Palm Oil Production for the Food and Cosmetics Industry in Africa: Ethics and Sustainability Implications

Abstract

This study discusses the trend of palm oil production in Africa, its traditional and industrial system and finally the ethical and sustainability part of it. Palm oil which is a major component of the materials for food processing and cosmetics industries has a market size on the increase. Pressures on the industry in this regard have not yielded much fruit. Therefore, with the endemic corruption in the African political system, it is feared that the situation of Africa may be worse than Asia in terms of sustainability without strong ethical standards. Nevertheless, the ethical and sustainability questions surrounding palm oil production in Africa have been there through the years with its attendant human, social as well as environmental dimensions. Hence, this study seeks to highlight some of these ethical and sustainability questions.

1. Introduction

This work deals with palm oil production in Africa. In particular, it discusses the trend of palm oil production in Africa, its traditional and industrial system, and finally the ethical and sustainability part of it. Palm oil is a major component of the materials for the food processing and cosmetics industries. Its market size is on the increase. According to reports [1], the market size of palm oil in 2019 stands at 74.6 million tons and it is projected to register a volume-based CAGR of 2.3% from 2020 to 2027.

The increasing awareness of the health benefits of palm oil as an alternative energy source and with relatively low cost of production are the key drivers of the demand for palm oil. About 80% of the palm oil consumed worldwide is produced in South East Asia and largely Indonesia and Malaysia while the rest is produced in other parts of the world including Africa (Index [2]). With the Indonesian moratorium on oil palm plantations and Malaysia wanting to maintain the current level, the drive to supply the expanding demand for palm oil has moved to Africa. On account of the growing demand for palm oil, its production may not be avoidable, however, there are serious concerns about its sustainability (National Geographic) and ethical issues that accompany its production by Transnational Corporations (TNC).

Pressure on the industry in this regard has not yielded many fruits. With the endemic corruption in the African political system, it is feared that the situation in Africa may be worse than in Asia in terms of sustainability without strong ethical standards. Nevertheless, the ethical and sustainability questions surrounding palm oil production in Africa have been there through the years with its attendant human, social as well as environmental dimensions. This work seeks to highlight some of these ethical and sustainability questions.

2. Trends of palm oil in Africa

Oil palm is one of the most important economic oil crops in Africa. According to World Rainforest Movement, oil palm is indigenous to the Nigerian coastal plain though it has migrated inland as a staple crop. The Global Trend in the production and consumption of edible oils and fats is summarized in Palm oil, not only does it stand at the top among edible oils but also has an enormous value chain that increases job creation. According to [3], the trend has grown in recent times from a production level of 1.6% and a consumption level of 6%. Global palm oil production and consumption has grown to 28% in 2009 to become the world’s largest produced and consumed oil [4]. According to the report, Palm Oil Value Chain Analysis in the Niger Delta Nigeria for instance has it that palm oil recorded its fastest increase in global production and consumption due to the significant contributions by Malaysia and Indonesia. The report added that the techno-economic advantage of palm oil over other oils and fats, especially soybean oil, is the main driver of this increase.

2.1 The trend in the demand and supply of technical palm oil (TPO)

Production (supply) and consumption (demand) of palm oil have over the years shown an increasing trend due to its economic and health benefits. From 1964 to 2010, there has been rising production and demand. However, in the last 10 years, demand has grown faster than supply, leading to an increasingly widening gap. Accessing the specific gap of palm oil seems to be difficult because of incomplete statistics in Africa, but according to the USDA analysis which is based on estimated production and import figures, the shortfall in supply (the supply gap) is about 150,000 MT of palm oil per annum. This is shown in Figure 1.

Figure 1.

Trend in production and consumption of palm oil in Nigeria.

This global and steady increase in demand has incentivized many countries to invest in and develop highly competitive industries which will come with its challenges, including ethics and extorting of the locals.

3. The value chain of palm oil

The assessment of the value chain of palm oil in Africa will provide useful insights into understanding the markets, understanding the structure and operation of the Palm oil value chain, and in developing a vision and strategy for the growth of the value chain.

According to Eme (as cited in [5]), value chain tools of analysis are to be used in investigating business activities in terms of new value-adding opportunities when relating to existing values that involve the sourcing of factors of inputs, production, processing, and delivery of the finished products. For Hartwich et al. [6], the potential for the development of agricultural value chains both from the supply and demand perspectives bound, substantial and promising, in Africa. Value chain development has become a reliable tool for stimulating sustainable agricultural investments. An agro-value chain consists of a series of activities that add value to a final product; these include raw material production, processing, getting the final product, marketing, sale to the end-user or consumer, and after-waste disposal.

The Oil palm value chain cuts across West Africa. The production of Oil palm is found predominantly in West Africa; particularly in the Tropical region. Value addition is determined by various factors-the bulkiness of the product, availability of labor, and the various inputs and resources which include costs of transport and distribution, the markets, and consumers. Location specificity is also a minor determinant of the value chain. Hence, while oil palm production and primary processing take place in the West African region, the bulk of the secondary processing, as well as the markets and end users of palm oil products are outside the region.

4. Palm oil production in Africa

Palm oil production involves a series of activities starting with the production of fruits from palm trees, the harvesting of the fruits, and then the processing of the fruits. In Africa, there are two main palm production systems, the wild grove, and the planted farms, about 80% of the total fruit for processing is produced by the wild grove. The long-term productivity and competitiveness of the palm oil industry are highly determined by the varieties under production.

In Africa, no part of the oil palm is considered waste. After the oil has been extracted, the next is called palm kernel cake and is useful in feeding livestock. The leaves of oil palm are put to various use- for making brooms, baskets, mats, and for roofing, and thatching. The thicker leaf stalks are used for walls of village huts. The bark of the palm frond is peeled and woven into baskets [7]. The tree itself can be split and used as supporting frames in buildings. A sap tapped from the flower is processed into a drink called palm wine, which is a rich source of yeast. The palm wine can be allowed to ferment and then distilled into a gin known as “Akpetesin” in Ghana and “Ogogoro” in Nigeria [8]. The empty fruit bunch, the shell, and fiber that remain after oil extraction are used for mulching, manuring, and as fuel [9]. Oil palm is also an essential food item. About 90 percent of the palm oil produced ends up in food products, while the remaining 10 percent is used for industrial production.

As the world’s population increases and standards of living rises, the demand for oil palm is growing fast and this is attributed to its numerous uses. Production of palm oil is more sustainable than other vegetable oils. It consumes considerably less energy in production, uses less land, and generates more oil per hectare than other leading vegetable oils like soybeans [10]. Despite this, environmental groups are lobbying against the production and consumption of palm oil, and the EU Renewable Energy Directive restricts the availability of palm oil.

The campaign is based on contentions that palm oil damages the environment and threatens endangered species, such as the orangutan [11, 12], and is part of a broader, long-standing effort by the Green NGO movement to advance their goal of stopping forestry in tropical regions. European rapeseed producers have folded a protectionist strategy to restrict the use and imports of palm oil into this campaign [13]. These actions fall under a broader protectionist campaign that seeks to hinder the development of agriculture industries in developing nations and the resulting exports to developed nations by curtailing the conversion of forest land. The fallout of this campaign is the suspension of lending to palm oil companies by the International Finance Corporation (IFC), an arm of the World Bank. Beyond this campaign and the suspension of lending to palm oil companies, there is the need to assess the legitimacy or otherwise of the campaign particularly in Nigeria as well as examine the overall impact of the campaign in Africa.

5. Palm oil tree varieties in Africa

In West Africa, three varieties of oil palm trees are available. These are; Dura, Pisifera, and Tenera. Dura is the female breed, Pisifera is the male breed, and Tenera is a crossbreed of Dura and Pisifera. The Tenera is referred to as the highbred and is preferred among palm oil farmers in Africa. In Nigeria, Tenera seedlings are produced by the Nigerian Institute for Oil Palm Research (NIFOR) and are commonly referred to as extension work seeds (EWS). The characteristics of the three varieties of oil palm fruits from these trees are discussed in Table 1.

DURA	PISIFERA	TENERA
Thick	shell	less Thin
Viable embryo	Unviable embryo if present seed sterile	Viable embryo
Large kernel	Very small kernels and sometimes no kernel in most fruits	Good size kernel
Contains very small-quality oil	The oil content of the fruit is the highest among the three fruit forms
Unimproved	Unimproved	Improved

Table 1.

The characteristics of the three fruit varieties of the oil palm.

Source: NIFOR Oil Palm Production Manual.

In terms of comparison, the fruit of the Tenera variety contains 25% oil, by weight, and the Dura variety 18%, so the same amount of Tenera can yield 30% more oil than the equivalent fruit of the Dura.

The productions of palm oil in Africa are in two broad systems:

1. The Traditional System

Palm plants create a useful landscape in the traditional system. Natural palm groves are frequently the outcome of extensive resource management, when forest areas have been cleared for use in other agricultural activities, leaving a number of uniformly spaced palm trees that support a variety of production methods.

Additionally, as part of agroforestry systems, palm trees are planted as a family or communal stands. The collection of palm fruits is the first step in this technique, which is frequently followed by manual processing or the use of manually powered mechanical pressing devices to produce red palm oil. The sap from trees, both standing and chopped down, is collected to make palm wine, while the palm kernels are manually processed into soap or other items.

According to PIND [3], the traditional system still has most of the palm fruits from the wild groves, which are harvested by individuals and then sold for processing. The wild trees are of the Dura variety, very old, and have a very low yield (less than 1.5 tons of FFB/ha). Most trees are owned by someone other than the person who harvests the trees. Production practices are rudimentary with no application of fertilizers and limited weeding. Added to this, the traditional processing methods in use by the processors are mostly artisanal, using mortar and pestles, with a production capacity of 20 liters a day, yielding extraction rates of 9% (less than half of the oil content of the Dura fruit).

1. The Industrial System

The industrial system is a worldwide system based on monoculture plantations, where the land exclusively yields palm fruits for the industry. The system is essentially the same in both the colonial and post-colonial models, notwithstanding certain variations. Most often, if not always, local communities have had their land taken away with little to no compensation; biodiverse ecosystems (mostly forests) have been destroyed and replaced with vast expanses of palm monocultures; and working conditions, which were slave or forced labor during colonial times, have now nearly returned to slavery or low-paid labor in the modern system. The current system is worse than the previous one in two ways: substantial land drainage and widespread pesticide usage, both of which have an adverse effect on nearby water supplies. Africa endured some of this.

However, this most highly-demanded agricultural product is not without its challenges and limitations. Among them is the issue of deforestation, habitat destruction, and exploited workers. Also, the argument that palm oil is unsustainable is another twist to the challenges of this highly-rated product. But how true are all these limitations relative to the benefit of the product? There is a need to have the whole story. One quick way to sustainability is by helping to reduce its environmental impact through information, advocating for change, and choosing sustainably farmed palm oil.

6. The real fact of palm oil and deforestation

Palm oil stands as the world’s highest-yielding oil crop with output 5–10 times higher per hectare than other leading vegetable oil crops [14]. Industrial palm oil plantations have caused 47% of deforestation to so many countries in Africa since the year 2000. According to to Hans [15], 877,000 acres of land have been lost yearly to the plantation with the Indonesian moratorium on oil palm plantations and Malaysia wanting to maintain the current level. However, the drive to supply the expanding demand for palm oil has moved to Africa [15]. On account of the growing demand for palm oil, its production may not be avoidable; however, there are serious concerns about its sustainability (National Geographic) and ethical issues that accompany its production by Transnational Corporations (TNC).

Having explained palm oil production in Africa, the second phase of the work will take a look at some of the key concepts of this work as well as give some practical examples and finally make some policy recommendations.

7. Ethics

Once one talks about ethics, she is entering the difficult terrain of moral judgment. It is difficult because there is no universally accepted standard of measurement for it. It is an accepted principle in business organizations. It is believed that every human being carries a moral gauge in his/her heart but how that moral gauge functions would be a matter for elaboration by the ethicists. The Oxford dictionary [16], defines ethics as the “moral principles that govern a person’s behavior or the conducting of an activity”. That is to say, it is the moral correctness of specified conduct. It means that the way a business is conducted can be judged ethically right or wrong. In light of the above definition, it becomes important to evaluate some of the conducts in processing palm oil production in Africa to highlight some of the ethical issues involved.

It is not sufficient to grow a business, the processes leading to the growth of the business need to be ethically sound. In other words, there is a need for ethical congruence between the growth of the business and the entire processes that led to the growth. If a stage in the process is not ethically bankrupt, the other segments of the process emanating from this stage would have been contaminated by this deficiency. It is a way of saying that the end does not justify the means.

The production of palm oil begins with the large-scale acquisition of land to raise oil palm plantations. Often the process of acquiring the land is littered with corruption involving the African local government (national &regional) and the Transnational Corporations (TNCs). They connive with each other to dispossess poor rural families and communities of their land even against the national laws or manipulate them to suit their interests. The lands are acquired most of the time without the consent of the families, adequate compensation or none at all, displacement of families without resettlements, destruction of their local food and cash crops, medicinal plants and forest foods, loss of farm lands, destruction of other sources of livelihood and sacred places.

These ethical issues are common among oil palm plantations in Africa; however, a classical case is published in the report of the reputable Civil Society, FIAN [17]. They highlighted the ethical issues associated with the process through which a European Transnational corporation (TNC) SOCFIN acquired large scale of land in the Malen Kingdom in Southern Sierra Leone. Since the acquisition of the land, there have been endless conflicts between the communities and the government security agents which have led to the loss of human lives. What makes this case example classical is that the government of Sierra Leone in a bid to resolve the unending conflict between the host communities and SOCFIN set up a committee to investigate the remote causes of the conflict. The report of the technical committee [18] was quite revealing. It did not only confirm the ethical issues that FIAN has already raised in the original report but it exposed the level of ethical bankruptcy with which some of the TNCs conduct their businesses in Africa. Large-scale investments in land are preceded by social impact analyses and adequate safeguards are put in place to mitigate them in Europe. However, one wonders why the same TNC that conducts in Europe with high ethical standards in Europe would cut corners to avoid the social impact assessment and mitigation plans while conducting business in Africa. It raises a very big question about the ethical integrity of the TNC.

According to the report and the analysis of FIAN, the labor abuses in the plantation are huge. The laborers work for as much as 10 hrs a day for a wage of not more than the equivalent of £10 in the local currency. Even with that, there is no job security for them. There are no forms of insurance for them. When there are accidents, they get first aid and if the person requires hospitalization, he/she pays for the bill. If he takes time to return to work, he loses his job. If there is a disability during the course of work, there is no entitlement to compensation.

Apart from that, the chemicals used on the palms pollute the air and water without protection for the host communities. These create health challenges for the host communities and their neighbors. The laborers who spray these chemicals do not have protective gear and they are exposed more to the toxic effects of the chemicals.

Due to the complaints of ethical misconduct of these palm oil TNCs, they have evolved a voluntary certification process known as Roundtable on Sustainable Palm Oil (RSPO). It claims to have developed a set of environmental and social criteria which companies must comply with in order to produce certified sustainable palm oil (RSPO). However, the RSPO has some ethical questions about it. First, it is voluntary, founded, and funded by the TNCs themselves, therefore the integrity of the certification process is questionable. Secondly, in Nigeria for instance, the RSPO office is located in the facility of the TNC SIAT. Therefore, the RSPO has no autonomy and raises a new question on the integrity of the process. It is a situation of being both accused and the arbitrator at the same time and it remains to be seen how an ethically sound certification can be conducted in this type of arrangement.

A recurrent decimal that needs more explanation and understanding is the issue of consent because it is at the heart of the conflict between host communities and government security agencies in the process of large-scale land acquisition. Investments in African rural communities involving the large-scale acquisition of land require prior and free informed consent of the communities in accordance with existing international and national African pieces of legislation. However, it is not so much as the actors are not informed about this legislation as their decision to evade them. What is given to the communities is information that the said lands have been acquired for development in the name of consultation. What else could be worse ethical misconduct than intentionally evading the process of eliciting the consent of families and communities to dispose of their natural wealth willingly?

Under normal situations, the consultation process will need to give the opportunity for a YES or NO as possible outcomes. It means that in as much as the communities reserve the right to dispose of their natural wealth and resources freely; they equally reserve the Right to choose otherwise. The challenge to the investment actors and their agents in the consultation process is the disposition to accept a NO from the community as a possible outcome and remain respectful of the Right of the community to make their choice. The decision of the communities/families to say No to the acquisition of their land for investment should not be understood as a rejection of the development project but a YES to a deeper and more valuable need. It could be an emotional attachment to ancestral land, a more secure source of livelihood, or values beyond economics, but the inability to respect their decisions and seek for ways of circumventing them are grave ethical misconducts. In other words, both the Right of the community to dispose of their natural wealth and the Right to say NO are both sides of the same coin of free and informed consent, otherwise it is coercion. As Immanuel Kant, a Prussian-German philosopher postulated in Britannica on human freedom, only choices unadulterated by pressures from within (driven by desires) or coercion from without, i.e. embedded in moral autonomy, confer dignity on the community. All other choices are not free but Heteronomous.

Human persons are only truly free when they can express themselves from the designs in the deep recesses of their hearts. This inalienable freedom is the compass of human dignity and the true expression of universal human rights in each human being, its violation is the height of ethical misconduct. In practice, this may mean a rejection of any oil plantation, even when it comes with an avalanche of goodwill on the side of the investors.

8. Sustainability

Sustainability is understood as the ability of a system to exist constantly at a cost in a universe that evolves toward a thermodynamic equilibrium.

In our context, the system refers to the ecosystem and it means that the rate at which the natural resource of the environment is removed or consumed must be equal to the rate at which it is replenished to achieve a balance in the ecosystem, otherwise the ecosystem will collapse and ecological problems are created for the inhabitants. Furthermore, the etymology of sustainability gives the deeper meaning of its implication for our context. According to Ashiem [19], “sustainability is defined as a requirement of our generation to manage the resource base such that the average quality of life that we ensure ourselves can potentially be shared by all future generations”. However, the turning of the word “sustainability” was done when it was applied to development in the report of the world commission on environment and development: Our common future popularly known as the Brundtland report 1987 defines sustainable development as that which meets the needs of the present without compromising the ability of the future generation to meet their own needs” [20].

The ethical emphasis of this etymological definition by Ashiem and Mitra [21] is the moral responsibility that we have to ensure that the quality of life of others and the future generation is not compromised because of the consumption pattern of a group of people in the present generation. It means that investments that negatively impact the quality of life of people are unsustainable and unethical. Firmly grounded in the elaborate definition of sustainability above, we now outline some of the sustainability concerns occasioned by large-scale land acquisitions of land for oil palm plantations in Africa.

1. There is a huge loss of forest cover otherwise known as deforestation arising from the clearing of large surfaces of land to make way for oil palm plantations. Associated with the clearing of large surfaces is the loss of biodiversity, medicinal plants that the rural communities depend on, and loss of forest food that has a huge toll on their food cultures and food systems. These heavily impact the quality of life of the communities and are therefore unsustainable.

2. In the process of securing large surfaces of land for industrial oil palm plantations, families are displaced and dislocated. This has led to urban migration and efforts to migrate through the dangerous Mediterranean Sea to Europe in search of non-existent greener pastures. It is an old story that many of them never set foot in the dreamland of prosperity.

3. Oil palm plantations are associated with the use of heavy quantities of pesticides and other agro-industrial chemicals. These chemicals pollute the air, surface, and underground waters on which communities depend for their livelihoods and these compromise their health and the quality of their life. It is in the public domain that industrial agriculture is one of the big contributors to climate change. Presently, Africa is at the worst risk of the current climate crisis.

4. Large surface of the land for oil palm plantations reduces the arable land available for food production and thus puts the food security and local economies at risk. It is important to recognize here that African farmers are mostly family holder farmers and women are at the forefront of it. The scarcity of land for local food production leads to a dramatic increase in food prices. This decreases the quality of life of the women who carry the burden of the African social system.

5. A common factor in the acquisition of large surfaces of land in Africa is that the affected families and communities seldom receive compensation for their land and when they receive it at all, it is not adequate. Furthermore, they barely get employment in those palm plantations; when they receive, there is no job security and the wages are not living wages. But more importantly, they have betrayed the future generation of their families because they did not protect the land for them. This makes the affected families live with burdens of guilt perpetually.

9. Conclusion

Ethics and sustainability are both sides of the same coin for determining who is at the centre of a business enterprise. The flip side of an ethical question is a sustainability question. Ethical questions are values and moral principles which guide business decisions; sustainability questions are the outcomes of those business choices. We, therefore, see in the decisions through the processes of the investment, the values, and the moral principles that guide the business enterprise. Ethics and sustainability serve as quality control mechanisms in the business enterprise. It shows practically who is at the centre of the business and the ethos and values of the business owners.

Businesses are created to serve human needs and make a profit for the owners. The human needs served by the business are not only those who buy their products but include all those who make contributions to the business through their entire supply chain. As stated earlier, if there are ethical and sustainability deficiencies at any stage of their supply chain, that bankruptcy has contaminated the remaining part of the process. Many business enterprises circumvent established ethical standards because they want to maximize profit. In the case of oil palm plantations for the production of palm oil, it is primarily the sustainability of the families and communities that were impacted by the large-scale acquisition of land and their future generations. The quest to grow a business and make more profit should always be balanced by the same quest for ethics and sustainability.

10. Policy recommendations

In other to remedy some of these ethical and sustainability questions in the palm oils supply chain, it will be helpful to make the following policy recommendations:

1. European countries should put in place mechanisms that will ensure that European corporations producing palm oil in Africa for the European market use similar ethical standards that guide their operations in Europe. It is a sign of ethical bankruptcy to exploit the weak African democratic institutions to enrich themselves. It is both unethical as well as unsustainable to pay an employee in the palm plantation the equivalent of £10 in the local currency for 10 hrs of hard labour on the palm plantation when that could be the minimum per hour pay for a similar job in Europe.

2. Militarisation of the oil palm plantation is a sign that there is disharmony between the business owners and the host communities. Building good public relations and corporate social responsibility are very crucial business ethics in rural communities as businesses do not thrive in a hostile environment. In the same vein, the divide-and-rule system of community relations is unproductive. It seeks out opinion leaders in the host communities to buy them over. Such behavior destroys the social cohesion of the communities and the backlash is usually unprecedented for the business. Besides, the company’s budget for the militarisation of the oil palm plantation and their divide-and-rule game of community relations will be sufficient to improve their corporate social responsibility to the host communities. Commensurate compensation for the land will endear the business owners to the heart of the host communities.

3. It is important that the corporations using palm oil endeavor to do the due diligence of their entire supply to ensure that the product that they are using is produced in a sustainable way as well as devoid of ethical misconduct. Undertaking this process diligently will be the hallmark of ethical conduct in business.