Inside Unilever's sustainability myth
By Daphné Dupont-Nivet, Anouk Ruhaak, Marije Schuurs, Jaap Tielbeke and Emiel Woutersen of platform Investico in Amsterdam.
‘When is the last time you heard a CEO at this level have these types of conversations?’, the excited host of the Social Good Summit asks the audience. Paul Polman, Unilever’s chief executive, steps away from the microphone amid rapturous applause. He has just told the predominantly young crowd at New York’s trendy art centre 92nd Street Y that companies should put the common good before annual profit.
In his speech, Polman slates corporate short-term thinking and makes a case for a new economic system. That evening, on 25 September 2015, the Unilever boss is awarded the title of ‘Champion of the Earth’, the UN’s highest environmental accolade. His initial ambition was to become a priest, Polman tells interviewers with some regularity. In a 2009 interview with management consulting firm McKinsey, the Dutchman lists the world leaders who inspire him: ‘Gandhi, Mandela and Mother Theresa. They always put other people’s interests before their own.’
Ever since Polman took the reins at Unilever, sustainability has been at the core of the Dutch-British transnational company’s corporate strategy. Not only is sustainability perfectly compatible with commercial success; Polman claims the company can halve its environmental impact while ‘growing the business’ at the same time. In 2010 he presented his roadmap for sustainable growth to the world. The Unilever Sustainable Living Plan shows a company acutely aware of the great ecological and social challenges of our time, such as global warming, imminent food shortages and the ever-widening gap between rich and poor. Charity does not come into it: the plan is simply a matter of common sense. Unilever will profit too if it can still grow tea in Kenya and sell soap to Bangladesh 30 years from now.
It is entirely possible that Unilever's so-called sustainable, RSPO-certified oil has been produced on illegally cleared land, using child labour
Unilever has been a fixture at the top of the Dow Jones Sustainability Index for years and heads Behind the Brands; charity organization Oxfam’s sustainability assessment of food sector companies. NGOs like the WWF, always quick to hold transnational companies to account, are queuing up to work with the company. In the words of Paul Polman: Unilever is ‘the world’s biggest NGO’.
The Unilever plan identifies three main missions: ‘improving health and well-being’, ‘reducing environmental impact’ and ‘enhancing livelihoods’. Each mission comes with a set of concrete goals. Unilever is not making vague promises but turns sustainability into a set of measurable units so any progress can be translated into precise figures. The 2016 annual report, for instance, boasted a drop in product ‘waste impact’ of 28 per cent. It says 51 per cent of all agricultural raw materials was sourced sustainably. And thanks to the transnational company, some 920,000 women were able to participate in initiatives aimed at improving their safety, skills and opportunities.
The recent £115 billion ($142 billion) hostile takeover bid from ketchup producer Kraft-Heinz couldn’t have come as a greater shock. Suddenly the beacon of social responsibility was in danger of being swallowed up by an amoral competitor. With the disastrous Cadbury sell-off still fresh in his mind, British shadow industry minister Iain Wright talked of a ‘fire sale’ caused by Brexit. The plan was shelved after just two days but the commotion rumbled on. ‘Barbarians at the Plate’, The Economist headlined.
The takeover plan was hatched by American billionaire Warren Buffet and Brazilian investment fund 3G Capital, ruthless venture capital investors interested in asset stripping and making a quick profit, not at all the sort of people Polman wants to do business with. In 2015 he told Forbes: ‘I don’t have any space for many of these people that really, in the short term, try to basically speculate and make a lot of money.’ But Kraft-Heinz’s brash move seemed to have unsettled him. Shortly after becoming CEO, Polman announced he would no longer publish quarterly profit. Now he let it be known that he would explore ‘options to accelerate the delivery of value for the benefit of our shareholders’.
Last week the Unilever CEO rolled out a new strategy. It includes selling the margarine and spreads division, borrowing money to buy back shares, preparing a future separation of the food businesses and a new cost-cutting program. Sustainability remains ‘very important’, Polman added. ‘70 per cent of our shareholders have been with us for seven years, and 85 per cent of them say that sustainability is very important. They know that you need to have a responsible contract with society to take costs out of your system, to lower risk, to attract the right people.’
Unilever’s sustainability credentials seem to be pretty much ironclad. But what is it about a Unilever stick of deodorant or tin of soup that makes it so sustainable? Can a food and detergent giant which is active in 190 countries, has a portfolio of more than 400+ brands and annual sales worth €53 billion ($56 billion) in 2016, really save the planet – and sell more products at the same time?
Unilever leaves nothing to chance. Every green intention is embedded in detailed standards and elaborate policy plans.
The voluminous Sustainable Living Plan is propped up by an even more voluminous amount of paperwork on criteria for sustainable agriculture, healthy food and responsible management. Lipton tea carries a Rainforest Alliance label with a separate set of conditions. Unilever is the driving force behind a round table on seeking sustainable solutions for the palm oil sector with other companies and NGOs. The company’s sustainability audit is done by the accountants of PricewaterhouseCoopers. What we were looking at was a maze of rules, intentions and aims whose very transparency obscured a clear understanding.
Companies like Unilever ‘embrace their critics, involving them in a dialogue that is open in the sense that a lobster pot is open, breaking down critical distance and identity until no one knows who they are any more’ - George Monbiot, journalist
To find out what was what in the real world, we decided to look at three concrete cases. We travelled to Flanders to learn how farmers grow sustainable vegetables by means of an agriculture code developed by Unilever. We investigated what makes Dove a ‘Sustainable Living Brand’ and a sustainability success story with pride of place in the Unilever annual report. We also flew to palm oil plantations in Indonesia to find out whether Unilever makes good on its promise to source its most important raw material in a sustainable way.
We found that Unilever does put more effort into saving the planet than many other companies. But we also discovered that the company scores well because it alone determines what constitutes ‘sustainability’. Its close cooperation with NGOs, the authorities and the media has given it an almost unassailable status. Companies wanting to opt for sustainability are confronted with dilemmas that Unilever refuses to acknowledge.
‘You’ll have to point it out to me, I really can’t read it like this. Can I have my reading glasses?’ asks Anniek Mauser, Unilever’s Sustainability Director for Benelux (Belgium, Netherlands and Luxemburg). Her spokesperson makes a dash for her office and returns, glasses in hand. Mauser has worked at Unilever for 15 years. On her desk sits a tin of ‘Original Vegetable Soup’. Not only is it ‘rich in taste’, it is also made with ‘sustainably grown vegetables’. In tiny letters the label also states that 16.7 per cent of the soup consists of ‘sustainably grown’ carrot, leek, tomato and celery. The vegetables are grown by farmers who work in accordance with the Unilever Sustainable Agricultural Code, Mauser explains.
The Code dates from 2010, the same year Unilever launched the Sustainable Living Plan. The Sustainable Agriculture Code is not an official quality mark but a set of guidelines developed by the company covering bio diversity, animal welfare and crop protection. At the moment, 92 per cent of all Unilever vegetables are grown in accordance with the code. These vegetables not only go into the vegetable soup, they are also used in other soups and sauces. By 2020 all agricultural raw materials used by Unilever will be sustainably grown.
‘Ours is a leading agricultural programme,’ Mauser says. ‘It’s a worldwide standard subject to constant revision and based on scientific research and the expert knowledge of various NGOs and universities.’ But the exact content of the code is not easy to pin down, even after a thorough study of all 248 pages of rules and conditions. It’s comprehensive and seemingly ambitious, but criteria are seldom straightforward. Unilever is not in favour of atomizing pesticides, for instance, but allows it if it’s the only economically viable solution. Unilever provides protective clothing to ‘reduce risks to an acceptable level’ but the definition of an acceptable level remains unclear.
There is no discernible difference between the sustainable contents of Unilever's vegetable soup and the vegetables grown in the usual way in a Belgian or probably any western European field
Many of the criteria have not been made into mandatory rules and those that have tend to state the obvious. Farmer criterion 15, for example, says farmers are only permitted to use pesticides allowed by law. Criterion 34 states that growers are not allowed to dispose of medical waste on their land unless the country’s laws say otherwise. In other words: sustainable farmers have to obey the law.
In order to find out what the sustainability rules mean in practice, we try to locate a Unilever farmer. We contact national agricultural organizations, auctioneers and traders. We conduct a Twitter search and approach farmers at random. But no one seems to know who the Unilever farmers are.
So, we ask Unilever to lead us to its growers. This takes us to Belgium and Flemish farmer Ignace Vercruysse’s utility room. The space, dominated by book cases full of papers, suggests his job involves plenty of paperwork and accountancy. Vercruysse is no ordinary Unilever farmer. He is a ‘landmark farmer’, a member of Unilever’s chosen league of 42 excellent growers. He puts fewer plants on his land allowing his crops more light and air. He proudly shows us a container in which bacteria break down residual pesticide.
But this device is not a requisite tool for Unilever farmers, we learn at the farm of Luc Vancanneyt. He is a Unilever grower too, although he was unaware of that fact until we told him so. He is not biodegrading residual pesticide, but fights pests in another sustainable way. To illustrate this, he shows us a yellow, tacky square attached to a metal pole: the sticky trap. The farmer uses it to catch carrot flies whose larvae feed on the roots of his carrots. Vancanneyt used to spray his crop every fortnight, plague or no plague. Now that he uses the sticky traps he only sprays when the tally on the trap is over 10 flies. ‘I think I cut back my spraying by about 30 per cent.’
But that is not a particularly unusual feat. His neighbour – whose crops don’t go to Unilever – also uses sticky traps in his field. ‘Every carrot farmer uses them.’ So what distinguishes an ordinary farmer from a Unilever farmer who uses the Sustainable Agriculture Code as a guideline? Our Flemish farmer looks confused. He has never heard of the Sustainable Code. His farming practices are in accordance with the National Sustainability Plan, which was formulated by agricultural organizations and growers. ‘Practically every Belgian farmer keeps to this plan.’
Vancanneyt’s sustainable carrots go to Unilever via the Ardo food processing plant. ‘All carrots end up on the same conveyor belt,’ an Ardo spokesperson tells us. ‘We could separate them, but because Unilever is such a big buyer it really wouldn’t be worthwhile.’ This means that the same ‘sustainable’ carrots used by Unilever also make their way to the kitchens of hospitals and prisons, as well as to regular meals, soups and the supermarket frozen food section.
At Unilever’s head office, Sustainability Director Mauser calls the company a ‘frontrunner’ in the field of sustainable agriculture. But, as it turns out, there is no discernible difference between the sustainable contents of the vegetable soup and the vegetables grown in the usual way in a Belgian or probably any western European field. ‘Fantastic!’ Mauser says. ‘That is exactly what we are aiming for. If we achieve our goals and others don’t follow, we fail. The more people use the code, the better.’
This, in sustainability speak, is called ‘raising the floor’: the gradual inclusion of the whole market. By formulating its own agriculture code Unilever not only makes its own vegetables ‘more sustainable’: other Ardo buyers also get the ‘sustainably grown’ ingredients as well.
The result is that Unilever’s sustainable agriculture norm in the Benelux is only marginally different from the norm applied in regular agriculture.
‘Idealism won’t get you far here. Whatever you bring to the table needs to contribute to business value’ - Jan-Kees Vis, Unilever's Global Supply Chain Director Sustainable Agriculture
The real change occurs outside of Europe, Mauser says. ‘We have examples of small-scale gherkin farms in India where crops have quadrupled. We use cartoons and local Bollywood actors who act out scenes on village squares explaining to farmers which seeds to use and how to water the plants. Sustainability really comes down to smart and more efficient production: more output with less input.’
Meanwhile, Unilever is making great play of the use of sustainable vegetables in its advertising. Knorr products all carry the ‘Knorr Sustainability Partnership’ label: ‘so that you know that we have sustainably grown ingredients inside’. In the Netherlands, Unilever and the country’s largest supermarket chain launched an action card telling consumers how to ‘choose sustainably’. Unilever accorded the Knorr label the same status as acknowledged quality marks ‘organic’ and Rainforest Alliance. Mauser: ‘In an ideal world, consumers will associate the Unilever logo with quality and sustainability.’
‘Be yourself, you are fine as you are’, is the message that welcomes female staff at the pink-walled ladies’ room at Unilever’s head office in Rotterdam. The mirrors carry stickers with the golden Dove logo. The cosmetics brand is one of Unilever’s five biggest brands. And it is becoming more important still, now that Unilever’s activities are increasingly geared towards personal care products. Personal care is Unilever’s fastest expanding division. Its share in the company increased by 14 per cent between 2011 and 2016.
As one of the company’s ‘Sustainable Living Brands’ Dove is ‘on a mission to contribute to the solution of a social or environmental problem’. One of the ways Dove tries to contribute is by reducing waste. Since 2013, Dove deodorants come in smaller, compressed cans which last as long as the old cans, but have the added bonus of reduced costs for transport and packaging. Deodorants only make up one of Dove’s four product groups, but shampoos, soaps and face creams are sustainable too, Unilever claims. Their social mission is to make women feel more confident.
During his time at Procter & Gamble, Paul Polman knew that a company aiming for sustainability must look at more than the environment alone. We must also tackle ‘poverty, disease, nutrition, the quality of women’s lives’, he wrote in a P&G sustainability report from 2000. As Unilever’s CEO, Polman was able to fulfil his ambition. With Dove, Unilever wants to help each woman to celebrate herself. Well-known Dove advertisements feature women of every size and colour exemplifying ‘real beauty’. In its Sustainable Living Plan the company states it wants to ‘boost the self-esteem’ of 15 million women before 2020. That milestone was reached as early as 2014.
To date, some 19.4 million girls have attended the Dove Self-Esteem course. The course material includes a worksheet on which the girls can describe what makes them feel good. ‘Use that as a source of inspiration when you’re feeling down. It will give you positive energy’, the text says encouragingly. ‘It really works, we have the figures to prove it’, Mauser claims. ‘It’s a scientific fact that attending a self-esteem workshop has a significant effect on girls.’
Unilever was an early adopter of sustainability at a time when a uniform definition of the concept was lacking. That enabled the company to set the rules of the game before the authorities could
The sale of Dove products skyrocketed from $2.5 billion to $4 billion in the wake of the ‘real beauty’ campaign, Fortune reported in 2015. ‘Dove is growing at a much faster rate than the rest of our portfolio,’ says Anniek Mauser. ‘It’s testimony to the efficacy of our sustainable growth strategy.’ And it is all thanks to the Unilever code, in which Dove teaching materials create ‘self-esteem’, and self-esteem equals ‘sustainability’.
Personal care products are a huge growth area, especially in emerging markets. Unilever’s sustainability endeavours in these countries are mainly concentrated on ‘improving health and well-being’. The soap brand Lifebuoy has the promotion of hygiene in Africa and Asia as its mission. It seems like a project of which the results will be difficult to gauge, but according to the hard figures of the Sustainable Living Plan, that’s not the case. It states that handwashing campaigns have already reached some 337 million people. That not only means greater turnover for Unilever but better hygiene for consumers as well. It’s a perfect example of a Unilever win-win scenario.
But what these scenarios sometimes fail to mention is the negative impact of ‘sustainable growth’ on the environment.
In the Indian village of Puttaparthi, in the state of Andhra Pradesh, vet Reddy is preparing for an operation. The patient, a cow, has been washed and shaved and is standing in a stable between two gates staring dully into space until the vet administers the anaesthesia. With a skill born from practice, Reddy makes an incision in the animal’s belly while his assistants keep the cavity open with four metal clamps. When Reddy cuts the stomach muscles the balloon-shaped stomach pops out. Then Reddy takes his knife to the stomach.
This is where the hard work starts: using both hands, Reddy rummages around in the stomach until he encounters a tough brown lump. It is made up of different types of plastic that have accumulated in the animal’s stomach. The acid in the stomach has turned it into a sticky, brown mass. Too big to remove in one go, Reddy has to break off bits of plastic one by one. The cow, still conscious, waits apathetically until the doctor has removed the final strands of plastic from her stomach. At the end of the operation Reddy has filled two big soup pans with plastic goo. The cow has lost 53 kilos (116 pounds).
Doctor Reddy’s operation can be seen in a documentary called Plastic Cow, produced by the Indian nature and environmental organization Karuna Society. Clementien Pauws runs an animal refuge in India and started organizing the operations after four of her cows died. In India cows roam the streets and honking rickshaws and cars give the sacred animals a wide berth. The real danger for the cows is not the traffic but domestic waste. Over the last 20 years, people in India have increasingly substituted local fresh produce with western, packaged food. Waste collection is sketchy and most of the packaging ends up in the streets, along with discarded curries and naans, where it is taken for food by the cows. The curries progress to the cow’s second stomach, but the plastic stays in the first. Cows can survive on this diet for years, Pauw says. ‘But only until the first stomach is full. Then they die.’
It is unlikely that the documentary’s cow figured in the executives’ thoughts when Unilever decided to explore new markets in the 1990s. The company targeted the so-called ‘bottom billion’ – the billion potential consumers living in the emerging economies. In the logic of Unilever, helping people combat poverty is sustainability too. But poor people have no money to buy expensive bottles of shampoo. CavinKare, an Indian competitor, had the solution: the single use plastic shampoo sachet. The sachet, comparable to the ketchup sachet in fast food restaurants, was eagerly adopted by Unilever, which extended its use to other products, such as deodorant.
The disposable packaging was initially meant to make products accessible to the country’s poorest inhabitants. But the sachets have made their way into middle class bathrooms as well. Supermarkets now sell them in bulk. The sales figures are impressive: market analyst Euromonitor claims that in Asia over 70 per cent of all shampoo is now sold in sachets. Unilever’s Indian subsidiary alone sells some 27 billion sachets each year. Unilever knows full well what the effects of the packaging on the environment are. The company recently promised that from 2025 it will use only recyclable plastic.
The business is growing – but not in a very green way. People want to consume responsibly but not less
‘The sachets shouldn’t exist at all,’ says Pratibha Sharma. Sharma is a project coordinator for environmental organisation GAIA and works with people who collect and sell discarded plastic packaging. These informal workers are the closest India comes to a waste collection service. The problem is that the plastic collectors are only interested in valuable recyclables, such as PET bottles. The sachets consist of three layers of different types of plastic which makes them difficult to recycle, so the collectors can’t make any money out of them. And even if Unilever were to pay them to collect the sachets, Sharma doubts it would make much of a difference. ‘Picking up all those small bits of plastic is very time consuming. There simply aren’t enough people to do the job.’
In the 1970s experts and policy makers could not mention sustainability without referring to ‘the limits to growth’: the impossibility of limitless growth on a finite planet. With the Brundtland report, published by the United Nations in 1987, attention moved away from a purely ecological approach in favour of a broader definition which emphasized economic development. And since the introduction of the ‘People Planet Profit’ concept in the 1990s, sustainability now rests on three seemingly equal pillars: social well-being, ecology and economy.
‘Idealism won’t get you far here,’ says Jan-Kees Vis, Global Supply Chain Director Sustainable Agriculture. ‘Whatever you bring to the table needs to contribute to business value.’
His attitude is emblematic for Unilever’s sustainability strategy: a business tool to improve its image, save money and create marketing opportunities.
We talk to Vis in the Green Room, a conference room at Unilever’s head office in Rotterdam decorated with wall paper depicting a lush, green forest. Vis – a no-nonsense character sporting a square moustache under straight specs – started out at Unilever in 1985 as a chemist and played a crucial role in establishing the company’s sustainability standards.
In those early days Vis was already in contact with sustainability guru and author John Elkington, inventor of the triple bottom line: People, Planet, Profit. According to Elkington, sustainability standards should not only apply to the environment (Planet), they should take in working conditions as well (People). If a company manages to implement these standards successfully, earnings will go up (Profit). In this way commercial success goes hand in hand with social responsibility. The adoption of these standards laid the foundation for Unilever becoming the ‘biggest NGO in the world’.
Unilever does put more effort into saving the planet than many other companies, but it scores well because it alone determines what constitutes ‘sustainability’
An important part of the strategy was to forge partnerships with real NGOs. In 1997 Unilever and the WWF established the Marine Stewardship Council quality mark for sustainable fishing.
‘People were worried the oceans were being depleted,’ says former Unilever CEO Antony Burgmans who headed the fish finger department of the widely-known Captain Birdseye brand at the time. ‘I was afraid we would get the blame. After all, we were the ones selling all those fish.’
Unilever was an early adopter of sustainability at a time when a uniform definition of the concept was lacking. That enabled the company to set the rules of the game before the authorities could. Unilever used a tried and tested strategy: market capture. In his book Bet the Farm (2012), food journalist Frederick Kaufman puts it like this: ‘Since no one can define the standard of sustainability because sustainability has yet to be translated into a quantifiable measurement, the first company to succeed in disseminating its equations owns the standard.’
Sustainable fish fingers were only a modest first step. Unilever wanted to make the rest of its portfolio sustainable as well, starting with the all-important raw material palm oil. Unilever and palm oil have been inextricably linked since the start of the company. It was the reason British soap maker Lever Brothers merged with the Nederlandse Margarine Unie (Dutch Margarine Union), giving birth to Unilever in 1930. Palm oil is an essential ingredient in both soap and margarine and by joining forces the companies could negotiate a better price.
Today Unilever is the world’s biggest buyer of palm oil, representing roughly three per cent of global sales. The vegetable fat is everywhere, from Dove shampoo to Hellmann’s mayonnaise and from Magnum ice creams to Flora margarine. It’s cheap, efficient and consequently hugely popular with food and consumer goods producers. Roughly half of all products on the supermarket shelves contain palm oil. In the last 20 years, European consumption of palm oil has quadrupled. It is the economic mainstay of Malaysia and Indonesia: some 85 per cent of the world’s palm oil is produced in these two countries.
The trade in palm oil is extremely lucrative (Profit), not only because palm oil is such an efficient crop to grow but because plantation workers (People) are systematically paid substandard wages. Human rights violations are rife, report Amnesty International and the International Labor Rights Forum. Ecological problems (Planet) accumulate as well. Apart from a number of protected nature reserves, Sumatra’s rainforest has practically disappeared. Between 1990 and 2010 70 per cent of the jungle on the island was cleared. Around the turn of this century pressure groups put deforestation at the top of the social agenda. ‘A last chance to save the world’s ancient forests,’ Greenpeace warned.
It’s 20 September 2002. In an airless little room at an industrial park in Hayes, West London, the great European names in the palm oil business meet. At the invitation of the Swiss office of the WWF, Unilever representatives, Dutch bank managers, a consultant from a sustainability advisory group, representatives from British supermarket chains, a delegate from a Swedish vegetable oil company – they have all come together to discuss ways of making the palm oil sector more sustainable. Unilever is all for it. After the successful cooperation on the quality mark for sustainable fish, the wildlife conservation organisation and the food giant join forces once again.
Initially the interests of the motley gathering of participants appear to be miles apart. The WWF wants to stop deforestation. Unilever aims to secure the long-term production of palm oil. Palm oil traders intend to protect their product from negative publicity. A Swiss supermarket chain sees sustainable palm oil primarily as a unique selling point. When the Malaysian and Indonesian palm oil producers join the discussion, things get even more complicated. They are far from keen to hand over any sort of control, especially at the request of their former colonial masters.
As the world’s biggest buyer of palm oil, Unilever has its own vision, the minutes to the meeting reveal. The company does not want palm oil to become a niche product available only in western supermarkets. Unilever’s goal is mainstreaming – engaging the entire market. Jan-Kees Vis, who represents Unilever in his capacity of Global Supply Chain Director Sustainable Agriculture, has come prepared and has a series of standards for sustainable palm oil ready to hand. And as Unilever’s definition of sustainability is a comprehensive one, the standards not only apply to deforestation but to social and economic well-being as well. If the sustainability standard applied to palm oil is limited to the prevention of deforestation only, Unilever will pull out.
Vis needs the rest of the sector in order to spread Unilever’s sustainability standards. From the 1980s, Unilever started to divest itself of its own palm oil plantations and refineries. It’s a decision which made the implementation of the company’s sustainability policy that much harder, although Vis, back in the Green Room in Rotterdam, is not much given to hindsight. ‘That was simply high level business strategy concentrating on core business’, he says, shrugging his shoulders.
After months of wrangling, a diplomatic solution sees the light: the Roundtable on Sustainable Palm Oil (RSPO), where all stakeholders have equal say and every decision must be consensus-based.
The RSPO label is no guarantee but ‘a shield which deflects greater scrutiny’
Over a decade later the palm oil sector sees the RSPO as synonymous with sustainability. It has developed its own sustainability label which is carried by a range of products. Thanks to the RSPO, 100 per cent of the palm oil used in its products is sustainably sourced, Unilever states on its website.
‘You’re not here to write bad things about Indonesia, are you?’ A stocky man in military uniform gives us a baleful stare. The heat in the bare little room at Pangkalan Bun airport is stifling. We move uneasily in our wonky plastic seats. ‘Tourists?’ He clearly does not believe us for one minute. Curious passers-by take out their phones to film the interrogation. Our passports have been confiscated first thing on arrival in Kalimantan. The local authorities want to know exactly what we are up to. ‘Have we come to investigate deforestation?,’ they ask. We make a great show of thumbing our Lonely Planet like the innocent backpackers we are not.
Journalists are not exactly welcome in the region. All too often the palm oil industry caused Indonesia to be shown in a bad light, with reports about forest fires, displaced primates, child labour, exploitation and the deeply rooted corruption which lies at the bottom of the lack of change for the better. The powerful palm oil companies are not keen on nosey parkers. And the police are more than willing to help keep them out. When we promise to limit our activities to a hike in the local nature reserve our passports are reluctantly restored.
Lian Pin Koh under a Creative Commons Licence
In the dead of night our guide hurriedly bundles us into a jeep. We have to go now, or we will be followed, he says. Soon the pale light of the headlights glides over neatly set out rows of oil palms. With our backs pressed against the seat to prevent the guards from spotting us, the driver passes the barrier of the first plantation.
The village of Kapuk is situated right in the middle of the plantation owned by palm oil giant Wilmar International. On the wooden veranda of the village chief’s house a group of men are smoking cigarette after cigarette. A truck laden with palm fruits thunders past, leaving a cloud of red dust in its wake. Part of its load could end up in European bathrooms or kitchen cabinets. In Unilever products, for instance.
The locals had high hopes when the palm oil companies came to the area ten years ago. ‘We thought that we would collaborate as equal partners,’ Kusasi, 54, a member of the indigenous Dayak tribe, tells us. Sitting on the floor, his legs folded beneath him, he points at the two folders bulging with papers in front of him. It’s the documentation on the conflict between the villagers and Wilmar. The hoped-for partnership never materialised. ‘We lost nearly everything,’ Kusasi says.
Some months ago, the villagers reported the company to the RSPO. Luthfi Bakhtiar, of the environmental organisation WALHI, the Indonesian branch of Friends of the Earth, assists them, even though he has little faith in the round table: ‘This is no solution to this problem,’ Bakhtiar says. ‘There are hundreds of land disputes like this in Kalimantan alone but last year only 11 cases in the whole of Indonesia made it to the complaint tribunal. In every single one of those cases the villagers were left empty-handed. Aided and abetted by a swarm of lawyers the companies overwhelm the villagers with legal texts and bureaucratic tricks. The RSPO should take on the role of neutral mediator. But it’s the palm oil producers that have the upper hand.’
Passing mile after mile of oil palms, we make our way to the next village. Suddenly an information board appears. ‘Protected animals,’ it says. Behind the sign, we see a straggly bit of primeval forest. Some high trees sharing a single desolate looking liana between them is all it is. It is, however, home to orangutans, three types of deer, black kites, hen harriers, scaly ant-eaters, macaques and proboscis monkeys, or so the board claims. This tiny bit of forest, the remains of what once was an impenetrable jungle, is touted as a ‘high conservation value’, or HCV.
The protection of HCV is a requirement for RSPO certified palm oil companies. But it is about as much use as a sponge in a flood. In its 2013 report Certifying Destruction Greenpeace claimed that, under the supervision of the RSPO, palm oil companies can continue to clear land with impunity, as long as the symbolic pieces of HCV remain untouched.
But not even the high conservation value forests on ‘sustainable’ plantations are safe. ‘When the inspectors come, the company moves the HCV boards to a piece of jungle that belongs to the villagers,’ says Rudiyansah. The left breast pocket of his faded polo shirt sports the name of his former employer Wilmar. As a weed control worker, he used to carry heavy pesticide tanks on his back in the searing heat day in and day out. ‘Sometimes I split the 50 kilo loads in two but that made it difficult to meet my spraying target.’ Failure to meet the company target meant his already sub-minimum wage was halved from four euros a day to two.
‘It’s a constant concern.’ Tiur Rumondang, director of RSPO Indonesia, is not surprised about the abuses taking place at the plantations. You need to understand the local context, she says.
The Roundtable which was supposed to promote sustainability has become a lightning conductor for an unsustainable production model
‘We are talking about a plantation culture that goes back to colonial times. It will take more than 10 years to change it.’ Rumondang’s office is on the fifth floor of a gleaming skyscraper in Jakarta’s business district. A motivational poster proclaims: ‘The private victory must precede the public victory. You can’t invert that process any more than you can harvest before you plant.’
But any kind of victory seems to be a long way off. A big gap separates the printed promises and what is happening in the field, Rumondang admits. ‘But we can’t patrol the plantations, we are not the police. We outsource that job to independent certification bodies.’ But the system is far from watertight. An inspector paying an announced visit to a large plantation is hard put to come away with a complete picture of everything that happens there. He ticks the boxes on his list and leaves. And as it is the companies themselves that pay for certification, corruption is an ever-present danger. That is why the RSPO has decided to hire accredited certification bodies to monitor the certification process. Rumondang laughs. ‘We even have to inspect the inspectors.’
For plantation owners, the RSPO stamp of approval makes all the difference. Some 21 per cent of the total palm oil output has now been certified sustainable. After the plantation workers harvest the ‘sustainable’ palm fruits these are loaded onto a truck. Within the space of 24 hours they are driven to a mill and processed. Tanker trucks then take the crude oil to inland ports to be transferred to containers after which it is pumped into tankers to start the journey down the Mentaya River via the Java Sea, the Strait of Malacca and the Suez Canal to Rotterdam port, its final destination.
On the quayside at Rotterdam port, a Wilmar safety inspector points at a ship that recently arrived from Papua New Guinea. It carries RSPO-certified palm oil stored in a sealed tank, fully separated from the non-certified oil throughout the trip. In this way, the inspector explains, producers and consumers can rest assured that the end product contains a ‘sustainably grown’ ingredient.
‘Ideally the segregated palm oil is pumped out first, followed by the conventional stuff’, the inspector explains. If the non-certified palm oil needs to be offloaded first, the ‘dirty’ pipes are meticulously flushed clean. What looks like an enormous foam earplug is pushed through the pipes under enormous pressure, popping out a bright orange from mopping up the last remaining oil. Not a single molecule of ‘bad’ palm oil is allowed to end up in the certified batch.
And yet it is entirely possible that this so-called sustainable, RSPO-certified oil has been produced on illegally cleared land, using child labour. ‘RSPO standards are inadequate, poorly enforced and offer palm oil consumers no guarantee that the oil they buy has been produced responsibly’, the 2013 Greenpeace report states. Amnesty’s report from 2016 is equally scathing: the RSPO label is no guarantee but ‘a shield which deflects greater scrutiny’.
Unilever has announced that in two years’ time it will use 100 per cent segregated sustainable palm oil in all its creams, soaps and soups. (Segregated sustainable palm oil is certified sustainable palm oil which is segregated from non-certified oil at every stage of the supply chain.) And yet the company claimed it was sourcing all of its palm oil sustainably as early as 2012. There is more to this, as a footnote on the company website explains. In 2015 only 19 per cent of the palm oil used by Unilever came from certified plantations. The rest was sourced from plantations that had never seen an inspector and don’t have to comply with the rules of the RSPO.
When, in 2015, Unilever announced it bought certified oil only, the company could do so by participating in the so-called GreenPalm certificate scheme by which ‘dirty’ oil was magically turned into ‘green’ oil. In this scheme, Unilever paid a couple of dollars more for every tonne of conventional palm oil by way of compensation. The money went to secure ‘sustainable’ production elsewhere. In 2016 Unilever abandoned the scheme and since then its efforts have been focused on buying ‘genuinely sustainable’ oil.
If you want to get the whole sector behind you, you must content yourself with small steps, Jan-Kees Vis explains at Unilever’s head office. ‘What’s the alternative?’ he asks. ‘No palm oil is not an option. Period. That’s not even up for discussion. Palm oil is by far the most efficient vegetable oil around, and Greenpeace and the WWF have acknowledged that too.’
It will hardly be news to consumers that quality marks can hide grim realities. Or that companies tout exaggerated claims or gloss over unpleasant truths.
But environmental organizations and pressure groups, too, are keen to present the RSPO as a success story. The consensus at the table is that while the reported incidents are unfortunate, the sector is on the right path.
International development organization Oxfam is full of praise for Unilever. Every year the development organization publishes Behind the Brands, an assessment of the sustainability policies of the 10 biggest food producers in the world. Unilever has been number One on the list since 2015. The ranking is based on the companies’ annual reports and policy plans. How the plans actually pan out in practice is not something that is looked into in great detail, admits Johan Verburg, responsible for corporate contacts at Oxfam. ‘It’s a way of forcing companies to be transparent and an invitation to other organizations to check if the companies are making good on their promises,’ he says.
But does that critical scrutiny actually take place? ‘That's a point of contention’, Verburg says after a long pause. ‘But the companies’ commitment to the cause at least shows a general awareness.’
In 2013, in an unconventional move on Unilever’s part, Oxfam was invited to look behind the scenes at Unilever Vietnam. While a report praised the company’s exceptional transparency, an accompanying blog post almost casually mentions a number of abusive practices encountered by the organization. Workers had to work overtime to earn a decent wage and were not allowed to organize themselves into unions. But the co-author of the report added ‘the findings in this report must not in any way be used to criticise Unilever’. A company ‘at the vanguard of the drive towards sustainability’ should be praised, not punished.
And praised it is. The Huffington Post offers Paul Polman column space to promote his message, and his company teamed up with online platform Vice to launch feminist channel Broadly. The Guardian newspaper cited ‘shared values’ as its reason for entering into a ‘fantastic collaboration’ with the company, since both the paper and Unilever are committed to sustainable living and ‘open storytelling’. The deal is that The Guardian receives a ‘seven figure’ amount in return for providing editorial space for Unilever’s ‘journalistic’ projects. Columnist and climate journalist George Monbiot was not happy about his paper’s deal with the transnational company. Companies like Unilever ‘embrace their critics, involving them in a dialogue that is open in the sense that a lobster pot is open, breaking down critical distance and identity until no one knows who they are any more’, he wrote at the time.
Unilever cannot be faulted for its dedication and good intentions. And as long as sustainability equals efficiency, all is well. Both Unilever and the world benefit, exactly the way Paul Polman likes it. Reducing the use of pesticides is good for both the environment and the company’s shareholders. The more fruit a palm oil tree can bear, the less land will have to be cleared.
But win-win scenarios are not often as clear-cut. Personal care product sales are up and while this means sustainability brownie points for Unilever, it also causes environmental problems in the emerging economies.
And the Roundtable which was supposed to promote sustainability, has become a lightning conductor for an unsustainable production model.
Unilever’s proud boast is that it has managed to ‘decouple’ or separate higher revenue from environmental impact. It is a first move towards the beacon of sustainable growth.
A closer look at the company’s Sustainable Living Plan shows Unilever is on schedule in most areas (although deadlines are moved about), except when it comes to the environmental impact of consumer use. That is where the bullets on the sustainability dashboard turn an angry red. Greenhouse gas emissions ‘per consumer unit' went up eight per cent from 2010. That poses a problem, since two thirds of Unilever’s total CO2 emissions stem from consumer use.
So the business is growing – but not in a very green way. People want to consume responsibly but not less. Authorities are willing to go green as long as the public purse does not suffer. And companies are no longer bogey men but part of the solution.
Paul Polman is a welcome guest because his message is a comfortable one. As head of a transnational company he is making the world a better place. But unlike his idols Ghandi and Mother Theresa, the Unilever boss, while looking after People and Planet, must never lose sight of Profit, as the recent Kraft-Heinz takeover attempt attests.
Traveling to Indonesia was made possible thanks to the financial contribution of the Free Press Unlimited Postcode Lottery Fund (Free Press Postcode Loterij Fonds).
Investico is an independent, non-profit platform for investigative journalism in the Netherlands. You can find them at www.platform-investico.nl or email them at: redactie[at]platform-investico.nl