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Cargill’s Problem With Palm Oil

Report by Rainforest Action Network: Cargill’s Problem With Palm Oil

The report can be downloaded from
(Note: The file takes some time to download)

Executive Summary

U.S. agribusiness giant Cargill plays a leading role in the global
palm oil market. The largest importer of palm oil into the U.S.,
Cargill has a two-part business model in the palm oil industry: it
both owns and operates palm oil plantations in Indonesia and it
purchases and trades palm oil and its derivatives worldwide.

This report presents evidence that Cargill is operating two
undisclosed palm oil plantations in West Kalimantan, Indonesia.
Operations at these plantations are actively burning and clearing
rainforests, causing conflict with local communities, destroying
peatlands and operating in violation of the Roundtable on Sustainable
Palm Oil’s (RSPO) Principles and Criteria and outside of Indonesian
law. It also finds that Cargill has failed to adopt and implement
systematic safeguards in its production, purchasing and trading of
palm oil from other suppliers.

Cargill’s palm oil commitments

Cargill became a member of the RSPO, a voluntary standard for palm oil
production, in 2004. As a certified member of the RSPO, Cargill is
publicly asserting that the palm oil it produces and trades adheres to
industry best practices and RSPO Principles and Criteria. 2
Investigation of the reality on the ground, however, reveals a wide
gulf between Cargill’s palm oil operations and its stated commitments
and responsibilities under the RSPO.

RSPO Violations

This investigation presents evidence that Cargill is violating at
least five RSPO criteria:

Operating outside of Indonesian law;
failing to disclose ownership of palm oil plantations;
clearing rainforests without permits;
failing to resolve ongoing and large-scale land conflicts;
and »
destroying watersheds.

Indonesian Law Violations

This investigation presents evidence that Cargill is violating at
least five RSPO criteria:

Operating without an Environmental Assessment Report or Business Permits;
clearing rainforest without Timber Cutting Permits;
exceeding the maximum allowed concession area;
clearing peatlands; and
using fire/burning in palm oil concessions.
Systemic failures in Cargill’s supply chain
This report also finds that Cargill is not exercising necessary
oversight of its own supply chain to ensure that it is clear from
controversy. Cargill is regularly purchasing from and trading with at
least two controversial palm oil suppliers, SALCRA and Sinar Mas
Group, that are actively destroying rainforests, violating human
rights and operating outside of industry best practices and/or
national laws.

Recommendations and Conclusions

Bold action by Cargill, the most influential palm oil producer and
trader in the U.S., to reduce the negative impacts of its palm oil
operations could establish an important precedent for agribusiness
throughout the world.

Based on the findings of our investigation, RAN recommends that:
Cargill adopt and implement a comprehensive palm oil policy that
includes commitments to ensure socially and environmentally
responsible palm oil production on their plantations and supplier
plantations in line with RSPO Principles and Criteria and Indonesian

Cargill support a moratorium on natural forest conversion and peat
land draining throughout their supply chain.

The RSPO immediately investigate Cargill’s violations under the RSPO
P&C and take appropriate disciplinary action.

The RSPO immediately investigate and take action on existing
complaints against problematic companies such as SALCRA and Sinar Mas,
and implement an immediate moratorium on peatland conversion.

Cargill customers, such as General Mills, investigate their own supply
chains, and cancel contracts with problematic suppliers, including
Cargill and Sinar Mas Group.

The Indonesian government should investigate the legality of Cargill’s
CTP Holdings plantations in West Kalimantan and take appropriate
action based on their findings.

05/19/2010 – 10:53


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