A worker at a palm plantation area in Indonesia's Sumatra island. Photo: AFP
Greenpeace says Fonterra's palm kernel supply chain is tainted by connections to deforestation in Southeast Asia, as new evidence highlights New Zealand's major exporters to illegal plantations.
Two major exporters of palm kernel to New Zealand have been found to source kernel from illegal operations in Indonesia's Rawa Singkil Wildlife Reserve in Sumatra.
Greenpeace Aotearoa agriculture campaigner Sinéad Deighton-O'Flynn said the illegal mills have caused deforestation in the reserve, with dire consequences for critically endangered wildlife.
"The Leuser ecosystem is a biodiversity hotspot. It's home to various critically endangered animals, like the sumatran orangutan, tigers, and pigmy elephants. But we also know that hundreds of hectares of this forest will be cut down, replaced with palm trees, to make palm oil and palm kernel, and some of that has likely entered the New Zealand dairy supply supply."
Palm kernel - a palm oil byproduct - is used as feed for dairy cattle in New Zealand, with two million tonnes of it being imported every year from Southeast Asia, making New Zealand the world's biggest importer of palm kernel, Deighton-O'Flynn said.
An investigation by Rainforest Action Network in 2024 found 453 active hectares of illegal palm plantations operating in the Rawa Singkil reserve.
During that time, two exporters of palm kernel products to New Zealand - Apical and Musim Mas - purchased palm kernel from a mill that was trading products grown in the Sumatran reserve, Deighton-O'Flynn said.
In addition, last month a decree by the Indonesian Minister of Forestry implicated all of the five companies who export palm kernel to New Zealand - Wilmar International, Viterra, GAR and Musim Mas and Apical - in a list of 436 companies operating palm plantations illegally in Indonesian forest. Three companies were named by the Ministry, and two more have traded with mills on the list.
Fonterra has a commitment to making its supply chains being clean of deforestation by the end of 2025 - a target Deighton-O'Flynn said will be impossible to prove, because of palm kernel being difficult to trace back to the source.
"They are feeding their cows with tons palm kernel every single year, some of which may come from the destruction of rainforest in Southeast Asia, which puts them in breach of their own deforestation policy."
"Even if a small amount ends up in their supply chain, the whole thing is contaminated because you don't know which cow ate it and which KitKat it ended up in."
Deighton-O'Flynn said the only way for Fonterra to guarantee New Zealand dairy is to phase out the use of palm kernel on all farms.
"These rainforests that are being destroyed for palm oil and palm kernel are not only home to these incredible species of wildlife, they're also one of our defences against climate change."
"I think New Zealanders are really concerned about the impact New Zealand dairy is having overseas, and I think they'll be really concerned about whether the butter they're spreading on their toast is tainted by the killing of oranguatans and the destruction of rainforest in Southeast Asia."
In a statement to RNZ, Fonterra's director of sustainability Charlottle Rutherford reiterated the companies comitment to improving their supply chain.
"Fonterra is committed to sustainable sourcing of palm products and is working with others to improve practices across the supply chain," Rutherford said.
"Since learning of allegations around sustainable sourcing we have been discussing with Agrifeeds our request for evidence that the supply of PKE meets their No Deforestation, No Peat, No Exploitation (NDPE) policy."
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