What is palm oil and why the controversy?

SBS World News: 26 March 2013

Palm oil is the most widely produced edible oil in the world, but its use is increasingly coming under fire from environmental activists and concerned consumers.


Palm oil is a vegetable oil, high in saturated fats (similar to coconut oil). It comes from the fruit of the African oil palm tree, and grows in the tropics — flourishing in heat and rain.

Around 87 per cent of palm oil is grown in Malaysia and Indonesia, and Australia imports approximately 130,000 tonnes of palm oil every year, according to the WWF.

It is the world’s most popular edible oil, and is an ingredient in around 50 per cent of products on Australian supermarket shelves, including food, cosmetics and toiletries, and is also gaining traction in the biofuel industry.

Palm oil’s popularity is due to a longer shelf life than butter and other vegetable oils, and because it’s cheap. Oil palms produce more vegetable oil per hectare of land than other crops.


Palm oil plantations are concentrated in Malaysia and Indonesia, where deforestation and less environmental regulation has led to indiscriminate forest clearing for monoculture oil palm crops, instances of illegal logging and a dramatic impact on threatened and endangered local species.

The environmental impact of the deforestation is huge. New research suggests it may be a big contributor to climate change, and it is also causing extreme damage to animal populations — including the almost extinct Sumatran orangutans, whose habitat is prime logging area.

WWF Australia estimates around 300 football fields worth of forest are cleared every hour to make way for palm oil production.


Environmental activist groups want consumers to have a choice when buying food containing non-sustainable palm oil.

Under current legislation, palm oil can be listed as “vegetable oil” in the ingredients panel, making it almost impossible to know if what a consumer is buying contains the product.

Some companies, like Woolworth’s ‘Select’ brand, do choose to list it as a specific ingredient.

The high proportion of saturated fats is also a health concern.

The Roundtable on Sustainable Palm Oil is a non-profit organisation comprising members from all steps along the production and supply chain, and aims to increase the use of sustainable palm oil in products by establishing industry standards relating to environmental and social concerns.

Companies involved in RSPO are members. Members using sustainable palm oil in their products are “RSPO certified.”

Globally, 14 per cent of palm oil is now certified by the RSPO, however there are some concerns among palm oil activist groups over the RSPO’s standards of regulation.

Activist groups routinely release lists of companies and products that use palm oil as an ingredient.


A bill introduced to parliament in 2010 by Senators Nick Xenophon and Bob Brown sought to require all food products containing palm oil specifically list it as an ingredient.

Palm oil production is incredibly important to the economy of countries such as Malaysia. In 2009 Palm oil exports employed more than half a million people and contributed 7.5 per cent of Malaysia’s GDP.

The Malaysian Palm Oil Council and the Ministry of Plantation Industries and Commodities of Malaysia said the Bill had “the potential to significantly damage the palm oil industry”.

Dr Yusof Basiron, Chief Executive Officer of the Malaysian Palm Oil Council (MPOC), told the 2010 Senate hearing that the mandatory labeling will “severely hinder Malaysian Government attempts to utilise palm oil as a means for alleviating poverty in our country.”

Within Australia, there are also other concerns surrounded mandatory food labelling.

CEO of the Australian Food and Grocery Council, Kate Carnell, told the hearing that labelling food based on environmental concerns — rather than the current food standards focus of health concerns — would be “huge step”.

In 2008 Food Standards Australia New Zealand (FSANZ) rejected an application for mandatory labelling as the goal of international reform was “beyond the intent and scope of FSANZ Act.”

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