Palm Oil Supply Chain 

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The majority of palm oil produced in Indonesia and Malaysia is exported across the world—to India, China, the European Union, Egypt, the United States and other countries.

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Some palm oil in these countries is produced within a processing system owned by a single company, such as New Britain Palm Oil Limited operating in the South Pacific. These supply chains are more easily managed for quality and consistency. Other palm oil is produced in supply chains that are more complex—involving multiple changes of corporate ownership as the palm oil passes from growers to mills, refiners, traders, chemical processors, manufacturers, and finally, to brand-name products sitting on our store shelves.



 

Tracing Palm Oil Through Supply Chains

 

Definitively confirming that a given product contains palm oil from a specific, single plantation is impossible unless the palm oil is certified at every step along the supply chain. This type of certification is called "Identity Preserved" (described in more detail below). Palm oil certified under systems other than Identity Preserved cannot be traced because stocks of various palm oil from various growers are mixed together along the processing pathway.

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The vast majority (90%) of palm oil is non-certified and not traceable along the entire supply chain. In non-certified palm oil production, the oil crushed from one palm fruit passes through many production steps and is mixed with palm oil from multiple other plantations without any required documentation from a certifying body, which makes tracing a batch of non-certified palm oil back to one plantation estate impossible. (See "The Palm Oil Industry in Malaysia: From Seed to Frying Pan" by World Wildlife Fund for a thorough explanation of how palm oil is processed into the various ingredients we find in food and nonfood items.)

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Is Forced Labor or Child Labor Hidden 
 in Our Favorite Brands?

 

It is still possible to link palm oil producers to food and chemical manufactures in the United States, however. After identifying plantations in Indonesia where labor abuses occurred, the Schuster Institute used the Import Genius shipping records database to trace palm oil harvested by workers at those plantations to refineries in Malaysia and then to some of the most prominent corporations in the United States.



For example, the Schuster Institute found that Kuala Lumpur Kepong Berhad (KLK), the company buying and refining the palm oil harvested on PT 198 plantation in Berau where workers told Schuster Institute investigative reporter E. Benjamin Skinner they were held against their will and sometimes forced into debt bondage, has sold palm oil or its derivatives to major manufacturing companies such as the agribusiness company Cargill, the chemical manufacturing giant BASF, and the multi-national personal care corporation Procter & Gamble. These companies then either further refine and sell that palm oil to end-use manufacturers or directly use the palm oil as an ingredient in a recognizable product on supermarket shelves. 

 

• Read "Indonesia's Palm Oil Industry Rife With Human-Rights Abuses," E. Benjamin Skinner, July 18, 2013, Bloomberg Businessweek.

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Procter & Gamble’s Crest toothpaste, Oil of Olay Beauty Fluid, and Gillette Foamy Shaving Cream all include ingredients—sodium lauryl sulfate, glycerin, stearic acid, and cetyl palmitate—that can be derived from palm oil. Because Procter & Gamble (P&G) buys palm oil derivatives from KLK, it is theoretically possible that the palm fruit in these and other Proctor & Gamble products was sprayed with herbicides and harvested by forced labor or child labor on the PT 198 plantation. P&G, a member of the Roundtable on Sustainable Palm Oil, has committed to using 100% sustainable palm oil by 2015 according to its time-bound plans submitted to the RSPO in 2012. P&G says four percent of its total consumption is now from sustainable sources. As a grower, KLK has also committed to 100% CSPO by 2015 and reports 41% of its current production is RSPO-certified.

 

The graphic below illustrates key players in the palm oil supply chain featured in Bloomberg Businessweek's "Indonesia's Palm Oil Industry Rife With Human-Rights Abuses." It begins with the recruiting agent who, under false pretenses, contracted and transported workers to a palm oil plantation, to the multinational companies who purchased the palm oil or derivatives, and then from the palm oil processing companies that then used the palm oil or derivatives in popular brand name products sold around the world.

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From Palm Oil Plantations to End-Use Products

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How does a single palm fruit turn into an ingredient in your toothpaste? The palm oil supply chain can involve many steps: from plantation to mill, then to refinery for further chemical processing and manufacturing, and finally to the products we use every day.