Greenpeace, Nestlé and the Palm Oil Controversy: Social Media Driving Change? (Abridged) |Human Resource|Organization Behavior|Case Study|Case Studies

Greenpeace, Nestlé and the Palm Oil Controversy: Social Media Driving Change? (Abridged)

            
 
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Case Details:

Case Code: HROB149
Case Length: 13 Pages
Period: 2010-2011
Organization: Nestlé SA, Greenpeace International
Pub Date: 2012
Teaching Note: Available
Countries: Europe,US,Global
Industry: Consumer Packaged Goods; Non-profit

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Palm Oil, Rainforests and Orangutans

Palm oil, derived from the pulp of the fruit of the palm tree, has a variety of uses ranging from food and consumer productsiv to cooking oils and fuel additives. It is used in a vast array of food and consumer products.

According to the World Wildlife Fund for Nature, palm oil is used in 50% of all packaged supermarket products. It is also becoming popular as a biofuel. The oil palm is an efficient crop and is relatively cheap. The rising demand resulted in pulling up its prices, which touched US$800 a tonne in 2010. Its production touched 46.9 million tonnes in 2010, up from 45.3 million in 2009, with most of the increase coming from Indonesia. Malaysia and Indonesia together supplied 90% of the world’s palm oil in 2010.

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Palm oil is Indonesia's most significant agricultural export – it was reported that in 2008, Indonesia exported nearly US$14.5 billion of palm oil related products. The principal area for palm oil production is Sumatra, which has nearly 80% of the total palm oil production.

However, the cultivation of palm oil has had several devastating consequences for the environment. Experts noted that from less than 2,000 square kilometers in 1967, the area under palm oil cultivation had expanded to more than 30,000 square kilometers by 2000. The United Nations Environment Program (UNEP) held that the spread of palm oil plantations was the greatest threat to the forests of Indonesia and Malaysia. According to Greenpeace, "Demand for palm oil has been increasing so much that the companies that sell it are levelling rainforests in Indonesia to make way for palm oil plantations. We need those rainforests... Indonesia (is) the third largest carbon emitter after the United States and China... Deforestation is actually responsible for...1/5 of total emissions...Deforestation is also trashing orang-utan habitat, pushing this already endangered species to the brink of extinction, and destroying the livelihoods of local people." According to the UNEP, oil palm production would wipe out 98% of Indonesia's remaining forests by 2022. The palm oil industry was also charged with land grabbing, since expansions were occurring in areas where communities had traditionally used forests but lacked the title to land.

Orangutans, a keystonev species, played an important part in forest regeneration. Moreover, the Sumatran orangutan had been classified as “Critically Endangered” by the International Union for Conservation of Nature (IUCN)vi...

Excerpts >


iv] The food-based uses of palm oil include use as cooking oil, as fats, shortening, margarine, spreads, confectionery fat, coffee creamer, and imitation dairy products. Its non food uses include in soaps, Fatty Acids, Methyl Esters, Fatty Alcohols, Glycerine and Expoxidised Palm oil.
v] A keystone species is one that has a disproportionate effect on its environment relative to its biomass.
vi] IUCN is the world's oldest and largest global environmental network.

 

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