addressing the leakage market K u a l a L u m p u r 5 t h M a r c - PowerPoint PPT Presentation

Stepping up No Deforestation and No Peat commitments in the palm oil sector by addressing the leakage market K u a l a L u m p u r – 5 t h M a r c h 2 0 1 9

Introduction • ~ 2010: First major campaigns against palm oil  First main push from consumer good companies for traceability and sustainability • End of 2013 onward: Commitment by refiners to No Deforestation, No Peat, No Exploitation (NDPE) policies with supplier group approach = accountability for a suppliers’ actions, regardless of product source • Results:  Important amount of avoided deforestation and growers adopting NDPE policies too – stranded land  Some were suspended due to violation of NDPE: what was the outcome? Did it lead them to stop deforestation/peat conversion? • Major step up of commitment is needed to achieve deforestation free supply chain by 2020

NDPE results (1) Grower which committed to NDPE policy after buyers’ intervention - in this concession alone some 13.000 ha of forest remain and will not be developped further

NDPE results (2) RSPO member, producer and refiner which did not wish to commit to NDPE and was excluded from supply chains. Peat and forest converson in different plantations of this company is still ongoing today. The company is now supplying the leakage market

Top 10 deforesters 2018 Top 10 Deforestation Group Level in 2018 Austindo Nusantara Jaya SSMS Associate Tunas Baru Lampung Tbk Mulia Sawit Agro Group LEAKAGE Prosper BLD Cilliandry Anky Abadi Pacific Inter-Link Jhonlin Sulaidy - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Forest Peat Peat Forest

What is the leakage market? • 3 types: 1. Companies with NDPE (RSPO member ot not) which have published their list of suppliers and are not implementing their supply chain commitments at group level* 2. Companies with NDPE that have not published their list of suppliers 3. Companies (including RSPO members) which have not adopted NDPE policies at all *Group concept

How are manufacturers and CGC related to the leakage market? Do you buy from suppliers of type 1, 2 or 3? If so you might be at risk to be involved in the leakage market Type 1 Type 2 Type 3

Are manufacturers and CGC too far down the supply chain to achieve direct change? NDPE NDPE NDPE NDPE NDPE compliant compliant compliant compliant compliant First filter grower Second filter Last filter mill Non-NDPE compliant grower Non- compliant Manufacturing/ Retailing Production Processing CGC

What can you do? Be transparent, and publish your list of suppliers  RSPO Resolution 6b/2018 1. + Upcoming NGOs campaigns Know your suppliers  Go beyond product traceability; “ traders and traders’ 2. traders ” Be proactive , do not wait until a NGO launches a campaign against you. Focus 3. on the leakage market players (tier 1 suppliers) and engage non-compliant suppliers Share your knowledge (producer country governments may not always get a 4. realistic perspective on markets; also: brands usually have stronger labour standards for example)

Thank you! For further information: eric@aidenvironment.asia