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Standing Committee on Economics
19/08/2011

GILDING, Mr Tony, Joint Founder, Palm Oil Action Group

[13:15]

CHAIR: I welcome Mr Tony Gilding. I just need to remind you that, although the committee does not require you to give evidence under oath, the hearings are legal proceedings of the parliament and warrant the same respect as proceedings of the House or the Senate. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. Thank you for making yourself available today. Do you have an opening statement that you wish to make before we go to questions?

Mr Gilding : Yes, I do. I have one that is approximately four or five minutes long and then I hope to take questions after that, it that is appropriate.

CHAIR: That sounds terrific; thank you.

Mr Gilding : Thank you very much for the opportunity to speak in front of this inquiry and thank you very much for the respect that you are showing the Australian people by having an inquiry about this important matter. Perhaps I can just give my helicopter view or perspective on the various stakeholders in this matter. I represent an NGO viewpoint. I am very close to a lot of the people that you would have spoken to today and, with respect, I would say that they are all acting from a very strong values foundation and that they probably have the deepest experience of what is actually happening on the ground in Indonesia and Malaysia. I would think that all of these people have spent many hours on the ground and, therefore, would have a very deep perspective of the impact of the deforestation and the impact on the wildlife and the diversity. Of course, Dr Colin Groves, whom you saw a written submission from, is a worldwide renowned expert in this area. His view is widely respected throughout the animal kingdom, as well as the academic kingdom.

In addition to that, the NGOs have close associations at grassroots with their constituents or members, supporters, and I think the NGO view does, in large part, represent the viewpoint of the 160,000 people who have signed various petitions on this matter. But also we are on the streets day today in our campaigns, in our actions and in our blogs, talking to people. This is an issue that really, really does matter to a lot of people and it matters very deeply, because it goes to the heart of having a choice about what you put in your mouth and about what you eat. That is something which is very deeply felt at the gut level by many of our supporters and, I suggest, a larger and broader group.

Without trying to diminish their evidence, the other bodies, I think, roughly fall into three groups. We are talking about industry bodies and, of course, their job is to protect the commercial industry with its commercial interests. Strangely, however, some, in my view, feel that hiding the ingredients from their consumers is somehow in the interests of consumers. They seem to argue, in a rather condescending way, that it is in the interests of consumers to confuse them, and that does seem to be somewhat disrespectful. I also note the industry body group World Growth, who always put in a submission on this sort of matter. I am not sure of their background. I have endeavoured to find out. Whilst they claim they are a no-profit organisation, they would appear to be lobbyists for at least some of the manufacturers in the palm oil industry and certainly some of the Malaysian government departments.

The third interest group would be the overseas government agencies that have made representations. I have noted their recent trips and comments. The overarching point is that it does seem to me that their somewhat confused argument is that there is no relationship between deforestation and palm oil; but at the same time they argue that their industries would be decimated if the consumer had the right to choose. I think that is a somewhat short-term solution to their problem. I would have thought that the long-term solution for them would be to insist that it was properly labelled, to insist that it was properly certified and then to sell the health benefits or the other benefits to consumers. While you are holding information back from a consumer, that consumer will eventually treat you with disdain. So I would urge the overseas government agencies to take a longer term view, accept the fact that Australians do like to know what they are eating and then to argue the benefits of sustainable palm oil and the health benefits of palm oil, of which there are of course some.

The last category that I roughly broke this into was the government departments and agencies who argue that the legislation is not perfect. They are absolutely right: this legislation is not perfect. No legislation is perfect, but I would argue that this legislation is very important and it is very urgent.

As a simple exercise, I would encourage the committee to go home tonight and to take 10 or so supermarket foods—biscuits, cereal products—from the pantry, put them on the table and ask their assembled family if they can tell you which ones contain palm oil. Explain to them your view on the link between palm oil and deforestation—and that view will vary depending on your knowledge, experience and personal viewpoints on it—and then ask the assembled kids, grandkids, cousins, nieces or nephews for their view on the current parliament's opportunity to give the consumer the right to choose. In other words, ask them: 'Would you prefer that you knew whether this product contained palm oil or not? Would you think that is your right as an Australian citizen? Given that you are consuming 10 to 12 kilos of palm oil, would you like to have the opportunity to know which products on that table or in your pantry contain palm oil?' I would think you would get an overwhelming majority of people in that group agreeing, 'Yes, it is important that we know what we eat and that we know we have the right to choose.' I think that is really what the argument boils down to in the end—the right of a consumer to choose. Everybody that I have met, regardless of their view on many other aspects, does agree that it is an important principle.

As our representatives, if you choose—and I urge you to—to enshrine that consumer right in legislation, I am totally confident that the industry and the producing countries can focus their efforts on sourcing sustainable palm oil and they can therefore protect vital biodiverse habitat; and future generations will thank you for showing that vision.

Lastly—this is off the top of my head and I do not really have a deep knowledge of legislation—I do know that the Labelling logic inquiry has recommended compulsory labelling of palm oil, and that is going through its process. But that is one of 50 or 60 recommendations of the Labelling logic report, and it could very well be that the palm oil one gets traded or locked down in some way, shape or form. I was thinking that maybe this legislation could have a sunset clause to say that, when it is decided by FSANZ to include labelling of palm oil, this bill lapses, because it will no longer be necessary. In that case, that would really obviate or counter the arguments made by a lot of the people who are arguing that it is not perfect legislation.

The risk of doing nothing now, though, and leaving it to FSANZ is that that is a massively complicated process with the federal and state governments and New Zealand et cetera. The moral imperative that we are facing now to give Australian consumers the right to know what the impact of their food is will be lost, unless something is done; so I would urge you to act in a positive manner today.

Ms OWENS: I have said this a couple of times today: I am a consumer who does like to know what is in my food and I certainly would like to think the food that I was eating that did have palm oil—if I chose to go that way—had sustainable palm oil. I am just not sure that this bill does that for me and I just want to run some of the problems that I see as a consumer past you and see what you have to say about them. The bill actually is not enforceable, which means that the states do not have to go with it, and New Zealand has already said that it will not. So if I as a consumer pick up one packet of biscuits which says 'contains palm oil', I know that it contains palm oil. If I pick up another packet of biscuits that does not say 'contains palm oil', I do not know whether that packet of biscuits just comes from a state that has not accepted the changes or whether it does not contain palm oil. So, as a consumer, I am not sure that this bill actually gives me the information that I need. I might make choices to buy a packet of biscuits that does not say 'palm oil' on the label but that actually has palm oil in it. What is your response to that?

Mr Gilding : I am not an expert on legislation and I am not an expert on enforceability. There would obviously be a problem if there were not a perception that it should be enforceable. It would certainly be an advantage if it were enforceable, but I would prefer to have a bill that was a moral imperative, as shown by the Australian parliament, and then NGOs could argue that moral imperative and ask the food companies to label it and continue to campaign against those that did not. So it would go somewhere, but I would obviously prefer a solution that was enforceable.

Ms OWENS: Certainly, as a consumer, I would prefer not to have to do quite as much work as I would have to do, I think. The issue of sustainability, for me, is important too, in that, again, even if all the products had 'palm oil' on them, even if every state and New Zealand picked it up, I still would not be able to tell the difference between a product that used sustainable palm oil and one that did not, without doing the kind of research that I could do with or without the bill. What is your comment on that?

Mr Gilding : I understood that the products would be clearly labelled as 'certified sustainable palm oil' or not.

Ms OWENS: Not anymore. It was amended in the Senate, so it does not anymore; it just says 'palm oil'. That, for me, takes part of the point of it away.

Mr Gilding : Having 'palm oil' on it would be a definite advantage because then one could make inquiries. But if the company chose to label it as 'sustainable palm oil', they could. Many of those companies—and we are talking of the big companies here, such as Nestle—have already made a commitment to source sustainable palm oil. If they had to label it as palm oil, I would pretty much guarantee that they would make sure that they labelled it as 'certified sustainable palm oil'.

Ms OWENS: They could label it as 'certified sustainable palm oil' now, if they chose.

Mr Gilding : Yes; but they do not have to label it as 'palm oil'. So I would argue that their first preference would be not to label it; their second preference would be to label it with 'certified sustainable palm oil'; and their third preference would be to label it with 'palm oil'. I would guess that they would go down the route of labelling it as 'certified sustainable palm oil', if in fact there were a moral imperative for them to label it as 'palm oil' at all.

Ms OWENS: Are you familiar with what has happened in the UK and Europe on labelling?

Mr Gilding : Vaguely. I have read a fair bit about it, but I am not an expert on it.

Ms OWENS: As I understand it, they have the process whereby, if they list 'vegetable oil', they list the oils themselves; I think I am right.

Mr Gilding : Yes; that is my understanding.

Ms OWENS: 'Palm oil' and 'coconut oil', for example.

Mr Gilding : Exactly. Yes, that does sound like it to me. I think there is an argument to say that, if there is a large amount of any ingredient in any food product, we should know what it is—and, if you put the words 'vegetable oil' on a product and then planted a palm tree in their front yard and said, 'Is that a vegetable?' I would say that 98 per cent of people would say no; therefore, I believe that the current situation is misleading.

Ms OWENS: They think tomatoes are vegetables too.

Mr Gilding : Yes; most people look at a tomato and say, 'That's a vegetable.'

Ms OWENS: Again, on the labelling issue, as a consumer who cares about the health aspects of the oil, I would obviously prefer an unsaturated fat to a saturated fat like palm oil. But if the label only recognises palm oil and does not recognise, say, coconut oil, which is even worse than palm oil, the label might be misleading to me as a consumer who is trying to make choices on a health basis.

Mr Gilding : I think every label only shows what the manufacturer is required to label, unfortunately, except for a few manufacturers. I think having palm oil labelled is a step in the right direction. I think having coconut oil labelled would be good too. But, as we have said, this is not perfect legislation.

Ms OWENS: If you cannot get everything—

Mr Gilding : If we sit around and wait for perfect legislation, it could just be that the orangutans will all be gone before we work it out.

Ms OWENS: On that point—this is my last question—I would also like to think that, if I went to all the trouble of making sure that I was buying certified sustainable palm oil, that would actually lead to less deforestation. My question is: my understanding is that the land is logged anyway and then palm oil or some other crop is planted. Does moving towards sustainable palm oil or even reducing the use of palm oil actually stop the deforestation?

Mr Gilding : Yes, because there is a clause in the certification—and I think there will probably end up being a couple of different certification schemes. The one that we know at the moment is the RSPO certification scheme. But, importantly, it needs to be certified by an independent body and not by the RSPO themselves. This is one of the big problems—people are claiming that their palm oil is okay because they are members of the RSPO and, so far, the RSPO has expelled nobody. In direct answer to your question, one of the certification clauses says that the land must have been cleared and there is a sunset clause on the date, and it is about five or so years ago. So anything cleared prior to that date is okay; anything cleared after that date would not be able to be claimed as sustainable palm oil. So that issue is covered in the certification system.

Ms OWENS: In terms of palm oil, but the land could be—

Mr Gilding : No, in terms of the land clearance. The clause basically says that, if the land was cleared after a certain date, the palm oil grown on that land cannot be claimed as sustainable palm oil; if the land was cleared before that date, it can be. So it is a sunset clause. It has grandfathered the land that has already been cleared, because you cannot do anything about that. But it means that, going forward, you will not be able to clear land, plant palm oil on it and get certification for that palm oil.

Ms OWENS: Surely land would still be cleared and other crops would be planted?

Mr Gilding : Palm oil is one of the most profitable crops in the world, mainly because the true cost of the degradation of the environment is not costed into it. As a palm oil company, your first preference is to get some beautiful rainforest, chop down the trees and sell them for a massive price and then plant palm oil on that land. Your second choice, however, is to take already degraded land and plant palm oil on that. If you remove the option of taking the forest land, because you are not clearing any more forests or because it is not possible that that palm oil can be certified, the growers will be forced to move to the degraded land—and really the major objective of this bill and all of the labelling bills is to make transparent what people are doing and then they will move to the degraded land, which we are in favour of. We are not in favour of boycotting palm oil or of stopping palm oil production, but we are in favour of moving it from the recently deforested land to land which is already cleared and degraded—and there is a significant body of that land; there is more in Indonesia than in Malaysia, but there is a significant body of that land.

Ms OWENS: That raises an interesting point. So you are saying that there is an imperative at the moment in there so that, if a palm oil company had the choice between a bit of degraded land and a bit of rainforest, it would choose to go to the rainforest and not the degraded land now?

Mr Gilding : For economic reasons, yes, because they can chop down the trees and sell them for a terrific price, as the introduction to that bit of commerce; so they have a large amount of money in the bank to then go and plant the palm oil trees with.

Ms OWENS: So the logger and the palm oil plantation owner is the same person?

Mr Gilding : They would be the same. You basically get a concession to make the land into a palm oil plantation and your first step is to chop down the trees. But it is also possible to get a concession on degraded land or secondary or tertiary forest, which is a much stronger preference obviously than getting the concession to do it on rich, primary-growth rainforest.

Ms OWENS: Are there other crops like pulp paper or rubber that have the same business model?

Mr Gilding : Nowhere near as profitable, which is why there is so much palm oil and so little of all the other things. In fact, in Malaysia virtually all the rubber plantations have now been planted out as palm oil plantations and, no, the pulp paper industry is nowhere near as profitable at the moment as the palm oil industry.

CHAIR: Thank you, Mr Gilding, for your contribution. We are sorry for the delay in having you come on today.

Mr Gilding : Not at all; that was fine.

CHAIR: We really do appreciate you fitting in with us, too. Hansard have taken an audio recording of your evidence and they will send you a copy of the transcript for you to look at and correct, if there are any errors or omissions. Once again, on behalf of the committee, I thank you for your time and the contribution you made today.

Mr Gilding : My pleasure, and good luck in your deliberations.

Resolved:

That this committee authorises publication, including publication on the parliamentary database, of the proof transcript of the evidence given before it at public hearing this day.

CHAIR: I declare this public hearing closed.

Committee adjourned at 13:36