{"id":12556,"date":"2016-11-04T16:36:58","date_gmt":"2016-11-04T20:36:58","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/from-chocolate-ice-cream-to-deforestation-in-borneo\/"},"modified":"2016-11-04T16:36:58","modified_gmt":"2016-11-04T20:36:58","slug":"from-chocolate-ice-cream-to-deforestation-in-borneo","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/from-chocolate-ice-cream-to-deforestation-in-borneo\/","title":{"rendered":"From Chocolate Ice Cream to Deforestation in Borneo"},"content":{"rendered":"

It was another three-case day at HBS! I woke up at 7AM, brushed my teeth with Colgate toothpaste, showered with Dove shampoo and Lux soap, had a bowl of Kellogg cereal, put on Clinique moisturizer and Mac lipstick before heading to school. In less than an hour on an average day, I have used six products that contain palm oil. The list doesn\u2019t stop there, palm oil is used in thousands of food & beverage, personal care and industrial items. Being one of the most versatile ingredient on Earth, palm oil is the world\u2019s most produced and consumed traded vegetable oil, accounting for 38% of global vegetable oil consumption in 2014\/15. [1]<\/p>\n

\"Example<\/a>
Example of products with palm oil<\/figcaption><\/figure>\n

85% of worldwide palm plantation is in Indonesia and Malaysia with total area of 14 million hectares. Emission due to palm oil deforestation and plantation account for 2%-9% of all tropical land use emissions from 2000 to 2010 [2]. Slash-and-burn practice in islands such as Sumatra and Borneo leads to severe haze crisis that impacted most of Southeast Asia countries annually and destroys biodiversity with endangered animals such as orangutan. \u00a0In 2015, more than 28 million people in Indonesia alone were affected by the crisis; the haze caused more than 100,000 additional deaths. The total cost of this haze crisis to Indonesia economy alone was estimated between USD35-47B. [3]<\/p>\n

\"Singapore<\/a>
Singapore in 2015 haze<\/figcaption><\/figure>\n

In addition, peat soil which is commonly found in tropical forest of Southeast Asia contains an amount of carbon comparable to the carbon stored in the above ground vegetation in Amazon. If all this carbon from peat soil is released, the amount is equivalent to nine years of global fossil fuel use. [4]<\/p>\n

 <\/p>\n

Being the largest palm oil processor and trader in the world, controlling 45% of global palm oil trade [5], Wilmar faces significant risks from all participants of the ecosystem. This business is not sustainable for farmers when they suffer severe health consequences and deteriorate farming conditions. Governments of Malaysia and Indonesia can impose significant financial penalty and regulations to mitigate environmental and economy damages. Another major risk is potential boycott of their customers due to increasing awareness of destruction caused by palm oil business.<\/p>\n

 <\/p>\n

In December 2013, Wilmar launched their policy of \u201cNo Deforestation, No Peat, No Exploitation Policy\u201d [6]. Partnered with Unilever, this movement pushed many other big names such as P&G, McDonald\u2019s, and Starbucks to join the zero-deforestation pledge. [7]<\/p>\n

 <\/p>\n

This policy applies not only to facilities and plantations that owned by Wilmar but also to all joint ventures and third party suppliers. Traceability is a big challenge in palm oil landscape given its high level of fragmentation and complexity. Within Malaysia and Indonesia, Wilmar has 44 owned upstream mills and 800-850 third party upstream mills.<\/p>\n

\"Complexity<\/a>
Complexity of Wilmar’s supply chain<\/figcaption><\/figure>\n

In January 2015, Wilmar is the first company to publish the list of known third party mill sources; by mid 2015, they had identified all direct mills supplying Wilmar operational facilities in Malaysia and Indonesia. Wilmar achieved more than 80% traceability in most countries that they operate in by September 2015. In addition, more than 80% of Wilmar\u2019s own plantation are RSPO (Roundtable on Sustainable Palm Oil) certified. [8]<\/p>\n

\"Traceability<\/a>
Traceability of Wilmar’s global operations in 2015<\/figcaption><\/figure>\n

Despite all these initiatives, Wilmar is still unable to prove that its suppliers are not responsible for accelerating rate of deforestation in Indonesia [9]. In fact, there are ongoing land grab claims and the haze crisis in 2015 was one of the worst air pollution in history of Southeast Asia. One pitfall here is the lack of enforcement in No Deforestation policy to its suppliers. Without a crystal clear guideline on consequences on non-compliance, effectiveness of the whole policy is questionable.<\/p>\n

 <\/p>\n

Deforestation is an issue at macro scale that I believe Wilmar can\u2019t address by itself. A tight partnership with government, companies and NGOs, together with ongoing education and incentives to farmers are required to make any drastic change. The landmark soy moratorium to prevent Amazon deforestation offers a valuable lesson for palm oil industry. An unprecedented collaboration between soy traders, producers, and users were signed in 2006, with participation of Brazil government, main suppliers of agricultural loans and Brazilian Space Agency in 2008 has led to a spectacular drop in expansion through deforestation rate from 30% to 1% [10]. In May 2016, the moratorium was renewed indefinitely. [11]<\/p>\n

Controlling half of total palm oil trade globally, Wilmar is in the position to drive changes in a product used by billions of people daily.<\/p>\n

 <\/p>\n

(735 words)<\/p>\n

 <\/p>\n

[1] World Wide Fund for Nature (WWF), \u201cPalm Oil Buyers Score Card 2016\u201d, http:\/\/palmoilscorecard.panda.org\/file\/WWF_Palm_Oil_Scorecard_2016.pdf<\/a>, accessed September 2016<\/p>\n

[2] Union of Concerned Scientist, \u201cPalm Oil and Global Warming\u201d, http:\/\/www.ucsusa.org\/sites\/default\/files\/legacy\/assets\/documents\/global_warming\/palm-oil-and-global-warming.pdf<\/a>, accessed September 2016<\/p>\n

[3] Wikipedia, \u201c2015 Southeast Asian haze\u201d, \u00a0https:\/\/en.wikipedia.org\/wiki\/2015_Southeast_Asian_haze#cite_note-27<\/a>, accessed September 2016<\/p>\n

[4] World Wide Fund for Nature (WWF), \u201cPalm Oil Buyers Score Card 2016\u201d, http:\/\/palmoilscorecard.panda.org\/file\/WWF_Palm_Oil_Scorecard_2016.pdf<\/a>, accessed September 2016<\/p>\n

[5] The Guardian, \u201cWorld\u2019s largest palm oil trader criticised for lack of progress on deforestation\u201d, January 2016, https:\/\/www.theguardian.com\/sustainable-business\/2016\/jan\/26\/worlds-largest-palm-oil-trader-criticised-progress-deforestation-wilmar<\/a><\/p>\n

[6] Wilmar\u2019s website, \u201cNo Deforestation, No peat, No exploitation policy progress update\u201d, December 2015, http:\/\/www.wilmar-international.com\/wp-content\/uploads\/2016\/01\/Wilmar-Policy-Progress-Report-Final.pdf<\/a><\/p>\n

[7] [8] Bloomberg, \u201cA Palm Oil King Develops a green conscience\u201d, March 2015, http:\/\/www.bloomberg.com\/news\/articles\/2015-03-12\/wilmar-chairman-pushes-palm-oil-industry-to-clean-up<\/a><\/p>\n

[9] The Guardian, \u201cWorld\u2019s largest palm oil trader criticized for lack of progress on deforestation\u201d, January 2016, https:\/\/www.theguardian.com\/sustainable-business\/2016\/jan\/26\/worlds-largest-palm-oil-trader-criticised-progress-deforestation-wilmar<\/a><\/p>\n

[10] Greenpeace.com, \u201cThe Amazon soya moratorium\u201d, 2014, http:\/\/www.greenpeace.org\/international\/Global\/international\/code\/2014\/amazon\/index.html<\/a><\/p>\n

[11] Greenpeace.com, \u201cBrazilian Soy Moratorium Renewed Indefinitely\u201d, May 2016, http:\/\/www.greenpeace.org\/usa\/news\/brazilian-soy-moratorium-renewed-indefinitely\/<\/a><\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

How consumption of daily products destroys forest in Southeast Asia<\/p>\n","protected":false},"author":2220,"featured_media":12557,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-12556","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\nFrom Chocolate Ice Cream to Deforestation in Borneo - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/from-chocolate-ice-cream-to-deforestation-in-borneo\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"From Chocolate Ice Cream to Deforestation in Borneo - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"How consumption of daily products destroys forest in Southeast Asia\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/from-chocolate-ice-cream-to-deforestation-in-borneo\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Orangutan.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"970\" \/>\n\t<meta property=\"og:image:height\" content=\"568\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/from-chocolate-ice-cream-to-deforestation-in-borneo\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/from-chocolate-ice-cream-to-deforestation-in-borneo\\\/\",\"name\":\"From Chocolate Ice Cream to Deforestation in Borneo - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/from-chocolate-ice-cream-to-deforestation-in-borneo\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/from-chocolate-ice-cream-to-deforestation-in-borneo\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/Orangutan.jpeg\",\"datePublished\":\"2016-11-04T20:36:58+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/from-chocolate-ice-cream-to-deforestation-in-borneo\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/from-chocolate-ice-cream-to-deforestation-in-borneo\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/from-chocolate-ice-cream-to-deforestation-in-borneo\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/Orangutan.jpeg\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/Orangutan.jpeg\",\"width\":970,\"height\":568,\"caption\":\"TO GO WITH AFP STORY INDONESIA-ENVIRONMENT-CONSERVATION-SPECIES-ORANGUTAN BY ANGELA DEWAN In this photograph taken on April 10, 2013, an endangered Sumatran orangutan with a baby clings on tree branches in the forest of Bukit Lawang, part of the vast Leuser National Park, its rainforests occupying areas of the two provinces of North Sumatra and Aceh located in Indonesia's Sumatra island. 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