While deforestation for oil palm expansion in Malaysia and Indonesia is in decline, it is about to escalate in Papua New Guinea (PNG). 14 newcomers in the oil palm industry will make or break the country’s good reputation for producing sustainable palm oil. Earthqualizer Foundation case report calls out palm oil trader-refiners and brands with NDPE policies to engage the PNG government and newcomer oil palm growers.

Update on oil palm expansion in Papua New Guinea

Ten years of NDPE policy successes are set to be undone

May 24, 2023

To begin with the good news: the PNG government recognizes that it has a problem on its hands, again. In February 2023, a one-year moratorium was declared on the issuance of new forest clearance permits that are widely (mis)used by companies to gain access to customary rights land and forests therein.

The moratorium offers breathing space for all stakeholders. It is an opportunity for buyers to convey that only NDPE-compliant palm oil policy is welcome on the international market. PNG growers and the government must understand that oil palm grown at the expense of forests, peatlands, indigenous landowners and workers will be shunned – resulting in sub-optimal prices and additional costs for import duties.

PNG is a minor palm oil producer globally but a significant supplier to the European Union. Most palm oil produced in PNG is already fully RSPO-certified and NDPE policy compliant. In addition, the Free Trade Agreement affords growers to implement sustainability policies.

This means, PNG is still well-positioned to become a more prominent global supplier of sustainable palm oil. However, recent findings from Inovasi Digital’s monitoring technology have alerted us that its current trajectory in accepting new project entrants is equally well-positioned to ruin this opportunity. Palm oil produced in forests cleared after 2020 will not be exportable to the European Union in due time, thereby rendering a beneficial trade agreement useless.

New entrants revealed

The case report by Inovasi Digital presents 14 new entrants to the PNG oil palm grower community. 10 of which have ties to Malaysian and Singaporean individuals, and companies. The Ultimate Beneficial Owners behind these companies are often concealed; this even includes companies that publicly claim to pursue RSPO membership and full certification. Yet, several projects identified do have the potential to comply with NDPE policy. 

What stakeholders can do

B2B engagement should focus on the following steps: reveal projects’ ownerships, commission and comply with conservation studies, reaffirm communities’ Free, Prior and Informed Consent (FPIC), settle past environmental harm through Recovery Plans, extension of technical support to plantations run by local landowner companies and finally transparent dialogue with civil society. Such efforts have previously created the two de facto current crown holders of PNG’s sustainable palm oil production today. The newcomer growers can replicate their experiences, and even do better.

It is important to engage growers – even those with a bad rep - because PNG will continue efforts to strengthen its position in international rankings of significant palm oil producers. The country even has a Minister dedicated to the crop. And this is why B2G engagement is required too. If the PNG government is withheld information about the realities in the market place of the future, it will likely repeat mistakes of the past. Again, the PNG declaration of a moratorium on problematic land clearance permits offers an opportunity that cannot be missed.

Earthqualizer encourages its partners to actively engage current and potential suppliers, take the necessary steps and demonstrate their support for sustainable PNG palm oil before December 5, 2023 – the 10th anniversary of NDPE policies.

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