Cargill and Palm Oil Production
Forest Conservation |
Forest Conservation
Cargill is committed to preserving High Conservation Value Forest (HCVF), which the Forest Stewardship Council, a non-profit organization devoted to encouraging the responsible management of the world's forests, defines as forests of outstanding and critical importance due to their high environmental, socio-economic, biodiversity, or landscape values.
Since the time Cargill began its palm plantation investments, Cargill has not knowingly cut down any HCVF to develop or expand any palm plantation. Before beginning any proposed development or expansion, Cargill assesses the area to determine if the proposed area contains HCVF. If these surveys reveal the presence of HCVF, Cargill will not develop it.
There are instances in which Cargill will clear non-HCVF land for plantation expansion, but before doing so, it will conduct a thorough environmental assessment to determine that the land is not HCVF. Cargill then develops a plan to ensure it complies with strict local laws on forest clearance, has the proper government approvals, follows the proposed RSPO sustainability criteria, and conserves protected species and habitat. Cargill has a strict “no-burn” policy, which means that it will not use burning as a method to either clear land or manage plantation waste.
Habitat and Species Protection
Cargill has a long-standing global standard for responsible environmental management and is deeply committed to being a responsible steward of the lands it operates. Cargill works to preserve both orangutans and tigers in and around its plantations, supports the orangutan and tiger habitat protection efforts of international NGOs, and has established internal policies to protect native animal habitat.
Cargill continuously monitors for the presence of orangutans and has worked with a local NGO to conduct surveys for orangutans on its plantations. As a result, Cargill knows that its Harapan Sawit Lestari plantation, in Kalimantan, is within the home range of orangutans. Additionally, Cargill has been working with international NGOs to monitor and research tiger-plantation interactions on its lands.
Cargill company policy explicitly forbids its employees and contractors from engaging in any type of animal trading.
Cargill monitors, assesses, and treats all wastewater it produces to ensure that it complies with applicable legal standards. The wastewater generated from milling operations at Cargill locations contains organic materials from crushing palm fruits. The organic content of the wastewater is reduced as the water passes through a series of cooling, settling, mixing, anaerobic and aerobic ponds. By relying on the natural activities of anaerobic and aerobic bacteria to break down the organic materials, wastewater can be treated to reach legal standards without needing to add chemicals.
Where permitted, some of Cargill’s plantations use the treated wastewater from this process to irrigate and fertilize the trees on its own plantations. This enables Cargill to conserve water and reduces its need to apply additional fertilizer on palm trees.
Plantation Employee Rights and Benefits
Cargill adheres to all national laws regarding labor rights. Cargill pays competitive wages and offers performance bonuses. As part of its long-standing commitment to ensure employee health and safety, Cargill provides health clinics for plantation employees that deliver basic health care for free. Cargill also provides day-care free of charge to employees as well as free housing to most permanent plantation employees.
In addition, Cargill builds schools for plantation workers and their families and provides the funds to the local governments to pay for teachers’ salaries. Since the government runs the schools, the government may assess fees on students, but Cargill does not.
Cargill’s policies include the rights of workers to organize and voluntarily negotiate on its plantations as outlined in Conventions 87 and 98 of the International Labor Organization (ILO). Cargill also allows unions access to Cargill-owned plantations to organize workers. Cargill has union members in its plantation workforce.
Cargill does not accept or support the use of illegal, abusive, or enforced child labor within its operations anywhere in the world. Cargill adheres to national laws that require those working on farms to be at least 15 years old in Indonesia and age 16 on plantations in PNG, provided that the job does not disrupt school attendance and that these employees are fully protected from potential economic exploitation and moral and physical hazards.
Cargill will not threaten or diminish, directly or indirectly, the resources or tenure rights of indigenous people. Cargill diligently strives to ensure it is using land to which it has a legal right and in which we are recognized by the country’s government as the rightful entity to manage the parcel.
If there are land disputes, Cargill seeks to resolve them. Additionally, Cargill will provide fair compensation to local communities in the event of loss or damage affecting legal or customary rights, property, resources, or livelihoods. Cargill will undertake all measures to help avoid such loss or damage.
In PNG, there is a statutory procedure where communities can lease their land to commercial enterprises. This is known as “lease-leaseback,” which is a system in which clan groups form an incorporated land group (ILG) to mobilize their land for plantation development. On palm plantations, this lease is usually for 20 years, which is the typical lifecycle before palm must be replanted. At the end of the lease period, the ILG can reclaim the land or sign another 20-year lease.
When and where local communities agree to lease-leaseback to Cargill, the company will ensure that the community is fully and accurately compensated for this land according to national norms. Cargill covers all of the ILG’s costs to develop the land. Cargill also strives to employ ILG members on the plantation.
In Indonesia, Cargill negotiates directly with individual landowners and local community leaders. The entire process is witnessed by local officials and requires payment by Cargill of statutory compensation to the local community leaders for existing crops, together with full notarization of agreements documenting Cargill’s ownership of the land rights.
Cargill will work to ensure that all mutual agreements with communities and individuals in Indonesia are clearly defined, documented, and legally established. Cargill will work to demonstrate clear evidence of long-term land use rights for the land (e.g. land title, customary rights, or lease agreements).
Regarding the health profile of palm oil, there are concerns that palm oil, as with other tropical oils, has high levels of saturated fatty acids. Fats and oils are comprised of chains of fatty acids, and each one has a different composition. While palm oil, like all edible oils, has some saturated fatty acids, it also contains a number of fatty acids that have been shown in scientific studies to have a neutral impact on blood lipid levels. In fact, 39 percent of palm oil is made up of oleic acid - the same fatty acid that is found in high proportion in olive and canola oil.
A food manufacturer’s choice of which oil and fat to use is based on customer preferences and can include such factors as taste, mouth feel, and shelf life stability. Palm oil offers many functional qualities that unsaturated fatty acids do not offer. Palm oil can also be used in many solid fat formulations without the need for hydrogenation. When used in this fashion, it does not contain trans fatty acid. It also does not contain any cholesterol and is a good source of vitamin E.
High crude oil prices and government subsidies and policies encouraging the use of vegetable oils as fuel alternatives have driven increased global demand for using palm oil to create biodiesel. In July 2006, Malaysia and Indonesia announced they would set aside 40 percent of their annual palm output for biodiesel.
While Cargill believes that biofuels have a meaningful role to play in helping meet global energy needs, the company also believes that the marketplace is the best place for such questions to be decided. Cargill will invest in biofuels and supply the biofuel market when and where it makes sense, including with palm oil.
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