Friends of the Earth Netherlands Milieudefensie says Neste also continues to buy palm oil from suppliers in Liberia with links to armed militias who extorted land from villagers to grow the lucrative crops.
According to Milieudefensie, the Finnish company buys 1.3 million tons of palm oil and a substance called PFAD – palm fatty acid distillate – every year to turn into biofuel.
With large profits to be made, and tax incentives from the government, Neste has become a global leader in producing biofuels using PFADs, a secondary product created in the production of palm oil, as ‘waste’ for the purposes of the biofuel industry.
Environmentalists have long raised concern about increasing the consumption of biofuel without addressing the issue of whether its component raw materials are themselves sustainable. PFADs are not allowed to be described as a waste product in most European country where PFAD-made biofuels are sold, with Finland one of the last hold-outs.
It’s not the first time Neste’s supply chain integrity, and its impact on the environment, has been criticised. In October 2019 a Norwegian NGO warned that Finland – and by extension Neste’s – biofuel policies, if left unchanged, will likely contribute to massive deforestation in countries like Indonesia, or in South America.
Meanwhile another 2019 report from a tech company that monitors natural resources found that there was widespread orangutan habitat destruction around mills in Indonesia where Neste sources some of its products; and an earlier investigation in January 2019 highlighted how Neste was still buying palm oil from mills caught in illegal rainforest harvest operations.
In the new report Milieudefensie also catalogues a litany of other environmental scandals associated with Neste and its operations.
Dutch NGO looks at Neste’s suppliers
In the latest investigation into Neste’s business practices and supply chain integrity, Milieudefensie looked at 18 companies that provide palm oil to Neste.
“These companies are responsible for deforestation, fires, land disputes and bribery” says the Dutch NGO which describes Neste as “a wolf in sheep’s clothing” when it comes to environmental issues.
“The company does not miss an opportunity to stress its commitment to sustainability. Despite being primarily engaged in fossil fuel activities.”
One of the cases highlighted is in the West African country of Liberia where local villagers have been fighting a palm oil company called Golden Veroleum Liberia GVL, and their investor Golden Agri Resources GAR for several years.
Singapore-based Golden Agri Resources is one of the companies from which Neste buys palm oil and villagers say their local subsidiary GVL has used strong-arm militia tactics to appropriate their land.
“On the day the contract was signed with GVL, three pick-up trucks with soldiers entered our village” says Ricky Kanswea, from the village of Nimupoh.
“Guns in hand, they forced us to give permission to take our land. People who cannot even read or write were forced to sign the contract with their fingerprint” he explains.
The dispute about how GVL obtained its land concessions has been going on since 2012, with villagers complaining to authorities about the tactics used.
The issue in Liberia highlights how Neste’s sustainability policies rely on voluntary due diligence and certification from private organisations – but the new report highlights how these voluntary approaches fail to ensure supply chains that are free from deforestation and human rights violations.
Neste responds to the allegations in the new report
In an official statement, Neste says it hasn’t had time to fully read the new report, but dismissed most of the accusations “based on our quick review” saying they’d been investigated previously, and found to be baseless.
“We acknowledge the fact that there are sustainability concerns linked to the palm oil industry. This is why we continuously monitor our supply chains with locally-operating organizations specialized in various areas of sustainability” says the Espoo-headquartered company.
Neste says it “takes all allegations on suspected sustainability violations and shortcomings seriously” and promised to conduct a transparent investigation of any new claims in the Dutch report.
Elias Huuhtanen in Vilnius contributed to this report.
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