I arrived in Singapore two weeks ago, landing in a cloud of haze. For the last two months, my business school classmates in Southeast Asia’s leading financial center have not seen the blue sky and have been warned not to spend time outside, as the haze can get so heavy that breathing becomes dangerous. When they do go outside, they wear masks. The same haze hangs over Indonesia, Malaysia, the Philippines and an ever-growing swath of the region — and it has been happening annually. This year, it has reached record levels of pollution because of El Niño and the resulting delay in the rainy season.
This crisis has received too little attention in the Western media. How could something that has been affecting the health and well-being of such a large portion of the world’s population every year not have made international news until just this week? Especially given that this is an environmental catastrophe to which Western companies have contributed?
Palm oil lies at the root of the problem. Palm oil is in so many products we consume and use that it is nearly unavoidable. Western companies such as Cargill, Archer Daniels Midland and Unilever are part of a supply chain of producers growing, harvesting and processing palm oil into toiletries, food products and fuel used daily in the United States and other countries. This palm oil comes primarily from Indonesia, where over half the world’s oil palm fruit is grown.
Plantations in Indonesia use controversial slash-and-burn techniques to clear land to grow palm for oil. The forest being cleared, however, is not typical forestland with underbrush. Plantations are setting fire to Indonesian peatlands, creating fires that grow out of control and release so much carbon dioxide into the atmosphere that on some days, Indonesia exceeds the U.S. in its output of greenhouse gases.
Senior officials in Jakarta have reacted to the haze with surprising indifference. In response to complaints from Singapore, Indonesia’s vice president has been quoted as saying, “For 11 months, they enjoyed nice air from Indonesia and they never thanked us.” Meanwhile, the Indonesian government has initiated investigations into companies responsible for the slash-and-burn practices, suspending four Indonesian companies, but remains tight lipped about the identities of the other companies being investigated. President Joko Widodo cut short his visit to the U.S. last week to deal with the increasingly disastrous effects of the haze. But for the most part, Indonesia has ceded power to companies to do as they please in the peatlands.
This unprecedented release of carbon dioxide isn’t just dangerously contributing to climate change. The toxic gases released as the peatlands burn cause immediate and long-term health problems for those living under the haze, including permanent scarring of lung tissue, conjunctivitis, bronchitis, asthma and cardiovascular disease, not to mention stunted lung development in children. The immediate effects of the haze have caused 19 deaths in Indonesia as of the end of October. The Indonesian government has had to arrange for military ships to evacuate children from villages in some of the worst-affected areas because of the major health hazard.
The damage being done to the people of Southeast Asia and to the globe’s atmosphere right now points to a problem with the supply chain for palm oil. Western companies lack enough insight into their suppliers for palm oil, since vendors often subcontract growing and harvesting palm oil to smaller companies and farmers, who often engage in the practice of burning the peatlands without regard to the damage they are causing.
Cargill, for example, signed on to the Sustainable Palm Oil Manifesto in 2014, claiming it sought to end deforestation. However, the company’s hot spot updates published online this year indicate that its plantations continue to oversee the burning of peatlands. This indicates a serious lack of oversight and internal control over its plantations. While the transparency of after-the-fact reporting is a start, there should be more effort expended toward keeping fires from being set.
When it comes to the environment, Western companies contributing to the production and consumption of palm oil should be adhering to the same standards abroad as they would at home for the release of toxic substances during any farming or manufacturing process. It’s scandalous that these companies can go abroad to countries where standards or enforcement are laxer in order to increase profit margins at the expense of the environment.
It does not matter whether pollution occurs in the U.S. or Indonesia; we are all living on the same planet. When a company doing business in the U.S. dumps its responsibility for reducing negative externalities by engaging in reckless practices abroad, it should be held publicly responsible for the resulting catastrophe.
A company’s lack of insight into its supply chain should not be used as a shield either. Strengthening the due diligence and monitoring processes for the use of subcontractors is necessary to ensure that the costs of producing goods does not end up as negative externalities, costs unfairly borne by local people or the environment, at any stage. Maximization of shareholder value should not come at the expense of local or global stakeholders. Southeast Asian children deserve to breathe clean air, and the entire world deserves a shot at slowing climate change.
U.S. companies should take responsibility for the inputs that contribute to their bottom lines. If companies are not willing to do so, then consumers should hold them responsible by demanding ethical behavior. Also, consumers should reduce the number of products they purchase that contain palm oil or look for products labeled as containing certified sustainable palm oil. Pushing for legislation requiring all products sold in the U.S. to be made only with sustainable palm oil could also go a long way toward ending the annual haze blanketing Southeast Asia.
However, in the end, it is a matter of corporate responsibility. Transparent supply chains are the most effective way to end the production of palm oil products at the expense of the health of children and the environment. No one should have to wear a mask just to venture outside.