Into the Light

Into the Light

Transparency and the vulnerability it creates will save lives and supercharge our fight against climate change

Last Friday I had an SMS exchange with Wilmar’s Chief Sustainability Officer, Jeremy Goon. Jeremy was in Davos preparing his presentation for the forests session. I was reflecting on the Wilmar Transparency Dashboard announcement we had made the day earlier.

“Did I tell you I think this is a revolution?” I asked Jeremy.

“You may have mentioned it a dozen times on your Twitter feed, yes.” he responded.

“Got excited.” I said.

And it’s true; I had gotten excited. In a world of unhappy news about climate change, species extinction and all sorts of human rights abuses, a little drop of good news is welcome. Against all those horrors, a Transparency Dashboard doesn’t sound that impressive but I got excited because I believe that the push for true transparency that it represents really will save lives and give a huge boost to our efforts to fight climate change.

How so?

Commodity traders don’t have a strong history of sharing their supplier lists; it’s not in their DNA. Ever since the dawn of time when humans started trading things, traders have aggressively guarded the identity of their suppliers. If your customers know your suppliers, they might go direct, cutting you out of business. Worse, if your competitors know, they might offer your suppliers a better deal, stealing your supply and taking your customers; a death knell.

Traders have real and bitter experience of this so they never trust anyone with such sensitive information. Black hole-like opacity is their tool to keep everything hidden. As environmental and social concerns have climbed customers’ and consumers’ agendas, letting people know your suppliers risks criticism if the suppliers are engaged in poor practice. Hard-hitting NGO exposés have only driven traders further into the shadows.

What then were Wilmar thinking to publicly share the list of 806 mills that supply their facilities in Indonesia and Malaysia? Have they gone mad?

On December 5th, 2013, Wilmar announced No Deforestation, No Exploitation and No Peatland development policies, its first revolution. There was positive feedback from most stakeholders though NGOs were right to note that the proof of the company’s intent will be in the implementation. What would Wilmar do to address the issues throughout its supply base? You can’t know what and where the issues are unless you know where you buy and given the nature of the industry, it’s not unusual for companies to not know where all their palm oil comes from. Wilmar was no different so in 2014, the company mapped out its supply base, meeting hundreds of suppliers and other stakeholders to hear their views and to raise understanding of why the policies are important.

Likewise, you can’t convince stakeholders of your serious intent unless you’re transparent about your implementation progress but no one can fathom your progress unless they know your total supply base. “We’ve solved the problems in three suppliers!” is a great achievement if you’ve only got five in total – you’re 60% there! It’s less impressive if you have twenty and risks being embarrassing if you have hundreds. How do we judge if we don’t know the total?

Wilmar’s Transparency Dashboard lists its total SE Asian supply base. All Wilmar’s policies and updates of its implementation progress are posted there too. There is a Grievance Process and Grievance list. Few folk disrobe in public so totally without some reservation. It makes you vulnerable, very vulnerable. People can see everything, all the imperfections, the spots and blemishes. With new tools like Global Forest Watch, anyone in the world can now look in the area surrounding the mills to spot and report to customers, to the media, where deforestation is happening. NGOs can visit the plantations surrounding the mills to see if there are exploitation or peatland clearance issues. Wilmar might just have opened itself to a tsunami of grievances.

And that right there is the revolution. Wilmar just made itself vulnerable yet, from vulnerability springs trust. When speaking to a journalist about the Dashboard, I was asked, “How can we trust you? You’re paid by the company”. The beauty of the Transparency Dashboard is that no one needs to trust anyone, certainly not TFT. Wilmar has opened itself to worldwide scrutiny; it really is taking its clothes off in public. The beauty and counterintuitive magic of the Dashboard is that you don’t need to trust anyone but because of that, trust will emerge. It might not come immediately, but over time, if people see Wilmar responding responsibly to issues, they will start to believe the company really is serious. More importantly, NGOs, communities, stakeholders raising issues based on what they learn through the Dashboard become partners in the change process. Yes, they might still attack the company and lambast it in the media but how will they feel when the company responds and closes out their issue? When they see real change happening on the ground? They’ll for sure feel that they’ve been listened to and from that springs trust, respect, hope even. This is already happening. NGOs raised red flags around certain suppliers in 2014. Wilmar engaged to address these hot spots with quite some positive results; not everywhere, some NGOs remain concerned in some places but NGOs did witness Wilmar’s real engagement and gave the company positive feedback. This is a real breakthrough.

What might we achieve with this emerging, fragile trust? Already we have NGOs coming to Wilmar saying, “here, I’ve found this, you need to check this supplier.” Wilmar is engaging, helping its suppliers move forward, away from egregious practices. The change process is accelerating as people take a chance to believe that collaborating just might work. People are coming into the middle ground; they’re laying down their swords. What might we achieve when (it’s not a question of “if”) other traders join in on this transparency? Might we see a real acceleration, a supercharging of the implementation of No Deforestation, No Exploitation and No Peatland policies, in our fight against climate change?

Beyond this, customers will quickly react. Consumers increasingly want to know the origin and footprint of the ingredients in their products and are asking brands to tell them. We can expect that the next step in this transparency revolution will be for brands to publicly list where they buy ingredients. There is no barrier now.

And if they can now do it for palm oil, why not for soy, beef, sugar, rubber, cocoa, all other agricultural commodities? What about textiles? Might the Rana Plaza factory collapse have been prevented had someone known and understood the risks to the workers? No one knew because of opacity. Transparency can save lives.

Wilmar’s step into the light really is a revolution. If Wilmar can do it, everyone else must too. Wilmar is not some itsy-bitsy niche company - they’re the world’s largest palm oil company for goodness sakes. We can expect transparency to be the new order in the years ahead and it started last week with Wilmar’s announcement. Transparency will help everyone to better engage, to better understand and to better bring about change because when you hide stuff, bad things can happen in the shadows. The spotlight is shining now on one of the world’s major supply chains. It’s time to lift the veil sheltering bad practice in each and every single product we use. As consumers, we must demand that this light be shone into every dark corner of every supply chain for every product. If Wilmar can do it, everyone can do it.

No wonder I got excited.

Mick

Mick

What next for Palm Oil in 2015?

What next for Palm Oil in 2015?