Fonterra’s role in rainforest destruction exposed

Press release - August 23, 2009
Fonterra, the world’s largest dairy exporter, must take responsibility for the part it plays in rainforest destruction and the massive greenhouse gas emissions that result from this destruction in Indonesia and Malaysia, to feed NZ dairy cows, Greenpeace stated today.

Indigenous leader Raji Anis stands on his land once owned by three neighbouring villages. The land was taken from them by a palm company then cleared and burnt to plant palm.

A quarter of the world's production of Palm Kernel Expeller (PKE) animal feed, an economic product (1) of the Indonesian and Malaysian palm industry, was imported into New Zealand last year (2) with the majority going to feed dairy cows.  Around 95 per cent of all New Zealand dairy farms are shareholders within Fonterra.

Fonterra's half owned subsidiary RD1 has also forged a joint venture with palm oil giant Wilmar International (3). Wilmar is the world's largest trader of palm oil's and kernel and has a reputation as one of the world's worst rainforest destroying palm companies. Documented cases involving rainforest destruction, illegal burning and social conflicts over community lands have been levelled at Wilmar. (4)

"It's a scandal that Fonterra is feeding its dairy cows a product that is directly contributing to the destruction of the world's remaining rainforests and to increased climate change," said Simon Boxer, Greenpeace New Zealand climate campaigner.

"This makes no sense and the New Zealand Government needs to stop Fonterra importing palm kernel expeller into New Zealand," said Boxer.

Indonesia has one of the fastest rates of deforestation in the world. Indonesia has already lost 72% of its large intact ancient forest areas (5). According to recent estimates Indonesia is the third largest greenhouse gas polluter of any nation on the planet due to the destruction of its rainforest and peatlands. (6)

Many of Indonesia's unique forest dwelling animals are also on the brink of extinction including the orangutan and the Sumatran tiger.

"This is further evidence that Fonterra's short-sighted drive for profit is completely unsustainable," said Boxer.

"Fonterra's intensification of the dairy industry is fuelling rainforest destruction, increasing greenhouse gas emissions here and abroad, putting pressure on the health of our land and threatens our clean, green reputation. That's the cost - and I can't imagine that there are many New Zealanders, including the farming community, that would find this situation acceptable."

The import of palm kernel expeller has increased 2,700 fold since 1999, from 400 tonnes to over 1.1million tonnes in 2008 (7) due to the intensification of New Zealand's dairy sector and Fonterra's drive for ever greater milk production at lower costs. Over 1.5 million hectares of palm plantations planted on previously rainforested land in Malaysia and Indonesia would have been needed to meet the 2008 New Zealand imports of PKE (8).

None of the PKE imported into New Zealand meets stringent sustainability guidelines. Today's Sunday Star Times quoted Dr Vengata Rao the secretary general of the Roundtable on Sustainable Palm Oil (RSPO) as saying that "certainly very little expeller cake coming into New Zealand last year would have been RSPO certified at all". Greenpeace considers RSPO sustainability standards as not strong enough, as they don't include a complete prohibition on rainforest and peatland conversion.

In August, a Greenpeace New Zealand team journeyed to Sumatra, Indonesia accompanied by an independent journalist and an independent New Zealand farmer to document the devastation wrought by palm companies. They visited an orangutan rehabilitation centre and a formerly owned Wilmar palm concession. Whilst under Wilmar's ownership rainforests were cleared to plant palm, destroying the habitat of the Sumatran tiger (9).  Illegal fires were lit that destroyed carbon rich peatlands which led to prosecution by the Indonesian Government. (10)

Suzette Jackson, Greenpeace New Zealand communications manager who led the expedition stated. "Indonesia's rainforests are being destroyed at one of the fastest rates in the world. New Zealand should be helping to protect the climate and Indonesia's remaining forests not be destroying them."

PDF showing the Fonterra connection

Youtube video

Other contacts: Simon Boxer, Greenpeace New Zealand senior climate campaigner +64 (0) 21 905 579 Suzette Jackson, Greenpeace New Zealand communications manager +64 (0) 21 614 899

VVPR info: PHOTOS and VIDEO from Indonesia is available. Contact Phil Crawford on +64 21 229 9594

Notes: (1) Malaysian Palm Oil Board, “PKC is also an important product from the oil palm industry that generate substantial export earnings for Malaysia, which was approximately RM 337.9 million in 2003.” (141,240 million NZD). Palm Kernel Cake Marketing: Constraints and Prospects. Ahmad Borhan A, Nordin*; R Venugopal*; Nasir Amiruddin* and Mohd Arif Simeh* NOTE: Malaysian industry calls Palm Kernel Expeller, Palm Kernel Cake. (2) 2008 global exports total 4.7 million tons and imports by New Zealand total 1.1 million. USDA/FAS/OGA/ISAD/Oilseeds and Products. (3) RD1 Press release, June 2008. (4) A 2007 report by Friends of the Earth Netherlands, Kontak Rakyat Borneo and Lembaga Gemawan exposed Wilmar’s involvement in rainforest destruction, in ignoring national laws and the rights of communities and in forest fires in Sambas District, Kalimantan. Social_Impact.pdf/view?searchterm=Wilmar The Greenpeace Report ‘Cooking the Climate’ reveals a large number of Wilmar concessions on rainforest land as well as a large number of fire hotspots during the dry season. (5) World Resources Institute, The Last Frontier Forests, 1997 (6) Indonesia and Climate Charge: Current Status and Policies. The World Bank. 2007. (7) INFOS Overseas Trade Output (c) copyright Statistics New Zealand (8) Different palm oil production systems for energy purposes and their greenhouse gas implications. 2007. Department of Science, Technology and Society, Copernicus Institute for Sustainable Development and Innovation, Utrecht University, The Netherlands. This report provides figures that show that 700kg of palm kernel expeller is produced per hectare. (9) Page Social_Impact.pdf/view?searchterm=Wilmar Page 56. (10) PT. Jatim Jaya Perkasa, owned by Wilmar International until 2006. Palm from this plantation is still supplied to Wilmar International. Prosecution by Indonesian Government page 3. Indonesian Embassy news in Brief 1 September 2006.