Archer Daniels Midland Palm Oil 2011
|Company||Archer Daniels Midland Company|
|Filer||The Nathan Cummings Foundation|
|Subject(s)||Climate Change; Forests; Biodiversity; Palm Oil|
|Resolved Clause Summary||Palm oil sourcing|
According to Archer-Daniels-Midland Company’s 2010 10-K, the Company’s Oilseeds
Processing segment includes activities related to the origination, merchandising, crushing and
further processing of oilseeds such as palm into vegetable oils and protein meals for use as
ingredients by food, energy and other industrial product industries. In addition, the Company
owns a significant stake in Wilmar International Limited, the largest global processor and
merchandiser of palm and lauric oils and a major oil palm plantation owner.
The environmental and social impacts of palm oil make it highly controversial. Approximately
85% of palm oil is grown in Indonesia and Malaysia on industrial plantations that have severe
impacts on the environment. According to the New York Times, a study of practices at palm
plantations in Malaysia and Indonesia found that rising demand for palm oil led to the clearing
of huge tracts of rainforest. It also found that expansion of palm oil plantations often led to the
draining and burning of peatland. (“Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare.”
January 31, 2007)
Because of such practices, the production of palm oil is a significant source of greenhouse
gas (GHG) emissions. Due to deforestation and the burning of peatlands driven in large part
by palm oil production, Indonesia is now the 3rd largest emitter of GHGs in the world. A
recent report commissioned by Indonesia’s National Development Planning Agency found
that the conversion of peatlands alone accounts for 50 percent of Indonesia’s GHG emissions.
(Mongabay.com, “Indonesian Government Report Recommends Moratorium on Peatlands
Conversion.” January 19, 2010)
Indonesia’s efforts to reduce its emissions include a two-year moratorium on forest and peatland
conversions signed into law this year. (The Jakarta Post, “Moratorium issued to protect primary
forests, peatland.” May 20, 2011) The International Finance Corporation only recently lifted an
18-month moratorium on new palm oil investments that was prompted by concerns about the
social and environmental impacts of palm oil production.
The Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004 in an effort to address the
social and environmental concerns associated with palm oil production and promote the growth
and use of sustainable palm oil products. A growing number of leading multinational companies
have committed to source only certified sustainable palm oil by 2015. These include SC Johnson,
Walmart, General Mills, McDonalds, Mars, Nestle and Unilever.
RESOLVED: Shareholders request that the board of directors adopt and implement a
comprehensive sustainable palm oil policy that includes:
- A target date for sourcing 100% certified sustainable palm oil and for segregating and tracing certified palm oil throughout the supply chain,
- Plans to verify suppliers’ compliance with the policy, and
- Supporting a moratorium on palm oil expansion in rainforests and peatlands.