The vegetable oil that fuels a $50 billion business

Story highlights

Palm oil is a high yield, versatile vegetable oil, linked to deforestation in Southeast Asia

Global production has doubled in the last decade and is now worth $50 billion a year

Indigenous groups say clearing land for palm oil production needs stricter regulation

CNN  — 

Before you set foot outside your home each day, you’ve more than likely washed and eaten with this ubiquitous oil.

As the most widely-used vegetable oil worldwide, palm oil is found in everything from soap and shampoo to cereal, bread and cosmetics. About half of all packaged products sold in supermarkets contain palm oil, according to the World Wildlife Fund.

Palm oil’s popularity has skyrocketed in recent years. It’s the most efficient source of vegetable oil, and its high yield makes it cheap to produce. It remains solid at room temperature, making it an incredibly versatile commodity. Demand has been increasing since the 1970s, making it a valuable and profitable business already worth $50 billion a year, and projected to rise to $88 billion by 2022.

The large scale production of palm oil, however, is linked to massive deforestation in Southeast Asia, leading to extensive carbon emissions and contributing to global warming.

Sustainable palm oil

The increase in palm oil plantations, particularly in Indonesia and Malaysia, has seen an onslaught of fires used to clear land at the expense of the tropical rainforest. In 2015, the cloud of smog from the fires was so intense in one Indonesian province that the government declared a state of emergency.

In addition to environmental consequences, entire communities have been displaced all over the world, according to a group of representatives from the Forest Peoples Programme, an NGO promoting forest peoples’ rights. The group have just toured Europe, hoping to sway EU officials and investors that they must boycott companies not adhering to sustainable palm oil production.

In 2004, the Roundtable on Sustainable Palm Oil (RSPO) was created after various groups raised concerns about environmental impacts in palm oil production. Today, the RSPO has set established international standards for palm oil production, including labeling of products adhering to sustainable parameters. Members include producers, environmental groups and manufacturers of goods containing the oil.

So what’s the problem in Africa?

Palm oil producers have turned their eyes to Africa as their next growth spot.

The plant is native to Liberia, Cameroon, Sierra Leone, Benin and Democratic Republic of the Congo, but Nigeria is by far Africa’s largest producer of palm oil, and fifth largest in the world in 2015. It already has 2.5 million hectares of land used for the production of the oil.

Liberia, where the palm is an indigenous crop and widely used for cooking, has few restrictions on land and a government keen to sign contracts, making it an ideal place for companies looking for growth according to Ali Kaba, the Liberian program coordinator for the Sustainable Development Institute.

 Ali  Kaba, from Liberia, is urging a boycott of firms that commit human rights violations and land seizures to cultivate palm oil.

“Palm oil is not the problem. The problem is human rights’ violations,” he said, speaking at a press conference in London in May. According to Kaba, the problem stems from the government signing over land to companies, displacing local people off the land they have always lived on and farmed.

“People are losing access to their farmland,” said Kaba. Food insecurity and pollution have gone up, and families have been massively displaced in their daily life. “A woman used to take 30 minutes to fetch water (for her family). Now, it takes 2 hours,” he explained, as villagers have lost their usual resources as a result of companies clearing land.

Liberia currently has 17,000 hectares planted with palm oil, and another 700,000 set aside for further production. While this is a small number in comparison to many countries, a handful of multinational companies have set up operations in the country.

It’s the lack of regulation of these companies that Kaba, and people in other African countries, are worried about. A great deal of land in many African countries is owned by the government, leaving people living on it with little or no rights to it once the large companies are involved.

Kaba and his fellow campaigners aren’t asking that palm oil be banned. But they are seeking to influence policy makers, particularly in the European Union, which together makes up one of the largest importers of palm oil, that regulations on land-grabbing by corporations must be in place.


A picture taken on April 28, 2016 shows the intense deforestation for land clearing in order to produce palm oil in Lofa county in northern Liberia.

London-based Equatorial Palm Oil (EPO), a company producing palm oil in Liberia, said in a report that “oil palm development is Liberia’s best chance to alleviate the chronic poverty of its rural population”.

EPO says it has prioritized community relations in Liberia from the start, including investment in infrastructure such as water pumps, roads and bridges, as well as building, maintaining and running schools and health clinics.

“Any project that involves land is always going to have trade-offs,” said Laurence Read, an independent consultant to EPO. If done responsibly, Read genuinely believes palm oil production will have a positive impact on Liberia.

Companies have been asked not to carry out further planting in disputed areas, according to the FPP, who recommends there needs to be much stricter and transparent rules for international funding and investment in the palm oil industry. Read argues that Liberian doesn’t even have a central land registry, making a legal framework for business “extraordinarily difficult.”

“There are ways to do it (produce palm oil) in a sustainable manner,” says Kaba, who argues that once locals don’t have access to the land they’ve always lived on, the impact can be disastrous. “If you don’t have land, you are pushed to the fringes of the forest, or forced to go to an urban center,” said Kaba.

“When you are pushed from your space, you become a stranger,” he said. “It’s a human rights issue. It’s an environmental issue. We have to respect human rights, and we have to respect the environment.”