Def restation D ughnuts

Some doughnuts are delicious but destructive. Major companies like Krispy Kreme, Tim Hortons, and Dunkin’ Donuts fry their doughnuts in palm oil, a commodity that is frequently grown by cutting down rainforests. That deforestation is destroying the habitat of endangered animals like Sumatran tigers and orangutans. Then, to make way for plantations, palm oil companies force indigenous people off their land, and use migrant slave and child labor to toil in the plantations. By adopting a “no questions asked” approach to palm oil sourcing, the world’s biggest doughnut companies are getting their raw materials from some of the least responsible companies in the world – like Cargill, IOI Loders Croklaan, and Bunge – who sell palm oil sourced from deforestation. Other food sectors have made enormous progress in making products in ways that don’t contribute to deforestation, but some of the leading doughnut companies are lagging far behind. This is a guide to the dangerous doughnut-palm oil connection – and what can be done about it.

Sumatran Tiger

With its habitat threatened by palm development for doughnuts and other products, there are fewer than 400 left. About Doughnuts Palm oil makes its way into thousands of consumer home of some of the largest remaining ancient rainforests in products, but the doughnut industry takes it to a different the world. To feed the demand for doughnuts and other level. Palm oil is used to fry doughnuts and is in doughnut products, irresponsible palm oil companies have cleared batter, icing and filling. Often, palm oil is the second more than 30,000 square miles of forest to make way for ingredient listed, right after flour.1 When you wipe your palm oil plantations. Largely as a result of palm oil, today hands after eating doughnuts sold by one of the major chains, there are fewer than 400 Sumatran tigers left and orangutans it’s palm oil that makes your napkin greasy. are on the brink of extinction. Meanwhile, palm oil Palm oil is a $50 billion a year commodity.2 It makes its companies like Kuala Lumpur Kepong (KLK) have driven way into half of all consumer goods on the shelves, and it’s in indigenous people off their forest homes to make way for chocolate, baked goods, soaps, detergents, and much more. bulldozers and pesticide sprayers that turn thriving forests U.S. imports of palm oil have increased almost fivefold over into palm oil plantations.3 the past ten years. What palm oil companies are doing to make doughnuts Unfortunately, about half of all palm oil in the world doesn’t just affect the people and wildlife of Southeast Asia: comes from environmentally destructive sources. Major it’s impacting the whole world. Palm oil-driven deforestation suppliers to doughnut makers like Cargill, IOI Loders releases massive amounts of carbon pollution. According to Croklaan and Bunge continue to source palm oil grown by the World Bank, Indonesia is one of the top carbon emitters cutting down rainforests, destroying carbon-rich peatland, or in the world thanks to deforestation.4 Researchers at Stanford exploiting local communities and workers – no questions and Yale found that emissions just from expansion of asked. Indonesia’s palm oil industry on the island of Borneo alone These companies get their palm oil from industrial could top 558 million metric tons of carbon dioxide by 2020 plantations in Indonesia, Malaysia and Papua New Guinea, – more than all of Canada’s fossil fuel emissions.

Major palm oil suppliers like Cargill, IOI Loders Crokaan In Central Kalimantan, and Bunge continue to source Indonesia, a lone orangutan palm oil grown by cutting huddles in the last tree standing in what was once a down rainforests and tropical forest, cut down by destroying carbon-rich IOI-connected Bumitama peatland. Agri Group (2013)

3 Skinner, E. Benjamin. (2013, July 18). Indonesia’s Palm Oil Industry Rife With Human- 1Retrieved from http://www.dunkindonuts.com Rights Abuses. Bloomberg Businessweek. Retrieved from http://www.businessweek.com. 2 Flesher, John. (2014, February 18). Kellogg To Use Environmentally Friendly Palm Oil. 4 Ruitenberg, Rudy. (2012, October 8). Palm Oil Seen Clearing Tropical Forest in Borneo Associated Press. in Yale Study. Bloomberg News. Retrieved from http://www.bloomberg.com

Orangutan

The Bornean Orangutan is endangered, and the Sumatran is on the brink of extinction. Coffee Break Many of the leading commercial doughnut companies are also more susceptible to erosion and climate change, and require coffee companies with a sweet side business. Coffee generally pesticides and fertilizers.8 comes from turning tropical rainforests into plantations, meaning While the major doughnut corporations are mostly secretive there are significant environmental issues with this product as about their coffee sourcing practices, some details have emerged: well. With more than 11 million hectares of coffee planted around • Dunkin’ Donuts-branded coffee is blended from roasted the world, it is one of the world’s leading tropical crops. Indeed, beans sourced from the J.M. Smucker Company and Sara coffee is the world’s second most heavily traded commodity after Lee.9 Dunkin’ provides few details on sustainability, but said 5 crude oil, and it is the largest food import to the United States. In in a 2009 tweet that the majority of its coffee is shade the U.S., café chains (including Dunkin’ Donuts) are the fastest grown.10 It does not provide any further details on verification 6 growing segment in the fast-food sector. or certification. However, the company does report that its Although coffee plantations are not a substitute for natural “espresso beverages are made exclusively with Fair-Trade forest, shade-grown coffee provides major environmental benefits certified espresso beans.”11 compared to monoculture plantations grown in direct sunlight. 12 • Tim Hortons roasts the majority of the coffee it buys itself. The coffee plant is naturally a rainforest plant, and shade-grown The company has an elaborate “Horton’s Coffee Partnership,” coffee is planted between trees, providing natural pest protection that works with coffee-growing farmers. However, they have in the form of bats and birds that live in the shade canopy, and few environmental protections as part of these standards, and natural fertilizer from the trees’ organic matter.7 distinguish themselves from organizations like the Rainforest Unfortunately, many coffee growers, driven by a lack of strong Alliance that protect forests and promote shade-grown sourcing standards by companies such as Dunkin’ Donuts, Tim 13 coffee. Hortons and Krispy Kreme, have shifted increasingly to pesticide- intensive, low-biodiversity monoculture coffee plantations. • Krispy Kreme sells much less coffee than Dunkin’ or Tim The proportion of the world’s coffee now being grown in direct Hortons, with beverages only making up 12% of the chain’s 14 sunlight – made possible by deforestation – is skyrocketing: the sales. No evidence appears to exist that Krispy Kreme has a number of traditional shade-grown coffee farms has dropped from program for sourcing deforestation-free coffee. almost half in 1996 to less than a quarter in 2010. Sprawling monoculture farms where coffee is grown in direct sunlight are 8 Ibid. 9 Convenience Store Decisions. (2007, December 11). Sara Lee Named Exclusive Provider of Dunkin’ Donuts Coffee. Retrieved from http://www.csdecisions.com/ and Jewell, Mark. (2007, August 13). P&G, Dunkin’ Donuts Pour Out Coffee Strategy. Retrieved from http://seattletimes.com/ 10 Retrieved from https://twitter.com/DunkinDonuts/status/3694065857 5 Global Exchange. (2014, May 28). Coffee FAQ. Retrieved 11 Retrieved from http://www.dunkindonuts.com from http://www.globalexchange.org/fairtrade/coffee/faq 12 Aulakh, Raveena. (2010, February 9). Tim Hortons Takes Roasting Into Its Own Hands. 6 Wong, Vanessa. (2014, March 28). More Coffee, Please: Cafés Are Growing Faster Than Retrieved from http://www.thestar.com/ Their Fast-Food Peers. Bloomberg Businessweek. Retrieved 13 Retrieved from http://www.timhortons.com from http://www.businessweek.com. 14 Wong, Vanessa. (2014, February 12). Everyone Wants To Be In K-Cups, Even Coffee 7 Satran, Joe. (2014, April 29). The Coffee Industry Is Worse Than Ever For The Laggards Like Krispy Kreme.Bloomberg Businessweek. Retrieved Environment. Retrieved fromhttp://www.huffingtonpost.com/business/ from http://www.businessweek.com Doughnuts and Deforestation Palm Oil

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In North America, Dunkin’ Donuts is the leading commercial quick service doughnut retailer – and is considering taking action in the near-term to ensure its palm oil comes from responsible sources. Tim Hortons is the leading commercial quick service doughnut retailer in Canada, and has expressed its intent to move toward deforestation-free sourcing in the next year. Despite leading market position in the Southern United States, Krispy Kreme has refused to move toward responsible, non-deforestation doughnuts. These companies operate with a business model that is turning rainforests into a fat, caffeine, and sugar high.

Revenue: Revenue: Revenue: $7.1 billion (2013) $460.3 million (Fiscal 2014) $3.255 billion (2013) Locations: Locations: Locations: 10,858 stores worldwide 812 (including franchisees) 4,304

Palm Oil Use: Palm Oil Use: Palm Oil Use: Palm oil is the second listed “We use vegetable shortening (palm, Palm oil is the third listed ingredient in many of its soybean, and/or cottonseed and ingredient under shortening, and doughnuts, including the glazed canola oil).” is also in specialty doughnut and the old fashioned. Status: components like “maple flavored Status: No known palm oil sourcing nuggets.” Says it is considering a commitments. Unresponsive to Status: deforestation-free, peat-free, report authors; Previously dismissed Says it is formulating a policy exploitation-free policy, but has these concerns by saying: "While we committing to deforestation-free, not yet provided details. appreciate the goals [your peat-free, traceable palm oil, Source: http://www.marketwatch.com/story/dunkin-brands- organization has] set for itself, we anticipated April 2015. reports-fourth-quarter-fiscal-year-2013-results-2014-02-06; http://www.dunkindonuts.com/content/dunkindonuts/en/menu remain vigilant in our focus to Sources: http://annualreport.timhortons.com/2013- /food/bakery/donuts/donuts.html continue strengthening our business highlights.html; http://www.timhortons.com/us/en/about/us- facts.html; http://insidetimmies.com/2014/04/02/review-tim- for the benefit of our team members, hortons-maple-glazed-donut-is-packed-with-maple-flavoured- nuggets/ shareholders and loyal customers."

Sources: http://www.krispykreme.com/about/Contact-Us; http://investor.krispykreme.com/phoenix.zhtml?c=120 929&p=irol-factsheet Doughnuts and Deforestation Palm Oil

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Here are just a few of the many products offered by Cargill, IOI Loders Croklaan, and Bunge that are used by commercial doughnut companies:

RBD Palm Olein1 SansTransTM DD/DF for Bunge NH 4016 4 Cargill Malaysia cites doughnut Frying Palm based donut frying frying as an application. A kosher, palm oil based product shortening product Regal® HB 112-L Flakes2 used for donuts and frying. DDA Donut Shortening7 RBD Palm Olein5 Made from hydrogenated palm DDA Pure Vegetable Donut kernel oil. Applications include “Frying” and “donuts” listed under Fry Shortening8 icing stabilizer. applications Dunkin Donuts Shortening9 1. http://www.cargill.com.my/en/products-services/palm- 4. http://northamerica.croklaan.com/products/sanstrans- products/palm-oil-products/rbd-palm-olein/index.jsp dd-df-for-frying/ 5. http://www.transfatsolutions.com/products/ 2. http://www.cargillfoods.com/na/en/products/oils- 5. http://africa.croklaan.com/applications/frying/donuts/ 6. http://www.nationaldcp.net/images/kosher/231050.pdf shortenings/Products/flakes/index.jsp 7. Ibid. 8. Ibid. 9. Ibid.

Sumatran Elephant

Entire families of Sumatran elephants have been found poisoned by palm oil growers, who view them as pests. Doughnuts and Deforestation Palm Oil

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Cargill is one of the world’s Only Cargill defended largest agribusiness traders. KLK, arguing that KLK was It is the largest privately held “not in violation of any labor corporation in the United laws… nor are we aware of States, and is America’s any investigation….” largest importer of palm oil. Eventually Cargill said they It is a leading player on contacted KLK to ask about almost all agricultural the allegation, but the commodities. thousands of people choking in company has continued to source Cargill has said it is developing a Singapore due to record levels of from KLK. policy to protect forests, smog and haze. In April 2014, Rainforest Action peatlands, and human rights, but That same month, an Network dug deeper into the has not yet shared details of its investigation involving Rainforest Cargill supplier’s practices and policy. Meanwhile, Cargill’s Action Network and featured in found that KLK planned to sourcing and business partners Businessweek found that the Cargill expand into the ancestral lands of indicated that the company supplier was engaged in slave and tribal groups in a remote area of continues to take a “no questions child labor.15 Papua New Guinea without the asked” attitude in its sourcing – Every other KLK customer that consent of those groups.16 The especially for palm oil it purchases Businessweek asked about the analysis again documented child on open exchanges without due charges – including Kellogg, labor and forced labor on two diligence. Kraft, General Mills, P&G and KLK plantations in Indonesia, and In July 2013, for instance, Unilever – flatly said they violated ongoing deforestation on Cargill supplier Kuala Lumpur their supplier codes of conduct, additional plantations. Palm oil Kepong (KLK) was suspect in the and Nestlé and ADM pledged from KLK associated with widespread burning of rainforests their own investigations. deforestation, child, and forced in Indonesia, which left tens of labor is making its way into North America’s favorite doughnuts.

Cargill’s “no questions asked” palm oil procurement policy means it may be sourcing oil grown by cutting down rainforests, destroying carbon-rich peatlands, or engaging in child or slave labor.

15 Skinner, E. Benjamin. (2013, July 18). Indonesia’s Palm Oil Industry Rife With Human-Rights Abuses. Bloomberg Businessweek. Retrieved from 16 Rainforest Action Network. (2014, April 2). Conflict http://www.businessweek.com. Palm Oil In Practice. Retrieved from http://www.ran.org. Doughnuts and Deforestation Palm Oil

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IOI Loders Croklaan is the edible razed and planted in Gunung oil division of IOI Group, a Tarak Protection Forest, Sentap Malaysian-based conglomerate Kancang Production Forest that supplies palm oil to hundreds Reserve, and the buffer zone of of companies. the Gunung Palang National Park IOI Loders Croklaan has been – protected areas that are home to tied to illegal deforestation both endangered orangutans.18 through its affiliate Bumitama, and IOI Loders Croklaan has directly in joint ventures as consistently looked the other way recently as March 2014. In one despite Bumitama’s persistent such joint venture operated by a show ongoing clearing operations. deforestation. In April 2013, producer called Bumi Sawit An analysis by Friends of the Bumitama said it would stop Sejahtera (BSS), 93% of the land Earth, Forest Heroes and clearing, but satellite imagery and holdings consist of swamp forest – SumOfUs found that Bumitama (a on-the-ground research shows with 1,047 hectares of peatlands, company one-third owned by IOI continued clearing that includes nearly 711 hectares of which are both dryland forest and 17 that conducts joint ventures with protected under Indonesian law. IOI and has other close ties) peatswamp. Though IOI committed to limits systematically took advantage of Last year, International Animal on planting in these areas, satellite the Indonesian government’s Rescue saved four starving and on-the-ground photographic orangutans on this land, including weak supervision of complicated 19 evidence from the last six months land and asset transfers. Bumitama a pregnant adult and a baby.

This photo from International Animal Rescue shows one of four starving orangutans – including a pregnant adult and a baby – rescued from land managed by an IOI Loders Croklaan affiliate called Bumitama.

18 Friends of the Earth, Forest Heroes, SumOf Us. (2013, November 27). Commodity Crimes: Illicit Land Grabs, Illegal Palm Oil, and Endangered Orangutans. Retrieved from http://www.foe.org 19 Parker, Diana. (2013, December 2). Palm oil company 17 SGS Qualipalm (Evaluation 2010, September 27 – 2010, Bumitama under fire for clearing rainforest, endangering October 1). Report on Plantation Development Status orangutans. Mongabay. Retrieved from Against RSPO NPP. http://www.mongabay.com

Doughnuts and Deforestation Palm Oil

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Key Suppliers

Bunge is a White Plains, New companies’ efforts to protect York-based agribusiness forests. company. Sarawak is the epicenter of Among major palm oil peatland clearance in the suppliers and traders, Bunge world. The state cleared an is unique in being significantly supply. incredible one third of its dependent on just one supplier: SOP has worked to interfere with peatlands between 2005 and 2010 Sarawak Oil Palms Berhad (SOP). regional efforts to protect forests, alone, and SOP was at the center SOP has cleared extensive areas of peatlands, and the people that rely of these activities. Peatland peatland forests in Borneo, one of on them. In fact, the CEO of clearance for palm oil is the the most carbon-dense ecosystems SOP serves as head of the Sarawak largest contributor to climate in the world. According to trade Oil Palm Plantation Owners change in Southeast Asia. Malaysia data, Bunge purchases 88% of Association (SOPPOA), a trade alone has nine gigatons of carbon SOP’s exports. And according to association aggressively lobbying contained in its peatlands. If all Bunge’s own filings with the Sarawak’s government to oppose this were to be released into the industry trade group, this protections for peatland or atmosphere, it would be represents approximately 44% of community exploitation. They’ve equivalent to the total US Bunge’s total global palm oil even been attacking other greenhouse gas emissions from 2008-2012.20

Land clearing for oil palm on Sarawak Bunge’s Sarawak-based supplier has led the effort to undermine Wilmar’s “No Deforestation, No Peat, No Exploitation” Commitment in industry circles, and in the press.

20 Global Change Biology, “Global and regional importance of the tropical peatland carbon pool,” http://onlinelibrary.wiley.com/doi/10.1111/j.1365- 2486.2010.02279.x/abstract;jsessionid=FF990E9D F98B841B07C80F8A1FEDF689.f04t01 Better Choices The good news is that the doughnut industry has many tropics, such as former cropland and pastureland that is no choices for sourcing responsible vegetable oil. Companies longer being used.22 Not all of this area may be suitable for controlling more than half of global palm oil trade have palm oil, but much of it is – and the highest estimate of land adopted and are implementing “No Deforestation, No Peat, needed to meet the demand for palm oil is 56 million and No Exploitation” policies to ensure that any new hectares.23 Many consumer companies are also taking action plantations aren’t developed at the expense of forests or local to ensure their products aren’t driving deforestation. Already communities. Wilmar International, Golden Agri-Resources, Nestlé, Kellogg’s, Mars, Safeway, Ferrero Rocher, Unilever New Britain Palm Oil, Agropalma, and Daabon are leading and a growing number of other leading companies have the way in transforming the industry.21 committed to totally eliminate deforestation-based palm oil And it is an industry with a clear path forward. Instead of from their supply chains in the near term. cutting down rainforests to grow palm oil, companies can But even as more than half the world’s palm oil is headed instead grow on the tens of millions of acres of already- in a responsible direction, companies like Tim Hortons, degraded land available for development. Several studies Krispy Kreme, and Dunkin’ Donuts have continued to point out advantages of growing on degraded land ranging source palm oil no questions asked. This is an industry in from availability and cost to a significant carbon benefit. One transformation. If a doughnut company wants to buy study estimates that there are between 97 million and 129 responsible palm oil, it could pick up the phone and find a million hectares of abandoned land in the ready supply, right now. It’s time for them to do it.

22 Campbell, J.E., D.B. Lobell, R.C. Genova, and C.B. Field. 2008. The global potential of bioenergy on abandoned agricultural lands. Environmental Science and Technology 42(15):5791-5794. Online at http://www.ncbi.nlm.nih.gov/pubmed/187545. 21 Grant, Jeremy. (2013, December 6). Wilmar bows to southeast Asia deforestation 23 Corley, R.H.V. 2009. How much palm oil do we need? Environmental science and policy concerns on palm oil. Financial Times. Retrieved from http://www.ft.com. 12(2):134-139.

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Citation: Finkelstein, Joel and Glenn Hurowitz. “Deforestation Doughnuts.” Forest Heroes. June 6, 2014.