Earthqualizer Foundation encourages companies in the palm oil supply chain to make supply chains more transparent, to enforce compliance with No Deforestation, No Peat, No Exploitation (NDPE) policies, and to resolve past non-compliance. This report was written to inform the Forest Positive Coalition of the Consumers Goods Forum (CGF) and other downstream supply chain actors regarding the nature and scale of the palm oil industry’s past non-compliance with NDPE policy, and what should be done to compensate for past environmental harm.

NDPE purchasing policies have significantly contributed to reduced deforestation for oil palm plantations in recent years. Supplier monitoring has become common practice, and sanctions for non-compliance are regularly enforced. An increasing number of companies are committed to making their supply chains completely deforestation- free and/or carbon neutral. Others have committed to finance a variety of conservation and landscape projects in palm oil producer countries. This is progress that deserves appreciation. Nonetheless, any buyer aiming to claim a deforestation-free supply chain in the future still needs to ensure that its past purchasing behavior did not contribute to deforestation. And when it did, the buyer needs to help compensate for such past harm. Hence, the title of this report.

Earthqualizer Foundation assessed the total area of forest and peatland cleared and planted by oil palm companies after 31st December 2015, the most widely accepted cut-off date. In our assessment, peatland development is weighted twice to reflect its extra greenhouse gas (GHG) emissions load. We found that the oil palm industry accrued a total Weighted Recovery Liability of 877,314 hectares between 2016 and 2021. GHG emissions associated with the total Unweighted Recovery Liability is 279 million tCO2e. This liability was primarily created in Malaysia and Indonesia (resp. 29% and 68% of total), and to lesser extent in Papua New Guinea (3%). The liability was accrued by 300 different supplier corporate groups involved in oil palm plantations. Among them, the top 25 supplier corporate groups account for 45% of all liability.

Among the suppliers with liability, there are those who have already acknowledged and confirmed the past harm caused by their non-compliant land development. They have committed to adhere to the so-called Re-Entry Requirements for suspended suppliers, which includes a commitment to develop and implement a Recovery Plan. The first Recovery Plans covering a target area of approximately 50,000 hectares have been made public by a handful of plantation companies in Indonesia and Malaysia  (this  target  area  represents ~6% of total Weighted Liability). These suppliers deserve re-entry to the NDPE supply chain. Other suppliers that have accrued Recovery Liability have yet to confirm this, comply with the Re-Entry Requirements and develop Recovery Plans.

Action is required because palm oil from non-compliant plantings has already entered the global supply chain where it will generate unearned profit in years to come. Earthqualizer Foundation is of the opinion that such proceeds should be reinvested back into the recovery of environmental and social functions in oil palm dominated landscapes. Several major global brands in the palm oil industry subscribe to this view. The CGF Forest Positive Coalition is suggested to enforce the Recovery Concept in full.

Download full report https://rb.gy/uolwvf