Sustainable palm oil production remains hazy

+ Official Coverage on Channel NewsAsia’s website

15 June 2014
Channel NewsAsia – Spotlight

Sustainable palm oil production remains hazy

Experts have commented that the annual fires in Sumatra and haze problem can be reduced through concerted efforts on the ground. All stakeholders can play a part in adopting sustainable sourcing practices. Leon Perera, Chief Executive Officer of Spire Research and Consulting, gave his two cents on how palm oil companies can take the necessary measures to avoid such haze problems.

As with previous years, there was much large-scale burning in many parts of Sumatra during this time of the year. With the winds during the Southwest Monsoon, smoke and unhealthy particulates from the burning vegetation would inevitably head towards Singapore and Malaysia. As such, many palm oil and pulp companies were facing increasing pressure to put an end to such traditional slash-and-burn practice – a method to clear land cheaply.

Hence, large companies should be responsible for educating and providing the farmers with alternatives to slash-and-burn methods. With some 40% of Indonesia’s palm oil produced by third-party crops or owners of small farms, there was a need for the large companies to find out if they were supplied with sustainably produced palm oil and other raw materials.

Meanwhile, many large palm oil companies were “pledging to produce palm oil sustainably – by not clearing forests of high conservation value, not developing on peat land, and adhering to a no-burn policy”. Perera shared that banks, pension funds, sovereign wealth funds and asset management funds can help to bolster such efforts.

He also observed that there was an escalating concern from investors, as they wanted to avoid any possible boycott, blacklisting or adverse regulatory decision from the palm oil companies that they had invested in. He added that Singapore’s proposed Transboundary Haze Pollution Bill was a sign that governments were “ready to take tougher action to enforce laws and take companies to task”.

For media enquiries, please contact:

Nidhi Singh
Senior Executive, Corporate Communications
Spire Research and Consulting
Phone: (91) 124 646 5499
E-mail: nidhi.singh@spireresearch.com

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