India Palm Oil South-east Asia Indigenous People
Adani Wilmar ducking and weaving over palm-oil impacts
Oct 15, 2024
Adani Wilmar's almost exclusive use of uncertified palm oil means that the company is probably sourcing palm oil from areas of orangutan habitat that have been destroyed for oil-palm plantations. Image Geoff Law

The Adani Group’s massive palm-oil business receives less scrutiny than its coal and port operations. But it is no less significant. Adani Wilmar, the Group’s joint venture with the world’s largest palm-oil company, is one of India’s largest palm-oil importers, and India is the largest importer of palm oil in the world. Based on a first-ever review of data submitted by the company to an international certifying body, we reveal that just 3% of Adani Wilmar’s palm oil is certified as sustainable. The remaining 97% comes from sources with possibly dubious records regarding human rights, destruction of orangutan habitat, and other ecological impacts.

Incorporated in 1999, Adani Wilmar is a behemoth in Indian kitchens. Its brand, Fortune, consistently ranks as the number-one brand for cooking oils. It also sells rice, sugar, flour and semolina – all staples in Indian households. In this extensive product range, one product stands out for being the biggest and most controversial: palm oil.

Incorporated in 1999, Adani Wilmar is a joint venture between two corporate giants - the Adani Group in India and Wilmar, based in Singapore. Image from YouTube corporate video

Adani Wilmar is one of India’s top importers of palm oil. India is, in turn, the world’s largest importer of palm oil (it produces only a miniscule amount of it). Palm oil serves half of India’s demand for edible oils, and is widely used in restaurants, packaged goods and low-income households. Adani’s partner in the venture is Singapore-based Wilmar International, one of the biggest palm-oil companies in the world. It reports having 3509 sq km of oil-palm plantations in south-east Asia.

Aerial view of land cleared for palm oil in part of the Leuser Ecosystem, East Aceh, Indonesia. Image Greenpeace

Palm oil is perhaps the world’s most ecologically-damaging food product. In Indonesia and Malaysia, the world’s biggest producers, plantations of the oil palm have replaced natural rainforests and damaged habitats of endangered wildlife such as orangutans, elephants and tigers. Fires set to clear forest land for oil palm contribute to the ‘Southeast Asian Haze’. In many plantations, owners have been accused of abusing workers and keeping them in slave-like conditions.

Adani’s partner Wilmar has been accused of some of these practices. According to a Greenpeace report, Wilmar’s suppliers were responsible for more than 1400 square kilometers of burned land between 2015 and 2018. Another report by Greenpeace found that one of Wilmar’s suppliers was engaged in worker exploitation, violent evictions of indigenous peoples, destruction of orangutan habitat, and draining of peatlands.

This banner followed a Greenpeace investigation that uncovered loss of tiger habitat and other important forest within a concession from which Wilmar sourced palm-oil resource. Image courtesy Paul Hiton and Greenpeace

Adani’s massive footprint from its palm oil business receives far less attention than its domestic operations in coal mining, coal power and ports.  It processes palm oil near its ports at Mundra, Surat, Haldia, Paradip, Kakinada, Krishnapatnam and Mangalore. The Mundra unit opened in 2000 and expanded into India’s largest refinery of edible oils; the 2005 inauguration event for this expansion was graced by Narendra Modi (then the chief minister of Gujarat, now the Prime Minister of India) and the then central agriculture minister Sharad Pawar.

Inauguration of Adani Wilmar's expanded palm-oil refinery at Mundra, Gujarat, in February 2005 - attended by Gautam Adani and then chief minister of Gujarat, Narendra Modi.

In other words, Adani Wilmar is a major user of palm oil, a product with a history of ecological and human-rights abuses. Is Adani Wilmar a party to these violations?

In 2004, palm-oil producers came together with conservationists and other non-profit organisations to create the Roundtable for Sustainable Palm Oil (RSPO). The RSPO certifies palm oil as ‘sustainable’ based on a variety of criteria such as prohibiting the destruction of important forests and the exploitation of people. All RSPO members are expected to eventually use only certified oil. Members file annual progress reports declaring their use of palm oil, how much of it was certified, and when the company will achieve full certification.

The Adani Wilmar refinery at Adani's Mundra complex, Gujarat, India. Image Google

Adani Wilmar’s poor record

According to its annual disclosure for 2023 filed recently with the RSPO, only 3% of the palm oil used by Adani Wilmar is RSPO-certified. Adani Wilmar imported 1.5 million tonnes of the product in that year. This is equivalent to 16% of total Indian palm-oil imports in the year ending October 2023, which were the highest in the world (India reports oil import figures for November-October period while the RSPO disclosures are for the January-December year). In fact, the quantity of palm oil imported by Adani Wilmar in 2023 is higher than that of the Netherlands (1.38 million tonnes), the world’s 4th largest importer, according to the UN Comtrade Database. If Adani Wilmar were a country, it would be the world’s 4th largest importer of palm oil.

The proportion of certified oil has varied little over the years. Adani Wilmar filed its first annual progress report with RSPO in 2014. At the time, it sourced zero certified oil. In 2019, it made its first imports of certified oil, which at 28,859 tonnes amounted to just 2% of its total import. In most years since then, 2-5% of its palm oil was from certified sources, with 95-98% being uncertified.

This is unlike other major cooking-oil companies in the world, which have 27-40% of certified oils in their total turnover of palm oil. Bunge, the world’s largest oilseed processor, has 40% of its palm oil certified as per its 2023 declaration. Cargill Inc reported that 27% of its palm oil was certified. Wilmar International itself reports having 41% of its 1.7 million tonnes of palm oil as certified.

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In its latest filing for 2023, Adani Wilmar has set a goal that all the palm oil that it obtains will be certified by 2030. But its disclosures also show that this goal is not to be trusted. The company in 2014 set a goal to use only certified oil by 2023. In 2019 the target year was put back to 2025. In 2020 the goal was pushed further back to 2030.

The company says that it is unable to meet the goals because of poor ‘market demand’ for certified oils in India. In its 2015 report, it said, ‘awareness has to be created and local market need is very very less or nil.’ In 2017, it said, ‘depending upon the market requirement and also the conditions of the market in India, it will be decided [to have more certified oils]’. In 2019, it simply inserted a dash where it usually writes its explanations. Since 2020, it has used the same line: ‘This all depends upon market demands of certified oils in India.’ Through this period, its imports of palm oil doubled from 0.7 million tonnes to 1.5 million tonnes.

Smoke rises from the mangled remains of the forests in western Papua (Merauke district), where forest was trashed to make way for oil-palm plantations. Image Ardiles Rante / Greenpeace

Adani Wilmar’s responses, far from showing any commitment on its part to make its palm-oil supply sustainable, appear to be self-serving and in favour of status quo. The company seems to be hoping for market demand to magically appear while it makes the least possible contribution to raising awareness. Meanwhile, the destruction of the habitat of orangutans and tigers continues.

According to Gemma Tillack, Forest Policy Director for Rainforest Action Network (RAN), Wilmar controls 45% of globally traded palm oil and has been praised for over a decade for its ‘No Deforestation, No Peat and No Exploitation’ commitment. Despite this public undertaking, RAN says that Wilmar has failed to eliminate controversial sources of palm oil from its supply chain, especially in markets in Asia.

Northern Sumatra: Oil-palm bundles are processed into crude palm oil, ready for export to refineries in countries such as India. Image Geoff Law

‘One example of this failure is Wilmar's significant sourcing and trading of uncertified oils to suppliers in India, including through its joint venture, Adani Wilmar,’ said Ms Tillack.

Ms Tillack said that RAN’s investigations have repeatedly exposed Wilmar for sourcing palm oil that has been grown illegally at the expense of tropical rainforests in the orangutan capital of the world, with serious consequences for the global climate.

According to RAN, many players involved in establishing plantations of oil palm are responsible for human-rights abuses that include child labour, modern-day slavery and displacement of indigenous peoples. Plantations are also associated with clearing and burning rainforests that are habitats of orangutans, the Sumatran tiger, elephants and hundreds of bird species – some of them found nowhere else in the world. They are also known to drain and burn peatlands, turning a natural carbon sink into a major emission source.  It is to prevent precisely these atrocities that the RSPO and its certifications came into being.

A 2022 report by the US-based Rainforest Action Network on destruction of high-carbon forests in Indonesia, in part for the global palm-oil industry.

‘Wilmar’s sourcing of uncertified and untraceable oils through the RSPO Mass Balance Supply Chain is a major factor in its ongoing connection to deforestation in Indonesia,’ she said.

She said that Wilmar has also been exposed for the violation of rights of workers and Indigenous communities in its operations in Indonesia.

Other than saying its supply of certified oil would be based on market demand, Adani Wilmar has also chosen not to carry out the many activities to promote certified palm oil that RSPO prescribes. In its progress report, RSPO has a checklist of activities that firms can undertake to promote certified oils. These include investment in conservation initiatives and implementing policies and action plans to promote the use of certified product in supply chains. In its 2023 report, Adani Wilmar ticked none of these, instead choosing ‘others’ and writing: ‘Participating in the RSPO meetings and group meeting.’

A monoculture of oil palms in northern Sumatra, Indonesia. Image Geoff Law

Dominance in palm oil

India does not disclose import or export data of companies or individuals, treating it as commercially sensitive information. As a result, while the extent of India’s palm-oil imports is known, little is known about which company is responsible for the highest share. In 2022, publishing such information was declared a crime punishable by prison time and penalty (because of which it is impossible and possibly illegal in India to publicly claim if Adani Wilmar is indeed India’s biggest palm oil importer).

Given this secrecy by India, it is the information disclosed by the RSPO that illustrates Adani Wilmar’s dominance in Indian imports of palm oil. Wilmar International and Adani Wilmar have been members of the RSPO for many years; Adani Wilmar joined in 2010, earlier than most other members from India.

Reports by Adani Wilmar and its competitors suggest it to be the largest importer of palm oil in India. While it imported 1.5 million tonnes of oil in 2023, the next highest was 0.97 million tonnes by Emami Agrotech and 0.93 million tonnes by Patanjali Ayurved.

Adani Wilmar’s import of palm oil is comparable with that of some of the world’s largest palm-oil firms. It’s almost the same as Bunge, the world’s largest oilseed processor, which handled 1.7 million tonnes of palm oil in 2023. It is about half of the 3.2 million tonnes handled by the agro-business behemoth Cargill Inc, which owns over 1300 sq km of palm plantations in Indonesia.

Given this dominance, why does Adani Wilmar not import sustainable oil? Its reticence is shared by others in the Indian markets. Some of its competitors use no certified oil at all, as per their progress reports to RSPO. Both Emami Agrotech and Patanjali Ayurved had zero certified oil even in 2023 as did the relatively smaller Budge Budge Refineries and 3F Industries. Their explanations are identical. ‘There is no demand by our customers,’ writes Patanjali Ayurved. Adani Wilmar, too, listed ‘awareness of RSPO in the market’, ‘competition with non-RSPO members’ and ‘insufficient demand for RSPO-certified palm oil’ as the three obstacles to using more certified oils.

A Sumatran tiger - an endangered species whose habitat has been relentlessly destroyed for the establishment of oil-palm plantations. Image Widipedia

Interestingly Godrej International, an iconic Indian family conglomerate, reported the highest share of certified palm oils – at 10% – despite its comparatively small total use of 59,072 tonnes. And Emami Agrotech, the second largest palm-oil user but a far smaller company, said in its disclosure that it is ‘actively working to engage potential buyers and facilitate smooth business transactions in the near future, contingent upon the demand for these products in the Indian market.’

Adani Wilmar, as we noted, declared no such commitment. As it projects itself as a leader in the Indian economy, Adani could choose to set an example by keeping sustainability of rainforests above market considerations. Given its past track record, this seems unlikely.

Fruit of the oil palm - it is bundled up and then processed into crude palm oil ready for export.

RAN’s Gemma Tillack said that undertakings made by Adani’s joint-venture partner, Wilmar, have often previously proved meaningless.

‘Wilmar's sustainability claims simply cannot be trusted,’ Ms Tillack said. ‘Over the past decade, Wilmar has set, and missed, countless deadlines for achieving 100% certification and deforestation and exploitation-free supply chains.

‘Wilmar must accelerate the implementation of its No Deforestation, No Peat and No Exploitation (NDPE) commitment in all its operations and markets - not just in the EU or markets that prohibit the importation of deforestation-tainted palm oil.

‘Given the weakness in the assurance systems of the RSPO, Wilmar cannot rely on certification alone. RAN is calling on Wilmar to commit to transparent and credible third-party verification of the implementation of its NDPE policy.’

Meanwhile, Adani Wilmar continues to use uncertified oil and is therefore potentially implicated in abuses of human rights and the environment that occur in south-east Asia.