The devil in the detail of deforestation data

There was, it seemed, good news emerging from one of the planet’s most important ecosystems: the Indonesian rainforest. Home to 10% of the world’s plant species, it is the world’s third-largest rainforest. And serious deforestation trends in recent decades were apparently reversing, with over-all deforestation rates falling in 2020 to the lowest rates since monitoring began in 1990. 

The country still lost 115, 459 hectares of forest last year, but that represents a 75% fall in deforestation on 2019, according to the Indonesian ministry of environment and forestry. Data from Global Forest Watch suggests this positive downward trajectory began in 2017.

The Indonesian government is taking credit for its latest tree loss numbers, pointing to a range of policies it has implemented to protect its forests. It has stopped issuing new permits to clear primary forests and peatlands and there has been a moratorium on new oil palm plantation licenses. Social forestry programmes, land rehabilitation and more stringent environmental protection laws have all played their part too. 

The result could also be attributed to falling palm oil prices and declining plantation expansion across the country. According to a recent study, a 1% price decline has led to a 1.08% decrease in new plantations and a 0.68% decrease in forest loss.

However, while the data points – all of which are publicly available – cannot lie, such positive headlines could be hiding a less encouraging reality. Yes, deforestation is slowing on many of the big Indonesian islands, such as Sumatra and Kalimantan, but tree loss seems to be shifting to other important areas. 

Take Papua, for example, a region that is home to 20,000 plant species and a forest considered to be among the world’s most biodiverse. An Indonesian NGO coalition says that Papua lost 660,000 hectares of forest since 2000, and 71% of this occurred between 2011 and 2019. Now, 1.1m hectares of forest has been earmarked for conversion to palm oil plantations. The decision to grant new licences to palm oil producers, which the government has since denied, could spell disaster for the region. 

So, while the overall picture may be positive, an analysis of the deforestation data is much less encouraging. 

 Hot spots

Sophisticated Earth monitoring systems are helping to identify and measure areas of deforestation and, as the systems evolve, they are becoming more and more capable of capturing deforestation as it is occurring rather than after the fact. 

GeoRSPO, an interactive mapping platform displaying the concession maps of all RSPO grower members, is helping to boost the transparency of the palm oil sector. Using satellite technology, the organisation is actively monitoring all detected fire hotspots within concessions owned by RSPO members, certified and non-certified in Malaysia and Indonesia. 

Inke van der Sluijs, RSPO’s director of market transformation, says that “this kind of technological innovation makes it easier to find and observe precise locations and ground-truth data”. Where a hotspot has been detected, the RSPO monitoring unit actively follows up with each member to verify whether there is an occurrence of fire and, if so, what efforts are being made to extinguish the fire.

But while the use of the technology is largely positive, understanding the full picture remains challenging, says Samantha Morrissey, the Rainforest Alliance’s lead on forest products. For her, the decline of forest loss in Indonesia is good news, but protecting the remaining forests and restoring degraded areas is now crucial. 

She says that the main challenge is around forest degradation, or in other words, “death by a thousand cuts”. The forest canopy may remain more-or-less intact, but within the forest there is a progression of damage to the ecosystem and loss of biodiversity until the forest is no longer able to function. “Degradation is the gateway to deforestation.”

So, what can be done to prevent so-called leakage, which occurs when the focus on a certain project area leads to unintentional negative impacts outside of the project area, thus compromising the overall positive impact made? Morrissey believes that landscape level initiatives are the answer, enabling all relevant actors and stakeholders to work together towards their common goal. 

Preventing leakage is also about improving the environmental and social conditions of those on the ground, she says. “If you can support local communities to build strong livelihoods based on implementing sustainable management practices, we begin addressing and solving the interconnected drivers of forest degradation and deforestation.”

It is an approach long advocated by RSPO, which encourages collaboration across agricultural-commodity industries, supply chains, and with governments and NGOs. As of March 2021, its members had identified and are managing around 275,656 hectares of high conservation value areas within their certified concessions. “A key part of this achievement is working through national and local participatory processes with governments, communities and other key stakeholders,” says van der Sluijs.

Global food giant Nestlé has committed to ensuring 100% of the agricultural commodities it uses in its products are deforestation-free by no later than 2022. 

To track progress in reaching a fully-verified deforestation-free palm oil supply chain, the business created a palm oil transparency dashboard. Much of the information is based on data gathered through Starling, a satellite-based system Nestlé uses to monitor its entire palm oil supply chain. It has been using the system since 2017, and now has a better understanding of deforestation patterns in palm oil producing areas, including where deforestation occurs, what are the key drivers and who is involved. “Deforestation frontiers are dynamic,” says Emma Keller, head of sustainability for Nestlé in the UK and Ireland. “Looking at the geographical location of Starling alerts, we’re seeing areas where there has been significant increase in deforestation over the past few years.” 

Starling allows Nestlé to identify the trends as they happen and to act quickly. This complements analyses looking at a range of factors, including mill commitments to no deforestation, no peat, no exploitation (NDPE) policies, relevant legislation and development of new infrastructure, such as roads and processing facilities.

Yet despite all of this newly available insight and data, deforestationis still occurring inpalm oil producing regions where Nestlé sources, Kelleradmits. In 2019, there were 388,047 Starling alerts globally for deforestation within 50 kilometres of mills from which the company sources, representing 472,513 hectares of forest loss.

However, the picture is not black and white. A Starling alert does not mean that deforestation was carried out by one of Nestlé’s suppliers or by the palm oil industry in general. And this is why it’s so important for companies to properly engage with their suppliers to investigate. As Keller adds, it’s tricky to verify deforestation events, especially in getting access to full sourcing boundaries and traceability to plantation for all the mills in the company’s supply chain.

The situation is even more challenging because deforestation increasingly occurs in small-scale patches. According to Keller, since January 2016, 57% of total forest loss in palm oil producing countries has been caused by clearance events of less than five-hectares at a time. 

This is indicative of an increase in deforestation led by small-scale farming for palm oil cultivation, as well as a decrease in deforestation led by large-scale plantation companies, she says. “We have seen through our work to date that the strategies for large scale clearance in the past do not successfully translate to the small-scale clearance of the future.”

Another route to achieving no-deforestation commitments is through increased disclosure. According to the latest CDP figures, many more companies are disclosing their deforestation impacts. However, just four companies – Essity, L’Oréal, Mars and Tetra Pak – have been identified as following ‘best practice’ when it comes to leadership on the issue. 

While the RSPO’s van der Sluijs agrees with CDP’s assessment that an increase in disclosure and company action is a step in the right direction, she says it is not enough to end deforestation. She points out that companies perform better at operational monitoring, such as collecting data on ecological outcomes of management activities, than on strategic monitoring. “This tells us that companies need to focus on developing similar roadmaps to protect forests, but also take into consideration a wider range of factors, including remoteness of site, potential cost of development, and baseline condition of communities.”

David Pendlington, global sustainable sourcing director at Mars Wrigley, agrees, saying that disclosure is only meaningful if all stakeholders can work on a collective action both in landscapes and across the entire sector. “Collaboration on the ground with trusted stakeholders is critical to creating a path for successful, sustainable smallholder farming and natural resource management,” he says, pointing to the company’s recent five-year research project with the International Fund for Agricultural Development and the World Agroforestry. The partnership will find ways to support small scale cocoa and palm oil producers in supplying sustainable products to global markets.

So, with deforestation numbers in flux, what are the best things companies can do right now to ensure they, and their products, are not responsible for ongoing deforestation in the world? 

Increased traceability and certification are “critical steps”, Pendlington says. But these actions alone are not sufficient to achieve the end goal of eliminating supply chain-driven deforestation.

At the end of the day, the actions necessary have a ‘more of the same’ feel – there are no quick fixes. As Pendlington adds, companies must increase transparency, engage suppliers and other stakeholders “to deploy sufficient monitoring and verification of their supply chains to ensure that deforestation is not occurring. They must also put in place plans for addressing and rectifying situations wh