Source: Greenpeace
Greenpeace Aotearoa says Fonterra’s entire supply chain is tainted with illegal palm products after all of the major importers of palm kernel into New Zealand have been found to be illegally operating palm plantations in Indonesia.
A decree from the Indonesian Minister of Forestry released a list of 436 companies operating palm plantations without proper permits in Indonesian forest areas. New Zealand’s main importers of palm kernel – Wilmar International, Viterra, GAR, Musim Mas and Apical – are all implicated in this list of illegal operators.
Greenpeace spokesperson Sinéad Deighton-O’Flynn says, “Over the last 20 years, nearly 10 million hectares of primary forest have been destroyed in Indonesia, and palm plantations have been the leading driver of that deforestation. It is shameful that New Zealand’s dairy industry, led by Fonterra, continues to contribute to this destruction through its reliance on palm kernel.”
New Zealand is the world’s biggest importer of palm kernel, importing nearly 2 million tonnes annually from Southeast Asia. Palm kernel is used as a supplementary feed for dairy cows, particularly during dry summer months when there isn’t enough grass to feed the dairy herd. The main importer of palm kernel to New Zealand is Wilmar International, the parent company of Agrifeeds, which sells its palm kernel exclusively through Fonterra’s Farm Source stores.
“This new evidence indicates that Fonterra and Agrifeeds are both complicit in deforestation and the destruction of rare wildlife habitat in Southeast Asia,” says Deighton-O’Flynn.
“When Fonterra uses deforestation-linked palm kernel, it becomes embedded in its dairy products, tainting its entire supply chain. This means products like Kit Kat, Snickers bars and Milo, which are made with Fonterra’s dairy, are linked to deforestation too.”
An analysis published by Greenpeace Indonesia indicated that as of 2019, illegal oil palm plantings in Indonesia’s forest estate occupied 183,687 hectares of land previously mapped as orangutan habitat and 148,839 hectares of Sumatran tiger habitat. Both species are critically endangered.
In Decree 36/2025, Indonesia’s Minister of Forestry revealed that over 1 million hectares of forest are being used for palm plantations illegally, with 790,474 hectares in the process of settlement, while 317,253 hectares have been rejected for settlement.
Deighton-O’Flynn says, “Fonterra made a commitment to zero deforestation in its supply chains by 2025, and its biggest customers like Nestlé, MARS and Danone all have Zero Deforestation policies. However, this Indonesian Government decree implicates all of these companies in illegal operations and associated historic deforestation in Indonesia.”
Wilmar International, and many of the other companies listed hold Roundtable on Sustainable Palm Oil (RSPO) certifications. A Greenpeace report from 2021, found that certifications like RSPO are weak tools to protect rainforests and peatlands from deforestation.
“Fonterra must ban the use of rainforest-destroying palm kernel on all of its farms across the country in light of these new developments. The company cannot continue to claim to be deforestation-free while relying on this destructive feed.”
In late 2024, Greenpeace announced it was suing Fonterra for false claims on its Anchor Butter packaging. The packaging bore a label reading ‘100% New Zealand grass-fed’, despite Fonterra’s own policy allowing for up to 20% of a cow’s diet to be palm kernel. Since the lawsuit was announced on September 30th, the dairy giant has changed the logo on the packaging – but the grass-fed claim remains.
Deighton O’Flynn says, “Fonterra must phase out the use of palm kernel, instead of relying on greenwash tactics, like misleading logos, weak sustainability certifications and a deforestation policy that ignores rainforest destroying palm kernel.
“As Fonterra looks to sell its consumer brands, we’re issuing a warning to potential buyers. Fonterra’s grass is not as green as they claim it is – in fact, in some cases, it isn’t grass at all.”
