- POSTED: 13 Sep 2013 09:36
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At the ASEAN Asia Forum, the first-ever panel of its kind involving the private sector met to discuss the haze situation and the way forward.
SINGAPORE: The haze in 2013 reached record-breaking levels, garnering intense levels of debate about whether enough is being done.
Indonesian and Malaysian palm oil companies are under intense pressure to be more sustainable and responsible on the ground -- even corporations that use palm oil in their products are being held accountable for the haze.
However, industry experts gathered at the 6th ASEAN and Asia forum in Singapore said the private sector cannot tackle the haze alone, and are calling on governments and consumers to do more to mitigate the risk of haze.
Solving the haze problem and working towards a sustainable future -- participants at the forum were hoping to hear good news but the message from the expert panel entrusted with showing the way forward was stark.
If Asia's current population, urbanisation and consumption trends continue, then the picture is not good as raw demand is going to lead to more land being cleared for agriculture in particular palm oil.
Abah Ofon, director of agricultural commodities research at Standard Chartered Bank, said: "In terms of how much palm oil is being consumed right now -- in 1960, we had one million tons of palm oil being consumed, but in 2012, we had on average 50 million tons of palm oil being consumed.
"If we look at the trends over the two decades, we're talking about 10 billion people by 2037 or 2040 consuming 6.9kg and that's leaving per capita consumption stable -- its probably going to rise in terms of the global amount of palm oil consumed to 70 million tons, now again that is quite phenomenal."
"For Malaysia, in terms of the limit they've placed on themselves, they can only go up as far as 5.6 milion hectares. So if Malaysia were to increase by say 80,000 hectares per year, it can only last for maybe 7 to 10 years before it reaches its limits. In Indonesia its a different story. Basically, official reports suggest that there is another 24 million hectares of land that can be allocated to oil palm so they can aggressively increase oil palms."
If the growth in per capita consumption of food progresses as it has historically -- "in the next 20 years, we are going to need around 400 million hectares of land for food," said Mr Ofon.
On the issue of land clearing for palm oil plantations, Wilmar International -- a prominent member of the Roundtable on Sustainable Palm Oil -- reiterated it subscribes to a no-burn policy.
Sharon Chong, senior manager of corporate social responsibility at Wilmar International Limited, said: "What Wilmar can do or has done is we have actually said that it's not just us who are not burning -- but if any of our suppliers are found to be burning, we will cut them off our supplier list. I think this sends a very strong message and hopefully, we are using the economic pressure to encourage people to stop burning.
"This is one way that we think we can do to help expedite the process of reducing and mitigating fire and haze. On the part of government, they too need a good rapid response system but for them it will be a bigger scale -- so they need a lot of monetary support and also knowledge and expertise support, because to contain fires they need a lot of investment into high technology, into aircraft and water bombing."
The majority of the world's palm oil supplies are not traceable back to the plantation on which they were grown, as palm oil from different plantations, mills and countries is intermingled at each stage of the production and delivery process -- making it almost impossible to identify whether it has been produced sustainably.
Unilever, which connects with two billion consumers a day, purchases palm oil for use in products such as margarine, ice cream, soap and shampoo. Having placed sustainability at the centre of its business model, Unilever has set an ambitious target to guarantee its buying of sustainably-produced palm oil.
Dhaval Buch, senior vice-president of supply chain (Asia and Africa) with Unilever Asia, said: "We buy 100 per cent of our palim oil, which is certified, but it is certification through an indirect means as we had declared. But by 2020, we will buy 100 per cent of our palm oil, which will be traceably certified.
"This is not a simple task as you can imagine because a lot of palm oil is produced and we are only procuring 3 per cent of it. None of these are excuses but these are genuine issues that we need to deal with."
It costs about US$250 to mechanically clear a hectare of land, which begs the question -- are ASEAN consumers prepared to pay more for sustainably produced palm oil to stop the haze from returning?
The 6th ASEAN Asia forum was organised by the Singapore Institute of International Affairs.