over the years, there has been “a stream of complaints against RSPO members which clearly implicate auditors in carrying out dodgy assessments and deliberately attempting to misrepresent the facts on the ground,” the report alleges.

On Wednesday, RSPO responded to the report.

“RSPO reaffirms its commitment to transparency and open dialogue with all stakeholders willing to address the sustainability challenges of palm oil production,” the group wrote in a statement on its website. “It takes very seriously the claims contained in the EIA report, and welcomes it as an opportunity for intensifying this dialogue, and further improve its certification system.”

RSPO said it is now working with a third-party oversight body, Accreditation Service International, to review the case studies analyzed in the EIA report. Of the nine case studies in the report, two relate to a certification body that was terminated in 2014, it said.

“All other cases have already been logged and will be accounted for in ASI’s 2016 assessment planning,” RSPO said.

In a separate statement, RSPO announced that it had suspended or terminated 35 member companies and organizations for not submitting “annual communications of progress.”

To make room for their crop, many palm-oil growers clear large swaths of tropical rainforest—often by burning it—destroying biodiverse habitats of endangered species such as orangutans, tigers, elephants, and rhinos. At some locations, trafficked laborers are forced to work without pay, often for several months, according to the report.

The problem is most acute in Southeast Asia, where some 90 percent of all palm oil is grown, mostly in Malaysia and Indonesia. In recent years, palm oil plantations have also expanded in West Africa and Latin America.

No U.S. companies produce palm oil, but many buy large amounts of the product, including McDonald’s, Wendy’s, Domino’s Pizza, and Estée Lauder—all members of the RSPO.

“There are two issues,” said EIA forest campaigner Tomasz Johnson in an email from Kuala Lumpur, where RSPO is holding its annual Roundtable Conference on Sustainable Palm Oil. “One is companies not complying with the standard, by failing to conserve HCV [high conservation value] forests and respecting customary rights. The second issue is that the auditors who should be identifying, mitigating, and screening out these problems are not doing so.”

While there is no evidence of bribery within the system, cozy relations between companies and auditors produces compromised audits, Johnson said, adding that about one-quarter of RSPO-certified auditors were implicated in approving or covering up substandard assessments.

EIA will make several recommendations at the RSPO meeting on Nov. 19 in Malaysia, the report said, including mandatory guidelines on the minimum acceptable quality of audits and a “transparent and robust” monitoring system. The group will also ask for a “zero-tolerance approach to fraudulent reports.”

Until those reforms are implemented, EIA said, companies that buy palm oil “must exercise due diligence to determine the source of their palm oil—or risk the many products on supermarket shelves being tainted with human trafficking, human rights abuses, and species extinction.”