The image of rainforests being torn down by giant bulldozers, felled by chainsaw-wielding loggers, and torched by large-scale developers has never been more fitting: Corporations have today replaced small-scale farmers as the prime drivers of deforestation, a shift that has critical implications for conservation.
Yet while industrial actors exploit resources more efficiently and cause widespread environmental damage, they also are more sensitive to pressure from consumers and green groups. As a result, activists have more power today than ever to affect corporate behavior and slow the dizzying pace of tropical deforestation worldwide. That power has been on display in recent months, as campaigns by environmental groups have forced major corporations to stop doing business with companies accused of widespread deforestation.
Unilever, the consumer products conglomerate, and other corporations recently canceled contracts with palm oil producers in Indonesia after investigations by Greenpeace and the BBC revealed that these companies were engaged in illegally clearing forests. Late last year and early this year, a campaign by ecotourism companies and the conservation group, Forests.org — a Web-based activist group — succeeded in forcing some European companies to stop trading in rare rosewood illegally logged in Madagascar.
The forces driving deforestation are seeking ways around corporate boycotts.
And since Greenpeace released a report last summer linking deforestation by cattle ranchers in the Amazon to major consumer products, including Burger King hamburgers and Nike shoes, the fallout has been profound. Now, major buyers of Amazon beef and leather goods, including Wal-Mart, are insisting on new sourcing policies in Brazil requiring full traceability and transparency from their suppliers to ensure that cattle products aren’t coming from former rainforest.
These developments illustrate an important shift in the battle waged by conservation groups to slow the destruction of tropical forests. Yet such success stories are not as clear-cut as they might appear at first glance. In many cases, after an initial victory by environmentalists, the forces driving deforestation have regrouped and are seeking ways around corporate boycotts.
For decades, deforestation was mostly driven by poverty — poor people in developing countries clearing forests or depleting other natural resources as they struggle to feed their families. Government policies in the 1960s, ‘70s, and ‘80s helped drive this trend by subsidizing agricultural expansion through low-interest loans, infrastructure projects, and ambitious colonization schemes, especially in the Amazon and Indonesia.
But over the past 20 years, this has changed in many countries due to rural depopulation, a decline in state-sponsored development projects, the rise of globalized financial markets, and a worldwide commodity boom. Deforestation, overfishing, and other forms of environmental degradation are now primarily the result of corporations feeding demand from international consumers.
Confronted by tour operators, three companies stopped transporting rosewood from Madagascar.
Seizing the opportunity to apply pressure on international corporate giants, activists have recently launched campaigns worldwide to slow the destruction of tropical forests. In 2008, Greenpeace ensnared Unilever — the world’s largest buyer of palm oil — in a scandal when Greenpeace claimed the company’s supplier was involved in forest destruction in Borneo. Hiring an independent investigator, Unilever learned that the palm oil supplier, Sinar Mas, was indeed illegally clearing rainforests and carbon-dense peatlands.
Last December, Unilever canceled a $32.6 million contract with a subsidiary of Sinar Mas, and earlier this year several more major buyers dumped Sinar Mas. Unilever subsequently blacklisted Duta Palma after a BBC documentary in February showed the Indonesian company was engaged in clearing protected forest for palm oil plantations.
However, Unilever softened its stance in early April, as company officials said they would consider buying palm oil from a Sinar Mas subsidiary if the company demonstrated that it is no longer involved in illegally logging forests.
In the Amazon, Greenpeace released the report last June linking deforestation by cattle ranchers in the Amazon to major consumer products, including Gucci handbags and Nike shoes. The fallout was immediate: Brazil’s cattle industry — the largest in the world and a dominant force in Brazilian politics — was brought to a standstill virtually overnight. Brazilian officials raided the offices of the country’s cattle giants and suspended or revoked some of their loans. Several of the cattle companies’ biggest buyers publicly rebuked the firms and demanded greater accountability for their supply chains.
Wal-Mart, Nike, and Timberland — all identified in the report as buying leather products or meat that came from cattle raised on deforested Amazon land — immediately announced new sourcing policies requiring full traceability and transparency from their suppliers to ensure beef and leather products weren’t coming from former rainforest. Under pressure from their customers and the government — which threatened billions in fines — Brazilian cattle producers, processors, and traders fell into line, declaring moratoriums on deforestation. The hottest commodity in the Brazilian Amazon became credible supply-chain management, spawning a rush to develop certification systems and land registries for “responsible” ranches.
“The industry — from Nike and Adidas to the slaughter plants — is under pressure to have a clean supply chain,” said John Carter, a rancher who runs Alianca da Terra, a Brazilian NGO developing a certification system for the cattle industry. ”Greenpeace essentially created a federal mandate that everyone had to come into compliance via a land registry. Greenpeace changed the game.”
Another potent example of the impact of international pressure on large corporations comes from Madagascar, a treasure trove of biodiversity in the Indian Ocean. In the aftermath of a military coup nearly a year ago, Madagascar’s rainforest parks have been besieged by illegal loggers targeting valuable rosewood and other hardwoods. The timber is usually transported by international carriers to Reunion Island and Mauritius in the Indian Ocean, and then on to China, where it is turned into furniture for export. Some of the wood ends up in Europe and the United States.
Madagascar’s coup leaders are apparently complicit in the lucrative trade, making it difficult to address the issue on the ground. So the pressure point for rosewood trafficking — at least in the short term — is foreign shipping companies. Confronted by tour operators whose business depends on national parks and wildlife, three companies — Spanfreight, Safmarine, and UAFL — immediately stopped transporting rosewood from Madagascar.
Many corporations are learning that it’s bad business to engage in environmentally poor practices.”
However, a French company, Delmas, continued carrying rosewood for months, making it a clear target for environmentalists. When word leaked about an impending shipment scheduled for late December, Forests.org seized on the opportunity, bombarding the company and the French government with thousands of messages, arguing that Delmas was undermining France’s negotiating position at climate talks in Copenhagen and facilitating the destruction of Madagascar’s national parks.
The campaign proved too much for Delmas, and in December the company canceled a major rosewood shipment worth an estimated $20 million to $60 million to traders. However, the company resumed shipments in March, prompting intensified campaigns by Forests.org and the Environmental Investigation Agency, a conservation group. That pressure prompted the government in Madagascar to accede to a ban on exports of rosewood and precious timber for two to five years.
“It’s really impressive that environmental activists have influenced a major corporation such as Delmas,” said William Laurance, a researcher at James Cook University in Australia, who has analyzed the transition from poverty-driven to industrial-driven deforestation. “Many corporations are learning that it’s bad business to engage in environmentally poor practices.”
But while the campaign achieved its short-term objective of blocking the rosewood shipments, the subsequent response from traders reflects the difficulties of going after corporate transgressors. For example, after a consumer in Germany complained to authorities that Theodor Nagel & Co., a major tropical timber importer based in Germany, was advertising “Madagascar rosewood” on its Web site, the company replaced “Madagascar” with “Brazilian.” Nagel said it had the proper permits to import rosewood from Madagascar, although conservationists note that many export documents in Madagascar are fraudulent, and the company is now under investigation.
Furthermore, traders in Madagascar are now reportedly looking for more discreet ways to ship rosewood. They may find that channel through Chinese freighters, whose owners have fewer qualms about international criticism.
Greenwashing — or misrepresenting the environmental qualities of a product — is another common strategy used by companies that come under fire.
The palm oil industry, which has consumed vast tracts of forest, is legendary for its greenwashing efforts.
A prime example is the new emphasis by Asia Pulp & Paper (APP) — a subsidiary of Sinar Mas — on being green. The company has long been notorious in activist circles for its poor environmental record, but major companies continued to buy from APP until consumer-oriented campaigns led by the Rainforest Action Network, Forest Ethics, and WWF, among others, accelerated a few years ago. In short order, some of APP’s most prominent buyers — including Staples, Office Depot, Wal-Mart, Woolworth, and Gucci Group — canceled contracts with the company. In addition, the Forest Stewardship Council, the green standard for certifying forest products, severed its association with APP.
To stem the loss of customers, APP hired a leading PR firm and launched a campaign rebranding itself as a leader in sustainability. Its new Web site features bird sounds and verdant forests while proclaiming its support for “economic, social, and environment sustainability.” The company also is running ads on CNN touting its green credentials.
“There’s been a growing sense of risk in the marketplace around doing business with APP,” explained Lafcadio Cortesi, forest campaign director at the Rainforest Action Network. “However, instead of responding to customer demands for reform on the ground, APP has dramatically increased their public relations activities and environmental claims.”
For example, in response to concerns that the company’s activities are worsening global warming, APP hired consultants to draft a report detailing the modest carbon footprint of its business. But that report failed to account for the bulk of their emissions, produced when they drain peatlands or cut down natural rainforests, Cortesi said.
At the same time, Cortesi said, APP is hiding behind a new set of marketing channels by creating or buying smaller companies that sell APP papers under different brands touted as “environmentally friendly.” One such example is Eagle Ridge Paper. In February, 10 environmental groups in North America — including the Sierra Club, Greenpeace, the Natural Resources Defense Council, and the Rainforest Action Network — issued a statement saying that Eagle Ridge was a new “marketing and distribution” arm for APP and urging major buyers, such as Staples, not to sell Eagle Ridge paper products.
But the logging industry is not alone. The palm oil industry is legendary for its greenwashing efforts. For all the virtues of palm oil as the world’s highest-yielding source of vegetable oil, expansion over the past 25 years has consumed vast tracts of forest across Indonesia and Malaysia.
But instead of acknowledging this and addressing concerns head-on, marketing bodies for the industry have tended to expend efforts on denial and greenwashing. The integrated market campaign includes Web sites, blogs, think tanks, editorials, and advertisements.
One industry video used iguanas and hummingbirds — species found nowhere near Malaysia — to suggest that biodiversity thrives in palm oil plantations, despite a large body of scientific studies showing that oil palm estates are biologically impoverished compared even with heavily logged forests. Yusof Basiron, CEO of the Malaysian Palm Oil Council — the government-backed marketing arm of the Malaysian palm oil industry — has gone so far as to claim that endangered orangutans benefit from living in proximity to oil palm plantations. Environmentalists scoff at the notion, maintaining that oil palm expansion is one of the greatest threats to orangutans.
These efforts illustrate the extent to which some companies will work to mislead consumers. However, some industry executives realize it will take more than deception to alleviate environmental concerns, and are working to improve environmental performance through certification programs that set standards for production and distribution.
These are dependent, however, on consumer preference for “greener” products. In some markets — notably India and China, but even, in some cases, in the United States and Europe — there is little willingness among consumers to pay a premium for eco-friendly goods. So while some palm oil producers have thrown their weight behind a certification program devised by the Roundtable on Sustainable Palm Oil (RSPO), demand for certified sustainable palm oil has been slow to materialize. In the end, consumer apathy could prove to be the biggest threat to greening the supply chain, and activist groups may increasingly find themselves having to call attention to environmentally friendly companies.