Olam, one of the world’s biggest traders of agricultural commodities, has agreed to a year-long moratorium on forest clearance in Gabon, marking a breakthrough for campaigners who have targeted the palm oil industry.
The suspension follows criticism last year from a US-based environmental group that Olam has bulldozed rainforest in Gabon, one of west Africa’s prime wildlife sanctuaries due to its dense jungles, to clear land for palm-oil plantations.
Olam’s decision comes as Asian palm oil businesses are shifting to west Africa in search of land to make up for shortages in the two main producer countries, Malaysia and Indonesia.
Palm oil is the most widely used vegetable oil in the world, turning up in everything from shaving cream to cookies.
But concerns about deforestation have made its production controversial, with the world’s largest consumer groups such as Nestlé and Unilever joining ethical investors and green campaigners in recent years to demand higher production standards.
“This will have a direct, positive impact on the large-scale intact forest which is home to chimpanzees, giraffes and forest elephants. Olam is going to stop clearing for at least a year in one of the world’s last great forests,” said Glenn Hurowitz, chief executive of Mighty, the US campaign group that turned a critical spotlight on Singapore-based Olam last year.
During the one-year ban, Olam will take part in talks with the campaign group to establish guidelines for agricultural development in heavily forested countries.
Olam’s decision highlights the conflicting views over the best way to narrow the economic gap between rich and poor in developing nations such as Gabon. The country has prospered from exporting crude oil but the gains have not been evenly shared.
Sunny Verghese, Olam’s chief executive, has argued that Gabon has a right to develop its agricultural sector in order to diversify its economy and create jobs. But environmental campaigners argue that preserving Gabon’s forests will allow for the creation of an eco-tourism industry.
“Rwanda has 600 gorillas and brings in $300m a year in eco-tourism. Gabon has 30,000 gorillas and does not have a significant tourism industry,” said Mr Hurowitz.
As part of the agreement, Olam said it would disclose further information about its third-party palm oil supply chains in Asia. Campaigners say it is vital for companies to publish the identities of their suppliers so their production standards can be independently monitored. Like other agricultural commodity groups, Olam is both a producer and trader of foodstuffs and relies heavily on third-party suppliers.
“Olam remains committed to best practices in forest conservation, sustainable agricultural development, poverty reduction and job creation,” Mr Verghese said in a statement announcing the moratorium.
Olam’s largest shareholders are Singapore’s Temasek Holdings and Japan’s Mitsubishi Corp.
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