Palm kernel expeller has resulted in the destruction of forests in Papua, Indonesia, says Greenpeace © 123RF
Palm kernel expeller has resulted in the destruction of forests in Papua, Indonesia, says Greenpeace © 123RF

Fonterra feed supplier linked to deforestation

25 June 2018

New Zealand dairy cooperative Fonterra’s key supplier of palm kernel expeller (PKE) has been linked to a huge expanse of deforestation in Indonesia, according to a report.

In the report Greenpeace said New Zealand was the world’s largest user of PKE, importing a quarter of global supply. PKE, made by grinding up palm kernels, is used as animal feed.

Greenpeace said Fonterra had agreed to adopt an industry standard to ensure its use of PKE wasn’t leading to deforestation after a public outcry two years ago, but its main PKE supplier, Wilmar, has been linked with the mass destruction of rainforest in Papua, Indonesia.

Fonterra’s website says of its major PKE supplier: “Wilmar have a no-deforestation, no-exploitation, no peat policy, respect designated conservation areas and employ wildlife protection experts.”

But Greenpeace said photos taken on a recent flyover show an area of forest twice the size of Paris has been destroyed and said the concessions on Papua belong to a business called Gama, which in turn is run by Wilmar executives and members of their family.

“The international reputation of NZ’s dairy industry is seriously on the line here and so are the world’s last remaining rainforests.” said Gen Toop, Greenpeace’s sustainable agriculture spokesperson.

“Fonterra’s attempts to get rainforest destruction out of their supply chain have clearly failed. They need to get out of PKE altogether.”

“Our investigation has exposed Wilmar’s dirty secret. For years, Wilmar and Gama have worked together, with Gama doing the dirty work so Wilmar’s hands appeared to stay clean.”

Toop added that PKE was also one of the main drivers of dairy intensification in New Zealand, which has had negative environmental impacts, and he called for a re-focus on pasture-based farming and fewer cows.

A Fonterra spokesperson said: “As a matter of process, we will check with Wilmar that the information they have provided us previously is up to date and accurate.

“We understand and take seriously concerns about the exploitation of labour, human rights and land claims in South East Asia, aware also they are not confined to the palm oil sector.”

Separately, Dairy Australia has released its situation and outlook report, showing global market forces and domestic competition for milk supply look set to usher in higher farmgate prices. But high operating costs and decreased farmer confidence are expected to restrict production growth to about 1% in 2018-19.

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