the following is a CNN a
podcast. I'm
Jamie Hello and thanks for listening to climate conversations today. We're talking about an edible vegetable oil that comes from the fruit of a palm oil tree. Palm oil. It's so versatile that is found in close to 50% of packaged foods found in
supermarket, everything
from chips to ice cream, soap to shampoo contains some form of power oil and precisely because it is such an efficient, versatile crop. Swathes of land have been cleared to make way for plantations leading to deforestation on a massive scale, particularly in Indonesia Malaysia, which account for over 80% of global supply, like all sectors, this one needs to confront the growing pressures to become sustainable. But can it,
what would it look like? Especially when millions of farmers earn a living from palm oil production with me today is Olivia T sheet, he's the director of Sustainable supply chain and muslim Mas, the global palm oil company based in Singapore. Olivier is active in the roundtable on sustainable palm oil and the high carbon stock approach and Palm oil Innovation Group Olivier. Welcome.
Thank you very much jane. Good to be on this podcast.
Thanks let me get into the first question just to set the stage for us, not many of us know just how important the palm oil industry is and the range of products we can find palm oil in. Perhaps. Therefore you can start us off by giving us a sense of exactly what we're dealing with the demand for this product and more importantly, you know, the historical impact that it has had on the environment over all these years since it became such an important product in global commerce.
Well, that would take a good, our our good more than half an hour to say what products, that's the beauty of it is found in everything. For example, if you use a hand sanitizer these days, maybe a lot. It is the glittering as well. You will find it in shampoos, in toothpaste. Uh you'll find it in many, many, many things. You might find it a lot of course in your food. Tom is an extremely versatile product oil. The red oil and the white oil. There's toils in relative how important
is it today? Today? It's important not only because of the share it has taken in the vegetable oil production in the world and in the traded vegetable oil, but also because looking forward with an increasing world population will need no vegetable oil. And paul is quite uniquely suited to do that to correspond to that increased demand. Why? Because it's got an incredible heel protector, it's unbeatable and the next best vegetable
oil is 10 times less productive protector. That's the difficulty with part if you want pam has to say, we want to have less deforestation when we need no power. So it will be difficult for some people to understand. I suspect what has been the impact. Look, there's two impacts. So the environmental impact, some deforestation will have been caused by power. That's a fact. We can't go around that a lot of deforestation has been caused by logging in particular.
What happens after living is a different story. It's not because an area of forest was lost and that a couple of years later you find harmony that palm cause the deforestation part might have been a secondary effect. That's one, there's another impact we shouldn't forget, it's the social impact of talent and so they are
some bad stories about town. But let's look elsewhere, the millions of snow holders in Indonesia and Malaysia and Thailand to just keep the region and also be the Philippines who are making a very good living because of town and that's the balance of power. There has been some problems with, found there might be some problems with pound, but there's also a massive positive social impact of power and it has to continue improving in reality. And that's something I'm so I'm sure we'll talk about.
Yeah, definitely. We'll talk about the small scale holders and things like that. But the reality then is however, the entire industry, Palm Oil does have a particularly bad reputation if I may say so in terms of its record on deforestation on sustainability? I suspect obviously the industry wants to make a change.
But do you think there's been enough recognition of the not so good effects that it has had in the explosion of demand and in meeting this demand globally, that, you know, some of the practices may have been bad practices may have been established already
Now, industry is a big industry. So you have, you have a variety of players on the one hand, you have one section of the industry and today it's about 20% of the world production which is certified. And there are global voluntary standard called the R. S. P. O. The Roundtable for sustainable palm oil. That's not an industry standard because it's a multi stakeholder
stand out. So it's developed with the GeoS, it's developed with industry down street, the likes of Nestle, Unilever, Procter and Gamble over people use brands, you know, And also of course there is the plantation companies spread the demanding stand out. If you look today, it's a tough stand out. It's no deforestation. No expectations stand out quite clearly. It's uh, it's a voluntary stand up, about 20% of the world production now on the recognition of impact I think. Yeah, the
priorities have shifted now. Industry is big enough that not everybody is at the same speed. But if you ask the main actors are the ones who are the most involved on most in touch with market, I would say you will find that the priority nowadays is no longer to expansion. So there will be a bit more expansion. That's that's positive.
All the property. Nowadays. It's more about no deforestation. That's the priority because the industry realizes that it's accused sometimes rightfully, possibly historically, less and less correctly nowadays, because if you look at deforestation rates, they have plummeted at least in Indonesia and the industry than cannot be said to be continuing to difference the massive scale, but it's about also yield increases. How do we make even more with
the land that we have now in the parliament? And if you look at what scientists are saying on an idea of breathing friends, so the breeders tell you the full potential of part has not been met so we can have even more oil per Hector with the areas already planted. And that's our challenge. Our challenge is not only on the big plantations, but also on the small farms. How do we further increases? Because we can, that's where the industry is going up.
You raise many, many interesting points that we'll get to that, but maybe I'll start now on the last point that
you raise about the small scale holders, right? Obviously, as you say, many of the big, major conglomerates are responsible within the entire industry, but it's said that some 40% of the world's Pamela, there's still produced by smaller scale farmers Explain to us therefore what's being done to help this 40% along the chain so that they do get into more sustainable production and what's the impetus for them to do so?
And how does the overall industry help them along? And is it realistic to expect this to move sooner than everybody wants to actually, or needs
to uh well, you you've put it very well there when you say, where's the impetus? What's the need for them? And that's, that's the question we always have to answer if we want to move the smallholders, smallholders, their farmers. So if you tell them guys, you could make a bigger yield out of your blocks, they're interested and they're smart, They're farmers. So they know that maybe the planting material that they have the seeds that they planted, we're not that much.
So they want better seats bomb is a burial crop. The cycle is 25 years. So it's a long term crop, even from the first smolder in particular, it's a long term crop. So it's difficult to move quickly once you've planted when you married for 25 years with your pants. So you can't just cut them and replant with a new variety. So it's, it's a bit long to get change and that's a bit frustrating. Including for this. Nonetheless,
that's enough has been done for smaller. So companies like us, that's like maximus, okay, we're very much into
supporting
smaller. Why, like I said earlier, if we want our business to continue to thrive and even to increase, we need no production and it cannot come from different station. So it will have to come from the intensification. So from the smaller, smaller, you need the state to enable. So you need very good support from the state.
So the government has to be very close to the smaller so that they have the right titles so that they know that they can get land titles so they can pledge those titles or use those titles and land. There's a better value for them. But also the industry, we have to support the smolders. We have to work with the local governments because on the landscape you might have pump smolders, rather smolders, coco smolders, it's not by only working with the palm small learns that will have maximum impact.
It's quite complicated that we need to go back to real basic work which is rural extension work. So how do you have agricultural of itself in the field who can give the right advice to the smaller is because like you said, what's in it for them? They have to sell value to change. So that change becomes something that they want also to adopt.
So in terms of things like land clearance, then right you say that the intention is to stop all the deforestation. Do you think you are comfortable enough and governments are comfortable enough to say that enough has been said and education will continue to educate the smallholders, especially on land clearance techniques with the overall goals are not having any more deforestation
there. It takes more than one to to achieve that like you said, government has a role to play government at the end of the day these the and foster law will be enforced by governments. It should not be delegated to the private sector to do so. The government has to play its role there.
The instant TVs you can get land titles. The land titles have a value for the banking system, has to recognize the land titles or smaller have access to some capital, but the government has to be the enforcer on the industry. What can we do? We can make it very clear that we have the tools today to monitor deforestation. Satellite imagery is readily available.
It's very quick. You can get it very, very fast as long as the cloud cover is nothing saying of course, but we can get images very fast so we can monitor the deforestation quite easily so we can make it known in our supply chains that deforestation is not allowed. We don't want fruit from deforested areas and we can monitor of that. The government being the enabler and the enforcer, the industry having to send a very
clear message. Oil from deforested areas from areas which have been cleared and planted because of deforestation will not enter our supply chains. So it will have a lesser value. It will have a small smaller market that will get any smaller over time so there is no incentive to deforest and plant reaching the smaller it is the tough part they are smaller is by definition it's not the cooperation that submits a license to plant, They make their decisions based on their needs.
They need to have an income. Palm is a good income for smaller because it's a regular income and then the prices can be very good and they see their neighbors who are quite successful. There's a lot of outreach to be done as the private sector through the commercial out the government, through enforcement and giving value to smaller who are compliant.
Let me talk about now this concept of sustainable palm oil production, your role and muscle mass is about sustainability but dividend a little bit more into the details about what sustainable palm oil production looks like. Not just I suppose within plantations, but I would presume all of us will want to look at it throughout the entire supply chain from the farm to the table or to your hand sanitizer. As you say, what does it look like? And what can the customer
consumer do? Do you know, do you think that they know enough about what sustainable palm oil looks like and what it entails and ultimately also in the longer run. It's also a matter about cost as well, isn't it?
The consumer is, is a tough choice, their their stuff and stuff saying because the consumer, the only way the consumer will see palm oil alone, let's say will be included in all the rest of the time time will be one of many ingredients like maybe a small ingredient might just be the foaming agent in your shampoo. It may be only the glycerin, like we said in your hand sanitizer. The consumer can do a couple of things. The consumers,
they can look out there. There's a lot of information about town that is something we do not realize enough, but there's been so much scrutiny of that time that there is a lot of information, not only is good, some of the bad news is unfortunately true, but there's also a lot of good news and there's a lot of ways to learn about power and to make them an educated choice and to decide to support sustainable power. There is also a certification standouts, the roundtable for sustainable palm oil,
which is that voluntary standards. Some products have the labor on them. I really encourage everybody to choose those and to give them maybe a bit of preference. I mean artists, if you want to make a very educated choice, that that's one that you can do. It's not an obligation because like you said, it carries a bit of a premium at the end of the day. I think for the consumer, the difference in cost is not massive. So it's more about trying to figure out what's in
your products. If you look in the products, you might be able to know a lot more about the town products than any other products. You might also wonder that whether the rest come from when I talk to european european friends and usually I tell them, look, look at the frozen kids are, and in your frozen pizza, you will know a lot about the palm oil. But when you know that the tomatoes, what do you know about the wheat, what do you
know that the meat that's been used as well? I think the consumer actually can know a lot about a pound today,
we'll take a quick break and be right
back. Climate
conversations podcast is supported by savannah, jerome building cities shaping lives Now, I'm going to jump in on the roundtables work right. The roundtable on sustainable palm oil. It was founded in 2004 with the goal of promoting sustainable palm oil extraction. Now, about 1920% of global palm oil production is certified sustainable, it sounds low is 20%. What would it take to get it to 50%? And do you think there will
come a time where it's 100%. And where does the impetus come for everyone to get on board and for the industry to move from 20% to 50% and ideally to 75 and 100%,,
19, doesn't look like a lot. It's a lot. It's huge. I mean, if you look at products and in particular products like pound, which is a big production, 70 million talents and it's a huge amount of fun around their 20%. It's a lot. It's only quite a success. It's gone through two phases. Now we're trying to go to the third phase of the RSP or what I call the self phase of the R. S. P. O. Yes, it's not easy the further increments of the difficult ones,
it's tough because the standard itself is really tough. So for producers it's difficult downstream I think in the consumer goods it's also tough, maybe less difficult I would say to adopt but to be tough to find the product you want because the cookies manufacturers, let's say they do not want palm oil, they want one part of palm oil and they want that part certified and a lot of them want the same thing. It creates a bit of a supply and demand imbalance
for certain fractions of the plant products. What does it take people to 50%. It will take a bit more work, it will take a lot of work on smolders. Sorry, finds this but it's really small. Those are really the next frontier because it's 40% globally. But in some countries it's 90% of the production which is a smaller as you look at Thailand we look at the shipping, you look in most African countries, it's completely different than what
we're used to in Asia. So it will take a lot of work on seeing how do we support smolders to organize themselves and to then get on the way to certification. I do not know that will go to 100%. The Rscos goal is to go to 50.1%. That's our big dream. So we're almost halfway there. The last 10% are going to be the tough ones. I think the next 20% are going to be difficult but the last 10% are going to be very difficult to go beyond 50% for one
certification scheme. I don't even know if it's necessary. We need the R. S. P. 02 still lead and from there others can use the tools which have been developed. So if you look the RSP because of the Rs Q. There was the development of artists a lot more views of the high conservation value concept outside of the first three sector, there's also been the development of the high carbon stock approach that was done because there was the our skill, the R. S. P. O. In particular. It's a bit
like going into space if he wants. It's not for everybody but the race to space as made for the creation of a lot of tools and these tools then can be used by everybody else. So for example, because of the R. S. P. O. There was a bigger use of the high conservation value concept and application and the same, there was the creation of the high carbon stock approach. Is it? For only for the our skill. No, these are tools which would not have been developed if there
hasn't been the our skill. So they can be used now. They can benefit the rest of the industry.
I'm going to ask a question which maybe it sounds a bit naive as a consumer who wants to do more and do better. Spy sustainability goes. You say your goal is 50.1% right? But if I were to take that literally, it will mean that 49.9% of palm oil production is not sustainable. And in which case, what does not sustainable mean? And what does it look like that doesn't augur very well or sound very well for an entire industry, does it?
You're almost asking the right question. It's 49.10%. Not certified. Let's be clear there. So it doesn't mean it's not sustainable. It just means that it will not be certified. That's the big thing. Certification Not for everybody. I know of a few plantation companies just dislike the concept of being certified. RCO. If you look at their practices at the deforested. No. Are they treating their workers correctly? They are maybe even investing
in methane capture. I'm not so sure that the night as well, But it doesn't mean that they are that producers. It just means they do not want to be certified and we talked about smaller earlier to get 100% of the smaller satisfied. I don't think that will happen under the RSU. I don't think that will happen. It's a lot of investment, you need a strong, strong organization. It's all right not to be 100% are still satisfied, but it would be wrong also to see the are still disappear.
We've touched upon this a little bit already and I want to talk a bit more about legislation and what governments must do and use the two big players here as an example, Indonesia and Malaysia and Malaysia obviously has land acquisition laws, environmental laws and supposedly 12 other laws and regulations regulate the palm oil industry in terms of the overall structure of the industry then, especially because so much of it is constituted of small holders.
What more can the government do? Especially because these are smallholders who need extra attention. Do you think in the long term as well there's structural industry will change where maybe there may not be so many smallholders or will they always be part of the equation and something that both the government as well as larger players will have to work with.
Yes, I believe smolders are there to say as well in Indonesia, we look at the smaller population, they're still reasonably young. They've plotted pump some of them a while back a lot. Only in the past 15 years, I would say, what is encouraging from is that as you know, muslim as we work a lot on smaller, so we had a long five year project with the International Finance Corporation also. Now we have our own system and our in
our system. What we do is we train smolders directly, but what we try to do is work with local governments where we train their agricultural officers. So there can be good extension for the small donors. And what's encouraging is that we see some good interest from the local governance. I think they realized the benefits for them as well to have good extension services. There is a clear direction from the central government in
Indonesia to end deforestation. That's very clear and fires in particular, which is, I know a sensitive topic in in Singapore. So local governments are trying to find what they can do.
So enforcement of course is their duty, but they also have to be able to offer something and it cannot always be about enforcement and the negative side of things if you want, extension is important and the local governments, they might have the structures, but they do not always have the right curriculum or they do not always see what's the point what we do then. And I think that's what's important. And you talked about
the consumer as well. We bring some technical expertise because we know how to train and we have good curriculum already and so we're happy to share that and give a bit of motivation to the staff of the local governments. We also commit usually for a long period of time. So we have our teams permanently in one area for a couple of years. So that gives a lot of motivation and creates a stronger relationship, but most important, or at least as important, we try to connect the downstream users with
those landscapes and that's what's important. Also, it's about how do you show that there is a use to what you're doing? It's not stopping deforestation, having better farming practices, more responsible farming practices and then what, it's a long supply chain. So we need to connect the two ends of the supply chain so that the consumer and the consumer goods manufacturer have a better understanding of what's happening and how things are evolving, but also they realize that it's not the
flip of a switch and everything will change. And the same. The producers realized that there is a demand for better practices and for an end of deforestation. It's not a theory, it's not a government imposed the theory, it's actually a demand from the market, but that also the market recognizes them and see them progress and that works. It's not very simple, but it does work.
I'm going to start transitioning to final questions and I wanted to take a larger view now, you know, you see international jurisdictions like for example, the eu increasingly taking a stronger position on industries like palm oil and insisting things like sustainability on transparency. Speaking from Muslims, what's your take on some of the international trend towards focus on the palm oil industry, then we're
a big industry, uh I think it's an industry with a bad image, A lot of it is not deserved, but that's that's life. What worries me is how smolders work in that. So you were talking about the EU and it's difficult to see how the draft regulation that for the imported different position for the due diligence, how that works for smolders. I don't see that it night the manageable for corporations, but we should not forget smolders.
I think that's where the focus has to be. The commitments are no deforestation are made both by the industry and by the government. So I think we are at the stage where they are implemented effectively and if they are not fully implemented there will be, but it's a one way street. So there's no question there, but how do we make it still work for smaller? How do we continue increasing their income and give them an access market? And that's where the
difficulty lies with those big policies. It's difficult to integrate smaller, It's difficult to support them, but it's really critical, we cannot let them be on the side and be basically part of the non sustainable market because they do not have the means of entering the real market in the main market. Behind
the crux of so much of our conversation has revolved around smallholders. Last question, therefore, from the small holder to the consumer. And so much of our previous podcast as well has focused on the awareness and ability and willingness of consumers to pay ultimately for a more sustainable product? In the long term, I presume that sustainable palmer will
factor into cost. What muslim Masters view on that and what's the role that you will play in accepting that costs will rise to make sure that it is verifiably sustainable. And do you think more can be done to educate consumers that we do want to do the sustainable thing? But it will come with costs and what are these costs going to constitute?
Our industry is quite transparent today but needs to be a bit more transparent. Our problem is that we do not have a direct relationship with the consumer. Like I said that the selection is quite long. In terms of course for sustainability, a lot of producers are not unsustainable. They are actually already sustainable, they're not producing in the wrong way. But you use the right world, you said verifiably, how do we manage to get things verified in a way that is credible. And how do we
pass that value all the way to the consumer? I'm not worried about costs. I do not believe that it will generate massive costs. Were fortunate enough with found that the yields direct are so high that the cost of production is not so big and the cost per unit if you want to be verified, sustainable is not so massive. So the consumer should not be afraid of sustainable local life. It's something really to embrace, how to verify and how do you verify consistently? How do you bring that?
There's already an effort on transparency? I mean it's still within the industry and not all the way to the consumer, but there's a reporting framework that's very transparent. Train the good and the less good. I mean the progressing companies and so we need to do more work on that and we need to have more transparency on how things are verified and from the consumer, the consumer should accept that it will not cost in or her too much. No, but it has to accept that there is progress done.
How do you support that progress accepting Palm products but asking for transparency, that's the right way for the consumer costs
should
not become the main concern. I do not believe so.
Well, I can't end without then a final word on the producers as well. Producers of the ice cream of the snacks of soaps and shampoos. What more can they do in the supply chain to ensure that what comes to the consumer is therefore sustainable and as you say, potentially do so without significantly increasing costs. I suppose there will be some more enlightened producers out there, but there must be some who are also lagging behind I suppose right.
Yes, they are. I mean it's difficult if you're a small, medium size producer to ask for sustainable certified products. But you can ask for something else. You can check for us from whom I like buying. Do I have transparency at least this my supply of transparent on its supply chain. We are very transparent and you can go on our website and see from everybody from when we die.
We're not the only ones. There's a few of us out there were very, very transparent from where do we get the products that we refine transparency is good for business. It's good for long term business. It creates trust. So I do believe that producers want to start on their journey to more sustainable products. I would say first transparency ask for transparency, you know where the products come from? Where is this fraction coming from
and buying serena buying this or that? Where does it come from? Can you tell me do you have transparency? You have possibility all the way at least with the meals if possible. To the plantation
olivier Tissot as a journalist, I'm all there with you as well and transparency. Thank you very much.
Thank you very much
and thanks for listening to the climate conversations. Stay up to date on CNN's coverage of climate change on Sienna to asia. You can also find this and other CNN podcast on our website and on itunes and Spotify the team behind this podcast, Christina robert, Lynn schooling and Aaron low I'm Jamie ho till next week. Mm hmm. Yeah