Palm oil's new pipeline: Africa

Indonesia's two year moratorium on commercial development of forests and peat lands, expected to come into effect this year, is forcing palm oil producers to look elsewhere for expansion as the demand and price of the controversial commodity soar. And Africa is the new destination for many.

Malaysia-based Sime Darby Plantation, world's largest crude palm oil producer, is said to be considering a $2.5 billion investment in Cameroon to develop 300,000 hectares of oil palm plantation. The company currently has 530,000 hectares of palm oil plantations in Malaysia and Indonesia.

Cameroon government may find the proposal attractive as the project promises to create 30,000 jobs in the impoverished country. But the expansion may alarm environmental groups who have been campaigning against the industry's unsustainable practices including destruction of natural forests.

Sime's expansion plans also include ventures in Liberia where the company has been granted a concession of 220,000 hectares.

Other palm oil giants which have announced plans to expand to Africa in recent months include Wilmar International, Olam International and Golden Agri. While Golden Agri has signed a $1.6 billion project in Liberia, Olam has announced a 300,000 hectares project in Gabon. UK-listed Equatorial Palm Oil already operates 169,000 hectares oil palm plantation in Liberia.

Palm oil prices have now crossed $1100 a tonne, almost doubling from the average $500 a tonne over the last decade. That explains frantic expansion plans by the industry players. The key question is: how will the industry ensure its expansion in Africa is above board, and sustainable?

Editorial ethics at Ethical Corporation

Ethical Corporation, the magazine that I write for, also has a significant conferencing business. I have been asked, on many occasions, how we maintain integrity and impartiality of what we write in the magazine and whether we can afford to embarrass the companies which are our conference clients or sponsors.
Well, here is the answer straight from Toby Webb, founder of Ethical Corporation magazine and himself a respected corporate responsibility commentator, in a podcast with Brendan May.

India's textile dyers opposing tighter environmental controls

Textile dyeing and processing industry in India is resisting the demands of zero liquid discharge system (ZLD). Environmental Campaigners want the industry to switch to zero discharge to save soil and water resources from being further polluted. The industry is responsible for releasing millions of liters of toxic wastewater which has destroyed water and soil systems in the neighborhood.

India's two largest textile manufacturing hubs are in Tirupur (South India) and Ludhiana (North India). On petitions filed by environmentalists, Madras High Court has ordered to shut down all dyeing units in Tirupur for failing to implementing ZLD.

In Ludhiana, the dyers associations are opposing similar demands from a local environmental activist. Read here.

These campaigns also expose a serious fault in multinational retailers' supply chain responsibility programmes. Retailers' current code of conduct programme does not extend to textile dyeing and processing units even though these units account for the largest environmental impact in the textile supply chain.

Court order to shut down polluting textile units in South Indian city

Hundreds of textile bleaching and dyeing mills in the South Indian city of Tirupur have been ordered to shut down by the Madras High Court in response to public petitions. Tirupur is one of the largest textile manufacturing hubs in Asia where most multinational retailers have suppliers.

Farmers groups have alleged that textile units dumped untreated effluent in the Noyyal river which farmers rely on for irrigation.

The court order also includes closing down Common Effluent Treatment Plants and Integrated Effluent Treatment Plants in the area. These plants were set up by the government agencies mostly to treat wastewater from textile mills. In a previous order in 2006, the court had directed these plants to achieve "zero liquid discharge" level. In the latest court filing, it is alleged that these units failed to comply with the court order and continued to operate and pollute the area.

Textile industry associations have banded together to put pressure on the government to allow effluent discharge until an acceptable solution is found. Farmers lobby is opposed to any leniency toward polluting textile industry.

Observers say that the industry has not taken its responsibility for wastewater treatment seriously in spite of repeated campaigns by farmers in the past. The industry is accused of destroying large tracts of farmland by contaminating water and land by dumping untreated toxic wastewater.

There have been reports in the past alleging that though textile units install wastewater treatment plants to meet retailers' code of conduct requirement, they seldom operate these plants because running treatment plants costs money! Government inspectors don't mind looking the other way as long as their palms are greased.

Tirupur is a key sourcing destination for knitted garments for a number of large and small multinational retailers. None of them has reacted publicly so far to the developments in Tirupur.

The city's textile industry also provides thousands of jobs. These jobs are now at risk as hundreds of units are now closed due to the court order. Trade unions have given a call to shut down the entire city tomorrow to put pressure on the government to find a solution so that units can be opened and jobs can be saved.

See more here

And here