Without India, you can forget about achieving a sustainable palm oil sector
In a food stall on a dusty New Delhi street corner, a woman in a bright orange sari drops samosas into a skillet of bubbling liquid, which crackles and pops as it laps up the potato­-filled dough.
She is cooking with palm oil, the ingredient often met with controversy in the west due to concerns about deforestation and habitat loss. In India, however, the world’s top importer of palm oil, its sustainability goes largely unquestioned.
India’s 1.2 billion citizens consume approximately 15% of the global supply of palm oil. The vast majority of the commodity (95% according to WWF figures) is used as edible oil, with the remainder added to haircare and beauty products. The country imports nearly all of its palm oil, more than two-­thirds of which is sourced from Indonesia.
“We know that our primary customers are not concerned about deforestation.”
Prabianto Mukti Wibowo
Minimal consumer pressure
At the annual World Bank conference on land and poverty held in Washington in March, Prabianto Mukti Wibowo, assistant deputy minister for forestry in Indonesia’s economic affairs ministry said: “We know that our primary customers are not concerned about deforestation.”
Unlike the boycotts and consumer awareness in Europe and the US, interest in sustainably sourced palm oil in India is minimal, putting little pressure on the domestic market to shift to more sustainable sources.
“There is no real ‘burning platform’ for companies to decide to move towards certification, especially for products aimed at the internal market,” says Stefano Savi, global outreach and engagement director at the Roundtable on Sustainable Palm Oil (RSPO).
Nandikesh Sivalingam, a senior campaigner at Greenpeace India, believes there is scope for change: “Indian companies have the power to pressure their Indonesian suppliers towards sustainability,” he says, adding that the consumer outcry in the EU and US over palm oil-related deforestation was an important driver in bringing about global sustainability commitments.
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Such pressure is unlikely to come from the average Indian consumer anytime soon, however. Sivalingam believes citizens are more familiar with issues of national concern, such as coal mining and harmful agricultural practices. “I think it’s only the most elite circles of people who are aware of issues related to palm oil,” he says.
India must step up
“As the largest importer of palm oil, India can play a fundamental role in influencing a shift towards sustainable production,” says Savi.
Yet to date the Indian market has undergone little change, in large part due to cost. Certified sustainable palm oil comes at a higher pricedue, in part, to low demand in the present market. As well as higher production costs in producer countries, transporting and processing low quantities of palm oil adds to the overall costs. In a country where over 21% of the population lives below the poverty line, a slight price increase has the ability to make a big difference.
“Can you tell the Indian vegetable oil consumer who’s buying only in the cheap shops that it’s bad for the environment in south-east Asia?” asks MS Sriganesh, head of sourcing at Galaxy Surfactants Ltd, one of the first Indian refineries to be RSPO certified. “They won’t know what that means.”
The government, likewise, has little incentive to absorb the surplus cost, which would quickly add up. It is predicted India could import 8.4m tonnes of palm oil this year.
The future
However, change is apparently on the horizon. “Certain companies have made commitments to sustainable palm oil, in particular fast-moving consumer goods multinationals,” says Philip Tapsall, director of sustainable business at WWF India. “We are starting to see these commitments extend to the Indian market.”
Savi is in agreement: “Global procurement policies from multinational companies demanding certified sustainable products are definitely having an impact in driving change locally.”
Tapsall cites Hindustan Unilever as one of the primary drivers of sustainability policies to Indian suppliers. The company’s Sustainable Living Plan includes a goal for all palm oil to come from traceable, sustainably certified sources by 2020.
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Galaxy Surfactants Ltd, which supplies Hindustan Unilever, was one of the first to offer mass-balance certified sustainable palm oil under the RSPO. The latter lauded the move as a significant milestone, similar to those achieved by companies in other overseas markets. The mass balance method allows certified sustainable palm oil to be mixed with equal parts non-certified palm oil.
While not yet reaching the ideal of supplying 100% segregated certified sustainable palm oil, something Unilever is aiming for, this is a step up from RSPO-supported GreenPalm certificates: pieces of paper that can be bought by anyone, rather than physical oil, which previously dominated India’s sustainable palm oil market.
Some see mass balance certification as a significant move in the right direction. Others, including Sivalingam, maintain “halfway” sustainability solutions such as GreenPalm, mass balance and other mixed sources are “just not good enough.”
“We hope the next step will be a big increase in physical volumes of sustainable palm oil,” says Tapsall. The target, he hopes, will be cooking oil. “This is where the bulk of India’s palm oil volumes sit and where impacts are greatest and commitments to sustainability have been fewer.”
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This article was co-produced with Guardian Sustainable Business under the Mongabay Reporting Network.