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BUSINESS ETHICS
GROUP ASSIGNMENT

WHAT LIES BENEATH THE BEAUTY

Adityo Prasidi (1340000582)
Cinthya Natalia (1340001244)
Jeannie Purnamasari (1340001175)
Karina Rizki (1340001130)
Niltha Mathias (1340000462)
Oktavius Ivoni (1340000771)
Regvred Reinaldo (1340000784)
Talita Anggreni (1340001023)

TABLE OF CONTENT
WHAT LIES BENEATH THE BEAUTY 1
CHAPTER 1 BACKGROUND: UNILEVER 2
1.1 Company Background: Unilever 2
1.2 Overview of Unilever Indonesia 3
1.3 Unilever Indonesia Foundation 3
1.4 Overview of Dove Products 4
1.5 Environmental Record 5
CHAPTER 2 CASE STUDY: UNILEVER VS GREENPEACE 7
2.1 Indonesia Palm Oil Plantation 7
2.2 Unilever Palm Oil Suppliers 11
2.3 Environment Destruction Caused by Palm Oil Plantations 14
2.3.1 Deforestation 15
2.3.2 Destruction of Orang Utan Habitat 17
2.4 The Impact to Unilever 18
CHAPTER 3 CASE ANALYSIS 19
3.1 Ethical Theory 19
3.1.1 The Stockholder Theory 19
3.1.2 The Stakeholder Theory 20
3.1.3 The Social Contract Theory 20
3.2 Triple Bottom Line 21
3.2.1 People 21
3.2.2 Planet 22
3.2.3 Profit 22
3.3 Environmental Issues of Business Ethics 22
3.3.1 Business and Ecology 23
3.3.2 The Ethics of Environmental Protection 24
3.3.3 Who Should Pay the Cost of Environmental Damage 24
3.3.4 Regulation 24
3.3.5 The Value of Nature 24
3.4 Ethical Issues 25
3.4.1 Environment Destruction 26
3.4.2 Violating the RSPOs Principles 28
3.4.3 Unilever Failure of Screening its Suppliers’ Code of Conduct 30
3.4.4 Government Neglect of the Environment Issue 30
CHAPTER 4 CONCLUSION AND RECOMMENDATION 32
APPENDIX 1 Climate and Biodiversity Impacts of Unilever Palm Oil Suppliers in Kalimantan 35
APPENDIX 2 Dove Onslaugt(er) Video Capture 36
APPENDIX 3 Picture of People Support on the Greenpeace Campaign 37
Bibliography 38

WHAT LIES BENEATH THE BEAUTY
An ethical case of Dove against Greenpeace in Indonesia

Every two seconds, an area of forest the size of a football pitch is lost due to logging or destructive practices. Seventy two percent of Indonesia's intact forest landscapes have already been lost forever.1 While the causes vary from region to region, they all have one thing in common: human activity. Indonesian tropical rainforests were damaged by the exploitation of palm oil.
Unilever as the number one fast moving consumer goods company uses palm oil as an ingredient to produce their products. Even though it takes only 4% of the global total, Unilever is the world’s biggest buyer of palm oil. As one of the main brand of Unilever, Dove is the world’s number one cleansing brand with double digit growth and sales over €2.5 billion in over 80 countries, out of more than €50 billion overall Unilever sales a year, the use of palm oil in Dove Products turns out to significantly contribute to this deforestation.
As the biggest single buyer of palm oil in the world, Unilever has a special responsibility to help clean up the industry that's behind so much forest destruction. The following case will discuss the issue between Unilever as the owner of Dove Brand which went head-to-head against Greenpeace regarding deforestation.

CHAPTER 1
BACKGROUND: UNILEVER

1.1. Company Background: Unilever
Unilever is an Anglo–Dutch multinational consumer goods company with more than 173,000 people work for Unilever and known the number 1 fast-moving consumer goods employer of choice among graduates in 20 countries. Its products include foods, beverages, cleaning agents and personal care products. It is the world's third-largest consumer goods company measured by 2011 revenues (after Procter & Gamble and Nestlé) and the world's largest maker of ice cream. is multinational with operating companies and factories on every continent except Antarctica and research laboratories in: Colworth and Port Sunlight, England; Vlaardingen, the Netherlands; Trumbull, Connecticut and Englewood Cliffs, New Jersey, United States; Bangalore, India (see also Hindustan Unilever Limited); and Shanghai, China.
Unilever's products include foods, beverages, cleaning agents and personal care products. The company owns more than 400 brands, although its 25 largest brands account for over 70% of total sales Unilever focuses resources on 13 "billion-Euro brands", each of which has annual sales in excess of €1 billion. Unilever products are sold in more than 190 countries, generating sales of €51 billion in 2012. Unilever organises its brands into four categories: Homecare, Personal Care, Foods and Refreshment (which includes tea, ice-cream and beverages).
Unilever's current largest-selling brands include: Aviance; Axe/Lynx; Ben & Jerry's; Dove; Flora/Becel; Heartbrand; Hellmann's; Knorr; Lipton; Lux/Radox; Omo/Surf; Rexona/Sure; Wish-Bone; Sunsilk; Toni & Guy; TRESemmé; and VO5.
Unilever's largest international competitors are Nestlé and Procter & Gamble. It also faces competition in local markets or specific product ranges from numerous companies, including Beiersdorf, ConAgra, Danone, Henkel, Mars, Pepsico, Reckitt Benckiser and S. C. Johnson & Son.
The current Unilever corporate logo was introduced in 2004 and was designed by the brand consultancy Wolff Olins. It is composed of 24 icons woven together to create a U shape, with each icon representing one of the company's sub-brands or its corporate values. The brand identity was developed around the idea of adding vitality to life.

1.2 Overview of Unilever Indonesia
Unilever Indonesia was established in Indonesia on December 5, 1933. It has grown to be a leading company of Home and Personal Care as well as Foods and Ice Cream products in Indonesia. Unilever Indonesia’s portfolio includes many of the world’s best known and well-loved brands, such as Pepsodent, Pond’s, Lux, Lifebuoy, Dove, Sunsilk, Clear, Rexona, Vaseline, Rinso, Molto, Sunlight, Wall’s, Blue Band, Royco, Bango and many more.
The Company offered its shares to the public in 1981 and has been listed on the Indonesia Stock Exchange since 11th January 1982. As at the end of 2011, the Company ranked six on the Indonesia Stock Exchange in terms of market capitalization.
The Company has two subsidiaries: PT Anugrah Lever (in liquidation), a 100% owned subsidiary (previously a joint venture marketing company for soy sauce) that has been consolidated and PT Technopia Lever, a 51 percent owned subsidiary that engages in distribution, export, and import of goods under the Domestos Nomos trademark.
In Indonesia, Unilever’s top brands include: * Food & Beverages: BlueBand, Bango, Buavita, Sari Wangi, Royco, Wall’s * Home Care: Rinso, Sunlight, ipol, CIF, Vixal, Domestos Nomos * Personal Care: Dove, Axe, Citra, Clear, Lifebuoy, Lux, Pepsodent, Pond’s, She, Rexona, Sunsilk, Vaseline, Zwitsal.

1.3 Unilever Indonesia Foundation
The Unilever Foundation is partnering with five leading global organisations: Oxfam, PSI, Save The Children, UNICEF and the World Food Programme and is dedicated to improve the quality through provision of hygiene, sanitation, access to clean drinking water, basic nutrition and enhancing self-esteem.
Unilever Indonesia Foundation started its historic step in 27 November 2000. The Unilever Indonesia Foundation’s (the Foundation) mission was, and is, to discover and empower potential in the community, provide added value to society, unite the strengths of its partners, and act as a catalyst for formation of partnership. The ideas of sustainable development and growing together with the community are inseparable from the visionary concepts of former Chairman and CEO of Unilever Indonesia from 1998 to 2003, Nihal Kaviratne. As the leader of the company, he was deeply concerned with the effort to build the company’s culture through organisational transformation and change, as well as good corporate governance and corporate social responsibility. At that time, the community empowerment programmes conducted by Unilever were still sporadic and not integrated. As a consequence, the results were far from optimal, let alone sustainable. Then the Foundation was established and given the task of conducting CSR in an integrated way.

1.4 Overview of Dove Products
Dove is a personal care brand owned by Unilever. Dove products are manufactured in Argentina, Australia, Brazil, Canada, Germany, India, Indonesia, Ireland, Mexico, Netherlands, Pakistan, Philippines, Thailand, Turkey and United States. The products are sold in more than 35 countries and are offered for both women and men. The Dove trademark and brand name is currently owned by Unilever. Dove's logo is a silhouette profile of the brand's namesake bird.
The Dove line includes antiperspirants/deodorants, body washes, beauty bars, lotions/moisturizers, hair care, and facial care products. Dove is primarily made from synthetic surfactants, soaps (derived from vegetable oils such as palm kernel) and salts of animal fats (tallow). In some countries, but not UK, Dove is derived from tallow (like many soaps) and for this reason it is not considered vegan, unlike vegetable oil based soaps. Dove is formulated to be pH neutral, a pH that is usually between 6.5 and 7.5. Hair Products | | Bar/Body Wash Products | | Deodorants | | Lotion Products | |

In 2006, Dove started the Dove Self-Esteem Fund. It purports to be "an agent of change to educate and inspire girls on a wider definition of beauty and to make them feel more confident about themselves". To this day, Dove have created a number of largely online-only short films, including Daughters (which also aired in a 75-second spot during the Super Bowl XL), Evolution (which won two awards at the Cannes Lions International Advertising Festival), Onslaught, and Amy.

1.5 Environmental Record
Unilever has declared the goal of decoupling its environmental impact from its growth, by halving the environmental footprint of its products over the next 10 years; helping 1 billion people improve their health and well-being; and sourcing all of its agricultural raw materials sustainable. Despite these ambitious sustainability goals, the company doesn't have a concrete plan yet and pursues a trial-and-error strategy.
Unilever has been criticised by Greenpeace for causing deforestation, Unilever was targeted in 2008 by Greenpeace UK which criticised the company for buying palm oil from suppliers that are damaging Indonesia's rainforests. By 2008, Indonesia was losing 2% of their remaining rainforest each year, having the fastest deforestation rate of any other country.[44] United Nations Environmental Programme stated that palm oil plantations are the leading cause of deforestation in Indonesia. Furthermore, Indonesia was the 3rd largest emitter of greenhouse gasses largely due to the destruction of rainforests in for the palm oil industry, which contributed to 4% of global green house gas emissions. According to Greenpeace, palm oil expansion was taking place with little oversight from central or local government as procedures for environmental impact assessment, land-use planning and ensuring a proper process for development of concessions were neglected. Plantations that were off-limits, by law, for palm oil plantations were being established as well as the illegal use of fire to clear forest areas was commonplace.
As a commitment to sustainable palm oil resource, in 2004 Unilever became a founding member of the Roundtable on Sustainable Palm Oil (RSPO), which is an industry-led initiative set up in co-operation with the conservation organization WWF. Unilever took the lead to set up the RSPO because local governments were not able to properly regulate the sector since too often economic development was given priority over forest preservation.

CHAPTER 2
CASE STUDY: UNILEVER VS GREENPEACE

2.1 Indonesia Palm Oil Plantation
Borneo, the third largest island in the world, was once covered with dense rainforests. With swampy coastal areas fringed with mangrove forests and a mountainous interior, much of the terrain was virtually impassable and unexplored. Headhunters ruled the remote parts of the island until a century ago.
(Rhett, 2012) explain that In the 1980s and 1990s Borneo underwent a remarkable transition. Its forests were leveled at a rate unparalleled in human history. Borneo's rainforests went to industrialized countries like Japan and the United States in the form of garden furniture, paper pulp and chopsticks. Initially most of the timber was taken from the Malaysian part of the island in the northern states of Sabah and Sarawak. Later forests in the southern part of Borneo, an area belonging to Indonesia and known as Kalimantan, became the primary source for tropical timber. Today the forests of Borneo are but a shadow of those of legend and those that remain are highly threatened by the emerging biofuels market, specifically, palm oil.
Palm oil is the most productive oil seed in the world. A single hectare of palm oil may yield 5,000 kilograms of crude oil or nearly 6,000 liters of crude, making the crop remarkably profitable when grown in large plantations. One study that looked at 10,000 hectare-plantations suggests an internal rate of return of 26 percent annually. As such, vast swathes of land are being converted for palm oil plantations. Palm oil cultivation has expanded in Indonesia from 600,000 hectares in 1985 to more than 6 million hectares by early 2007, and is expected to reach 10 million hectares by 2010.

Deforestation in Borneo was historically low due to infertile soils (relative to surrounding islands), unfavorable climate, and the presence of disease. Deforestation began in earnest during the mid-twentieth century with the establishment of rubber plantations, though these had a limited impact. Industrial logging rose in the 1970s as Malaysia depleted its peninsular forests, and former Indonesian strongman President Suharto distributed large tracts of forest to cement political relationships with army generals. Logging expanded significantly in the 1980s, with logging roads providing access to remote lands for settlers and developers. At the same time, the Indonesian government's transmigration program was in full swing, sending more than 18,000 people per year during the decade to settle in Kalimantan.

At the same time that loggable timber became increasingly scarce, interest in palm oil plantations began to spread in Borneo. Though it was first planted in Indonesia in 1848, it wasn't until the mid-1990s that palm oil cultivation really started to accelerate. In Malaysia, today the world's largest producer of palm oil, palm oil plantations grew from 60,000 hectares in 1960 to more than 3 million hectares in 2001. In 2004, 30% of these of these were located in Sabah, which has ideal growing conditions for the plant, and 13% were in Sarawak. However, because virtually all suitable land is used in Peninsular Malaysia, expansion is expected mostly to occur in Malaysian Borneo and, to a greater extent, Kalimantan. Palm oil cultivation has increased from 186,744 hectares in Sabah and Sarawak in 1984 to 1,673,721 hectares at the close of 2003.
In Kalimantan, palm oil has expanded even faster: from 13,140 hectares in 1984 to nearly one million hectares at the end of 2003. While much of this new land brought under cultivation is less than ideal for palm oil, the crop's low maintenance, combined with growing demand and lack of other viable economic options in the region, make it a low-risk investment for large estate owners. Studies underway in Western Kalimantan by Lisa Curran, suggest an annual internal rate of return of 26% over a 25 year period for palm oil plantations larger than 10,000 hectares, though small holdings are considerably less lucrative. Large plantations owners are aided by subsidies that include crude processing facilities and roads.
Palm oil is derived from the plant's fruit, which grow in clusters that may weigh 40-50 kilograms. A hundred kilograms of oil seeds typically produce 20 kilograms of oil, while a single hectare of palm oil may yield 5,000 kilograms of crude oil, or nearly 6,000 liters of crude oil that can be used in biodiesel production. At $400 per metric ton, or about $54 per barrel, palm oil is competitive with conventional oil. In the future, palm oil prices are expected to fall further as more palm oil comes under cultivation. Indonesia aims to have 8-10 million hectares under cultivation by 2010. Below figures show the palm oil facts and figures, products using palm oil as one of its ingredients, and the process of palm oil production.

Palm oil plantation expansion in Indonesia takes place with little oversight from central or local government. Procedures for environmental impact assessment, land-use planning and ensuring a proper process for development of concessions are neglected.
While most current palm oil production is concentrated in Riau and North Sumatra, palm oil groups are rapidly expanding their land and clearing new areas. In West Kalimantan, by 2007 palm oil concessions had been granted on more than 3.2 million ha. In Central Kalimantan, by 2006 palm oil concessions had been granted on 1.1 million ha.
2.2 Unilever Palm Oil Suppliers
Unilever demand and usage of palm oil for its products were largely fulfilled by its palm oil suppliers. Primary suppliers of palm oil for Unilever were Indonesian companies, whose production constitutes a third of Indonesia’s palm oil production (Greenpeace, 2008). According to the Greenpeace investigations result, those companies, also a member of RSPO, have driven extinction and changing the climate as they conducted deforestation and peat land destruction, resulting to the significant greenhouse gases (GHG) emissions. GHGs are gases that trap heat in the atmosphere and hence can increase the normal temperature of the atmosphere and in the end affecting the climate (United States Environmental Protection Agency, 2011).
Major suppliers of palm oil to Unilever are listed and explained below: 1. Sinar Mas Group
Sinar Mas Group is considered to be one of the largest conglomerates in Indonesia and also Indonesia’s largest oil palm plantation company through its subsidiary, PT SMART (Wikipedia, 2010). The company’s palm oil plantation covers 213,000ha in Sumatra, 135,000ha in Kalimantan and 12,000ha in Papua. The company’s aggressive plantation has been involving deforestation, critically on the peat lands and orang utan habitat, as it represented over a third in growth of plantation area in a two-year period.
Greenpeace investigations shown that the company had violated Indonesia Forestry national laws and in breach of principles of the RSPO as its conducting deforestation and draining peat land without proper impact assessment or obtaining correct permits (Greenpeace, 2009). Notwithstanding the reputation and process conducted by Sinar Mas for its palm oil production, the relationship between Unilever and Sinar Mas had been long-standing. Sinar Mas had even claimed that Unilever is their major customers (Greenpeace 2008)

2. IOI Group
IOI Group was largely associated with property development in 1982 and oil palm producers and plantations in 1985 (IOI Group, 2013). In 2007, 790,000 tons of crude palm oil was produced by the company which represented more than 2% of global production and around 180,000 tons were produced in Indonesia, which constitutes 1% of Indonesian production (Greenpeace. 2008). The company owned a plantation holding consisting of 152,000 ha in Kalimantan. The company’s vast area of plantation was surely contributed by large cutting of trees and hence producing greenhouse gas.
The palm oil produced by IOI Group had long been used by Unilever on its product called Persil. Persil is a laundry detergent which marketed as powerful detergent to remove stains in clothes and the product was developed and sold by Unilever starting in mid-1990s (Unilever, 2013). Unilever’s relationship with IOI Group started prior to 2002 and in 2008, Unilever named IOI as one of its principle suppliers (Greenpeace, 2008).

3. Adm-Kuok-Wilmar
Adm-Kuok-Wilmar is an alliance between three major players in the palm oil sector and all of them are member of the RSPO. The alliance controls about 570,000ha of concession area, whereby just over a third of this has been cleared and planted, across Indonesia and Malaysia. By this vast area, the alliance had able to produce 540,000 tons of crude palm oil, accounting more than 3% of Indonesia production (Oilword ISTA Mielke, 2008).
The alliance has declared Unilever as its key international customers, next to Procter & Gamble and Nestle (Wilmar, 2006). Unilever outsourced palm oil from this alliance for one of its products called Flora, which is majority sold in UK. Flora products include butter and hard margarines which is declared as high in polyunsaturated fat and at least 70% lower in saturated fat than butter (Unilever, 2013). Unilever offices in UK and Pakistan were the main office which had purchased palm oil from the alliances. Based on the investigations conducted by Greenpeace, Adm-Kuok-Wilmar alliance had been implicated as the party contributing to the deforestation of orang utan habitats and peat lands.

4. Sime Darby
In 2007, there was a merger between Sime Darby, Golden Hope Plantations, and Kumpulan Guthrie for the establishment of Sime Darby Plantation which in the end became the world’s largest palm oil producer, with potential output of 8% (Sime Darby, 2008). Sime Darby plantation in Indonesia consisted of area with 200,000ha of palm oil concessions and resulted in 800,000 tonnes of crude palm oil production, constitutes nearly 5% of Indonesia production (Oilworld ISTA Mielke, 2008).
Sime Darby is also considered as the major supplier of Unilever. Even in 2002, Golden Hope bought Unimills, an oil refinery located in Netherland which belongs to Unilever. Unimills is the second largest diversified oil and fats blend manufacturer in Europe (Unimills, 2007). Unilever had also named Sime Darby as one of its principle suppliers. Greenpeace had also found evidences which lead to implication that Sime Darby had burned land for its palm oil concessions (Greenpeace, 2008).

5. Musim Mas
Musim Mas is an Indonesian local company whose businesses are centered on its core business of palm cultivation and palm oil processing (Musim Mas, 2006). Within Indonesia, the company had more than 126,000ha of landholdings in Indonesia, and half of these are located in Central Kalimantan. The plantations produced around 300,000 tons of crude palm oil, accounting for 2% of Indonesia productions (Oilworld ISTA Mielke, 2008). Despite the certification that Musim Mas obtained from RSPO on all its operations, Greenpeace found that a baby orang utan was found in the company’s concession area, indicating that the land has high conservation value (Greenpeace, 2008). It should be considered as against the law action however Indonesian Government did not seem to care.
The link between Unilever and Musim Mas went through the direct suppliers of Unilever as Golden Hope and Cargill were known to source its palm oil from Musim Mas. Musim Mas had been implicated on causing the deforestation of orang utan habitat, peat lands and also fire hotspots (Greenpeace, 2008) and despite this, Unilever also named Musim Mas as one of its principle suppliers.

6. Asian Agri
Asian Agri, a part of Raja Garuda Mas Group owned by Indonesian conglomerates Sukanto Tanoto, manages 160,000ha of palm oil plantations in three provinces in the Sumatra, Indonesia (Sukanto Tanoto, 2013). The three provinces include Riau, Jambi and North Sumatra. In 2007, the company refined about 1.5MT of crude palm oil, which is about 9% of Indonesia total production (Asian Agri, 2008). Similar to Musim Mas, Unilever linkage to Asian Agri was through its suppliers, Cargill and hence Unilever had named Asian Agri as one of its principle suppliers.
Asian Agri was also implicated for deforestation of orang utan habitat and peat lands. Below picture on the right shows the area of orang utan habitat, while the left one shows the fire done by Asian Agri through its palm oil concessions, PT Karya Dewi Putra (Greenpeace 2008). The pictures act as an evidence of deforestation conducted by Asian Agri.

7. Astra Agro
Astra Agro, a company owned majority by PT Astra International, also known as one of the suppliers of Unilever. The company was established 32 years ago and considered as the leading palm oil producer in Indonesia (Astra Agro Lestari, 2013). In 2007, the company expanded its landholdings by 70% of nearly 400,000ha in Kalimantan, Sulawesi and Sumatra and resulting in the production of 921,000 tons of crude palm oil, accounting for 5.5% of Indonesian’s production (Oilworld ISTA Mielke, 2008). This supplier of palm oil for Unilever through Cargill was also implicated to conducting deforestation on orang utan habitat and peat lands.

2.3 Environment Destruction Caused by Palm Oil Plantations Unilever through its growing palm oil consumption has contributed to the destruction of Indonesia’s rainforests and peat lands. Unilever high demand of palm oil, which is 3% of global production and whereby about half comes from Indonesia, has created initiatives for its suppliers to expand their landholdings and concessions to increase their palm oil productions. In 2008, Greenpeace, a non-governmental organization focuses strongly on global environmental issues, was conducting analysis and investigation on the palm oil concessions of Unilever’s suppliers in Indonesia which result shown how the palm oil productions had led to two major environmental destructions (Greenpeace, 2008), deforestation and the extinction of orang utan habitat.

2.3.1 Deforestation
As palm oil is produced from crushing and extracting the oil from the fruit of the of the palm oil tree, deforestation for the purpose of palm oil tree plantation is something that is seemingly common. There are not so many palm oil natural plantations are available in the world. Palm oil trees grow in tropics and although originally native to West Africa and South America, many of them were introduced to South East Asian countries, such as Malaysia and Indonesia. Both countries now produce 85% of the world’s palm oil (WWF, 2013). It has been found that up to 300 football fields of forest are cleared every hour. Deforestation is the cutting, clearing and removal of rainforest or related ecosystems into less bio-diverse ecosystems such as pasture, cropland or plantations (Kricher, 1997).
Deforestation in Indonesia for the purpose of palm oil plantation had included the clearing of peat lands. Peat lands found in tropical areas contain high water tables and low decomposition rates, form vast stores of organic carbon tens of meters thick and hence deforesting these peat lands will release the carbon into atmosphere, which in the end will affecting the climate or so called greenhouse effects (The Open University and Partners, 2013).
Below figure shows the carbon stored within peat lands of Unilever suppliers’ palm oil concessions areas in Riau (Greenpeace, 2008):

The figure shows how Unilever suppliers have concessions on deep peat, which is considered as legally off-limits to development, in any purpose. These peat lands hold considerable stores of carbon.
By this and also looking at the land expansion conducted by Unilever’s suppliers, palm oil plantations are now the leading source of rainforest destruction in Indonesia. Indonesia has become the 3rd largest GHG emitter, following China and USA, where the vast majority of these GHGs originates from the degradation of the peat lands. Indonesia’s emissions from destroyed or degraded peat land are around 1.8Gt of carbon per year, equivalent to 4% of total GHG emissions. New estimates suggest that 98% of Indonesian forest may be destroyed by 2022, the lowland forest much sooner. Below illustration shows how deforestation linked to the emissions of carbon (Greenpeace, 2008):

Greenhouse gases produced by the deforestation of forest and peat lands are significantly causing global warming. The carbon when released into the atmosphere will absorb some of the infrared radiation coming from the sun and collect the heat energy while delaying its passage back out of the atmosphere. Due to this, or what we called greenhouse effects, the global average temperature is around 15 Celsius, while normally it should have been -18 Celsius. In the prolong future, the global average temperature are expected to be on order of 2-5 Celsius higher by the time carbon emissions doubles (University of Colombia, 2013).
Temperature increment has made the oceans becoming warm and warmer. Warmer oceans and sea surface will result in more and stronger tropical storms (hurricanes and typhoons) and will also change the patterns of rainfalls around the globe. The timing of wet and dry seasons will change. Severe summer heat in an area where it is not used to it will cause death and higher heat in tropical areas may lead to increase in malaria incidents. The rise of ocean temperature will also increase the level of sea surface hence lead to coastal erosion and flooding.

2.3.2 Destruction of Orang Utan Habitat
Orang Utan is considered as endangered species due to its small population and it is underway of being extinct due to the destruction of its habitat. Orang utan survive only in the dwindling tropical rainforests of Borneo and northern Sumatra, in which they depend on the forest for food and nesting sites. Orang utan is the world’s largest tree-climbing mammal. They live primarily in primary and secondary forest. They prefer to live in lowland areas and forests in river valleys or food plains. The population of orang utan in Borneo is estimated to be around 41,000 individuals (WWF, 2013).
The destruction of forest in Indonesia for palm oil plantation had destroyed orang utan habitat and making them even more extinct. The analysis conducted by Greenpeace in 2008 confirmed that expansion of oil palm plantations by Unilever suppliers is having a serious impact on their habitat. As the habitat of orang utan being destroyed, the availability of their food had also become scarce. As the plantation worker seek to survive the young palm plants, hungry orang utan can become pests to oil palm producers, and lead to the killing of orang utans. According to the Centre for Orang Utan protection, in 2006 itself, there are at least 1,500 orang utans died as a result of deliberate attacks by plantation workers (Greenpeace, 2008). Below figure shows the impact of fire hotspot for oil palm concessions are affecting the orang utan habitat:

2.4 The Impact to Unilever
In 2008, Greenpeace had released reports showing how Unilever’s palm oil suppliers are destroying Indonesia’s forest and endangering orang utan through the destruction of its habitat. Greenpeace was accusing Unilever as driving the palm oil supply increment from its suppliers and hence driving the land expansion for palm oil plantation. The report was made through an analysis, investigation and even based on satellite showcase on the land covering palm oil plantation in Borneo and Sumatra. The reports were titled “How Unilever Palm Oil Suppliers are Burning Up Borneo” and “The Hidden Carbon Liability of Indonesian Palm Oil”. The reports were also directed toward other giant multinational companies, including Nestle, P&G and Kraft (Greenpeace, 2008). However, considering Unilever as the biggest user of palm oil in the world, it had affected more on this company.
Within the same year, Greenpeace had also published a video concerning the same issue with title “Dove Onslaught(er)”. The video open with a little girl with Borneo background and it concluded that when the little girl has grown, the forest surrounding her may no longer exist due to the palm oil plantation conducted by Unilever’s suppliers. This video, added with additional campaign on the same issue published by Greenpeace in the newspaper, were well shown around the world, specifically in Europe where Unilever headquartered was based. People were informed how Unilever destroyed the forest in Indonesia and endangering orang utan population.
As a result of this campaign, Unilever had received many public protests and off course, pressure from press. In just two weeks of the campaign, the company had received tens of thousands of protest emails from around the world and Greenpeace activist had action of bringing hoards of media to the company’s offices in the UK, Netherlands and Italy (Greenpeace, 2009).

CHAPTER 3
CASE ANALYSIS

3.1 Ethical Theory
Ethics is broad and major branch of philosophy and is refer to specific moral principles in the context of morality (Crisp 1998 in Pruyt and Kwakkel, 2007), while business ethics or corporate ethics is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. Business ethics applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Business ethics has a profound connection with the norms of each historical period. As time passes norms evolve, making accepted behaviors to become objectionable. With the evolvement of the norms, this development is also causing the business ethics to evolve as well.
There are three theories of business ethics, which are the stockholder, stakeholder, and social contract theories. These theories present distinct and incompatible accounts of a business person’s ethical obligations (Hasnas, J; 1998).

3.1.1 The Stockholder Theory
According to this theory, businesses are merely arrangements by which one group of people, the stockholders, advanced capital to another group, the managers, to be used to realize specified ends and for which the stockholders receive an ownership interest in the venture. Under this view, managers act as agents for the stockholders. They are empowered to manage the money advanced by the stockholders, but are bound by their agency relationship to do so exclusively for the purposes delineated by their stockholder principals. The existence of this fiduciary relationship implies that managers cannot have an obligation to expend business resources in ways that have not been authorized by the stockholders regardless of any societal benefits that could be accrued by doing so. This implies that a business can have no social responsibilities.

3.1.2 The Stakeholder Theory
As an empirical theory of management, the stakeholder theory holds that effective management requires the balanced consideration of and attention to the legitimate interests of all stakeholders, defined as anyone who has a stake in or claim on the firm. This has been interpreted in both a wide sense that includes any group or individual who can affect or is affected by the corporation, and a more narrow sense that includes only those groups who are vital to the survival and success of the corporation. It is perhaps more familiar in its narrow sense in which the stakeholder groups are limited to stockholders, customers, employees, suppliers, management, and the local community. The stakeholder theory asserts that a business’s financial success can best be achieved by giving the interests of the business’s stockholders, customers, employees, suppliers, management, and local community proper consideration and adopting policies which produce the optimal balance among them.
According to the stakeholder theory, it asserts that, regardless of whether stakeholder management leads to improve financial performance, Unilever, as a company should manage the business for the benefit of all stakeholders. Hence, in its normative form, the stakeholder theory does imply that businesses have true social responsibilities. Unilever as an enterprises have its responsibilities towards its stakeholders. This theory also holds that management’s fundamental obligation is not to maximize the firm’s financial success, but to ensure its survival by balancing the conflicting claims of multiple stakeholders.
This obligation is to be met by acting in accordance with two principles of stakeholder management. The first, called the principle of corporate legitimacy, states that the corporation should be managed for the benefit of its stakeholders. The second, called the stakeholder fiduciary principle, states that management bears a fiduciary relationship to stakeholders and to the corporation as an abstract entity.

3.1.3 The Social Contract Theory
The social contract theory asserts that all businesses are ethically obligated to enhance the welfare of society by satisfying consumer and employee interests without violating any of the general canons of justice. This theory is based on the traditional concept of a social contract, an implicit agreement between society and an artificial entity in which society recognizes the existence of the entity on the condition that it serves the interests of society in certain specified ways.
The normative social contract theory of business ethics takes much the same approach toward deriving the social responsibilities of businesses. It begins by imagining a society in which there are no complex business organizations, and proceeds by asking what conditions would have to be met for the members of such a society to agree to allow businesses to be formed. The ethical obligations of businesses toward the individual members of society are then derived from the terms of this agreement. Thus, the social contract theory posits an implicit contract between the members of society and businesses in which the members of society grant businesses the right to exist in return for certain specified benefits.

3.2 Triple Bottom Line
The triple bottom line which abbreviated as TBL or 3BL is known by its famous three pillars, which are people, planet and profit, as fully explained by John Elkington in 1997. The triple bottom line captures an expanded spectrum of values and criteria for measuring organizational success, including the economic, ecological, and social. The triple bottom line expands the traditional reporting framework to take into account social and environmental performance as well in addition to financial performance. The three pillars of people, planet, and profit by its literal order clearly describe that profit is not the number one objective of a company. On the other hand, in today’s business, many major corporations have shifted its vision and mission as well as the company’s strategy to put first and foremost of people and planet above profit. The triple bottom line has a goal to achieve sustainability in the business operations.

3.2.1 People
People determine success of business. Therefore, when an organization adopts a triple bottom line approach to their strategic planning, it is by default that all aspects of its human resources, both internal and external, are needed to be greatly enhanced.
Unilever as a company, in relation to the triple bottom line, especially in the people pillars need to think about the impact of its actions on all the people involved with the company. This can include everybody from its palm oil suppliers, the local communities in Kalimantan, on up to the CEO of the company. Everyone’s well being needs to be taken into consideration.

3.2.2 Planet
Talking about the planet pillars in the triple bottom line principles, a good corporation takes pains to reduce or eliminate their ecological footprint. Unilever as part of the Roundtable on Sustainable Palm Oil or RSPO members has to strive for sustainability and endeavor to benefit the natural order as much as possible and do no harm as well as minimize environmental impact.

3.2.3 Profit
The financial bottom line is the one that all companies share. When looking at profit from a triple bottom line standpoint, the ideas is that profits will help empower and sustain the community as a whole and not just flow to the CEO and shareholders of the company.
According to the explanation of the profit pillars of the triple bottom line by John Elkington in his book “Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development,” in 1994, it is defined that every company must sustain the community as a whole and not just flow the profit earned by the company to the stockholders.

3.3 Environmental Issues of Business Ethics
People, as individuals, have the power to choose if they should respect environmental concerns. This is why, at a social or governmental level, people ought to be held responsible for what is right or wrong to the environment. Any harm caused by people to the ecological make-up of earth, living and non-living, is the result of ignorance. This ignorance, or to be fair unawareness, stems from a lack of moral concern applied to environmental issues.

There are many environmental moral issues relevant to business, as follow: * Ecology * Traditional business attitudes towards the environment * Problems involving environmental abuse * Environmental protection * Methods to pay for environmental protection * Other issues involving environmental ethics.
The importance of environmental destruction is recognized by every theory of justice and every moral theory. Destroying the environment often violates our right to non-injury and endangers the people’s health.

3.3.1 Business and Ecology
Businesses damage the environment when they take natural resources from the Earth and dispose of waste. All of this is done within the natural environment, a kind of ecological system or ecosystem. Ecology refers to the science of the interrelationships among organisms and their environments. The operative term is interrelationships, implying that interdependence exists all entities in the environment. Businesses have traditionally shown egregious indifference towards the environment.
Environmental protection was rarely seen as an issue. A company would harm the environment to whatever extent was profitable, and they often harmed the environment despite the fact that it was unwarranted to do so. People and corporations see the natural world as a free and unlimited good. This perception is very dangerous and damaging the natural resources. Many people perceive that the world’s resources could be taken without end and without any morally significant harm done. This action can hurt the world and eventually will hurt the people who live in it.

3.3.2 The Ethics of Environmental Protection
It is our job as a human being to protect the environment and its surrounding. However, on the other hand, we are often harming the environment and its surrounding instead by a numerous of reckless actions that is related to someone’s interest only. Many of the people and big corporations do not feel responsible for the environment. There are too many cases on environmental destruction in around the world and it is difficult to know how much harm a company’s environmental damage is worth. Therefore, a good corporation must apply the triple bottom line principles to their business of conduct and doing their business based on the code of ethics.

3.3.3 Who Should Pay the Cost of Environmental Damage
Most people think that either those who are responsible for environmental damage or those who benefit from it should pay the costs. In the case of environmental and orang-utans habitat destruction by Unilever and its suppliers, it is very clear that Unilever and its suppliers have harmed the rainforests, peatlands and the orang-utans habitat, therefore it is appropriate for them to pay the most to protect and restore the rainforests, peatlands and the orang-utans habitat.

3.3.4 Regulation
Agencies such as the Environmental Protection Agency or EPA sets environmental standards, which are then applied and enforced by those agencies, other regulatory bodies, and the courts. This regulations needs to be implemented by all companies to help reduce the environmental damage. With such regulations, companies that are caught cheating and violating the regulations can be fined.

3.3.5 The Value of Nature
A common assumption in business is that businesses only have obligations towards people and that nonhuman entities are not worth moral consideration. However, some philosophers challenge this notion. William F. Baxter agrees that only humans are worthy of consideration, but Holmes Rolston III believes that nature can have intrinsic value - be good just for existing and worthy of protection for its own sake. Some defenders of a naturalistic ethic think that people and corporations have a special obligation to protect each species from extinction to help protect the diversity of life. Therefore, it is obliged for Unilever to help protect the orang-utans and its habitat in Kalimantan and not do the other way around because when the company had a major expansion of the oil palm plantation and take away the world’s resources, it is harming and causing the death of the orang-utans who live in that habitat.

3.4 Ethical Issues
Ethical issue as defined by Mcgraw-Hill is an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. Many of big corporations in the past only thought that ethical issues are only a term to define rules and regulations that every related party must adhere or follow. However, in today’s business practices, every company, small or big, starts to realize that ethical issues mean more than that and play an important role in the business performances.
As quoted from Henry Ford, a renowned American industrialist, the founder of the Ford Motor Company, and sponsor of the development of the assembly line technique of mass production, he stated that, “a business that makes nothing but money is a poor business”. This statement is so powerful and as a reminder for every corporation to not weighing monetary profit against doing what is right and based on the appropriate business conducts.
Nowadays, doing business based on the code of conduct is a must. According to the research conducted by the institute of Business Ethics (IBE), there are benefits received by the organizations and businesses that act based on the appropriate business conducts and apply ethical values seriously.
Additionally, understanding the customers in today’s business, they are no longer blinded by the statement or promise of one’s brand. Customers nowadays are very smart and not easily influence by brand’s promises. They have various aspects that may be influence their buying decision and they are very critical about the product they wish to buy. Customers in today’s business are more demanding. An unsatisfied customer can hurt a business. Therefore, every business needs to implement business ethics in order to ensure that a certain required level of trust exists between customers and other related parties with the business.
As the world’s largest food, beverages, cosmetics, and biofuel companies, Unilever received a major step back or crisis when Greenpeace released ‘Cooking the Climate’ report, summarizing the findings of a two year investigation that revealed how the company were driving the wholesale destruction of Indonesia’s rainforest and peatlands through growing palm oil consumption. The report provides evidence of the expansion of the palm oil sector in Indonesia into remaining rainforests, orang-utan habitat and peatlands in Kalimantan. As the report stated, Unilever uses 1.3 Mt of palm oil derivative every year, which is about 3% of global production and half of the Unilever’s palm oil supply comes from Indonesia. This action has caused environment destruction and drives the orang-utans to the brink of extinction.

3.4.1 Environment Destruction
According to World Centric, an organization that was founded in 2004 with a mission to reduce economic injustice and environmental destruction through education, community networks, and sustainable enterprises - the planet’s natural ecosystems and regenerating bio-capacity are being severely degraded and, as a result, this compromises the ability of the planet to sustain life. Water, land and air are getting polluted, water tables are falling, soil erosion is leading to desertification, global warming is well underway, and species are dying out 1000 times faster than their natural rate of extinction. The world Centric, also mentioned facts about the forests destruction as follow: * We are losing forestland at a rate of 375 km2 each day. * The world has already lost 80% of its original forests. * billion acres of tropical forest were cleared in just thirty years, between 1960 and 1990. * At the world’s current rates, 5-10% of tropical forest species will become extinct every decade.
With all of the facts captured by World Centric, Unilever has partially given its contribution to the destruction of rainforests and peatlands in Central Kalimantan, Indonesia. Unilever, as a member and the president of Roundtable on Sustainable Palm Oil (RSPO) has failed to use its power to lead the palm oil sector toward sustainability. The company, on the other hand, continues its expansion on the oil palm plantation in Central Kalimantan that is driving the destruction of rainforests and peatlands. In addition to the destruction of rainforests and peatlands in Central Kalimantan, the aggresive expansion of the company was also resulting a devestation of the orang-utans habitat in Kalimantan
Kalimantan, the Indonesian portion of the island of Borneo, which it shares with Malaysia and Brunei, has some of Indonesia’s largest remaining areas of forest habitat. This is home to most of the world’s remaining orang-utans. While most current palm oil production is concentrated in Riau dan North Sumatera, oil palm group area rapidly expanding their landbanks and clearing new areas. The Greenpeace investigation reveals that much of the area which overlaps critical orang-utans habitat is being cleared of valuable forest, the peatlands drained and the land burned as oil palm plantation area expands. As orang-utans and other species lose their rainforests to oil palm plantations, they are deprived of their natural source of food. Seeking to survive off young palm plants, hungry orang-utans can become pests to oil palm producers, and plantation workers commonly kill orang-utans to protect the crop. According to the Centre for Orangutan Protection, at least 1,500 orang-utans died in 2006 as a result of deliberate attacks by plantation workers. The United Nations Environment Programme, also mentioned that orang-utan is classified as critically endangered and has an extremely high risk of extinction in the wild in the near future. Since 1990, orang-utans in Sumatera it thought to have fallen by about 91%.
The action of expanding the oil palm plantation area without understanding the impact on the surrounding environment and habitat has caught the attention of Greenpeace where more than 50 activists from Greenpeace staged protests against Unilever. Some of the activists from Greenpeace event dressed as orang-utans and stated their voice on how the company supplying palm oil are destroying the habitats of orang-utans and massively accelerating climate change.
Every people in the world believe that business should not only make profit but also consider the social implications of their activities. Unilever should conduct their business in harmony with the environment and its stakeholders. The company is and should be responsible for environmental friendly activities because the population growth of orang-utans and the rainforests around their business are at stake. Unilever must act based on the ethical business conduct and analyze its surroundings before deciding to expand its oil palm plantation area. It is very appropriate that Unilever spend a particular amount of money on the environmental procedures even though it takes away from shareholders because the company and its shareholders as well as other parties involved all have a responsibility to care about the environment and its surrounding first and foremost above all else.

3.4.2 Violating the RSPOs Principles
The Roundtable on Sustainable Palm Oil (RSPO) is a voluntary association of corporations and NGOs set up in 2002. In October 2007, it had nearly 200 members of food giants, including Unilever.
Unilever uses around 1.2Mt of palm oil every year, 130 about 3% of total world palm oil production. According to the Greenpeace report, Unilever is one of the biggest palm oil users in Europe. At the global level, Unilever is a major player in the palm oil trade and most of it comes from Indonesia and Malaysia. During the 12 month period from July 2003 to June 2004, Unilever bought approximately 570,000 tonnes of palm oil from Indonesia, more than 5% of the country’s production.
Palm oil is an important and versatile vegetable oil which is used as a raw material for both food and non-food industries. Oil palms are highly efficient oil producers, with each fruit containing about 50% oil. The trees can grow 20 meters tall with leaves up to 5 meters long. They bear clusters of fruit all year long, with each fully matured cluster weighing up to 50 kg. As a result they require ten times less land than other oil-producing crops (soy bean, rapeseed or sunflower). Vegetable oil production around the world totals over 144 million tons per year, of which over 47 million tons is palm oil. Along with soy oil, palm oil makes up 60% of world production. Palm oil and palm kernel oil are entirely GM (genetically modified) free. It contributes to the economic development of the producing countries and to the diets of millions of people around the world as mentioned by greenpalm.org.
Although oil palm is a more sustainable source of vegetable oil than other oil crops, there is concern that the growing demand of palm oil for food and bio fuel could lead to rapid and ill-managed expansion of palm oil production and result in serious environmental and social consequences. In response to the urgent and pressing global call for sustainably produced palm oil, the Roundtable on Sustainable Palm Oil (RSPO) was formed with the objective promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders. RSPO unites stakeholders from seven sectors of the palm oil industry; oil palm producers, palm oil processors or traders, consumer goods manufacturers, retailers, banks and investors, environmental or nature conservation NGOs and social or developmental NGOs to develop and implement global standards for sustainable palm oil.
RSPO has developed a set of standards called the Principles & Criteria (P&C) that define the practices for sustainable palm oil production. These standards address the legal, economic, environmental and social requirements of producing sustainable palm oil. RSPO’s Principles and Criteria (P&C) for sustainable palm oil production are based on these following principles: 1 Commitment to transparency 2 Compliance with applicable laws and regulations 3 Commitment to long-term economic and financial viability 4 Use of appropriate best practices by growers and millers 5 Environmental responsibility and conservation of natural resources and biodiversity 6 Responsible consideration for employees and for individuals and communities affected by growers and mills 7 Responsible development of new plantings 8 Commitment to continuous improvement in key areas of activity
The eight principles above apply not only to the producers of palm oil but to all stakeholder groups. This means Unilever and its suppliers, including Cargill, ADM-Kuok-Wilmar, Golden Hope, Sime Darby, Musim Mas, Astra Agro, Asian Agri and Sinar Mas must adhere and implement the RSPO principles on their production of palm oil.

3.4.3 Unilever Failure of Screening its Suppliers’ Code of Conduct
Unilever has failed to bring the rapidly expanding palm oil sector under control. The growth of the company’s global brands such as Dove has created a reason for Unilever’s suppliers to expand further more where it lead to the devestation of the rainforests and peatlands as well as the orang-utans habitat in Kalimantan. Unilever suppliers were driving species extinction and climate change in Kalimantan, Indonesia.
As stated in the Greenpeace’s investigation of the case, Unilever mentioned that the company did not acknowledge where the 20% of its palm oil comes from. Unilever only knows the remaining 80% of its palm oil supply which comes from its suppliers. However, the company did not necessarly understand where is the palm oil originated.
Based on the investigation conducted by Greenpeace, it is clearly shown that Unilevers traders were dealing with bad companies. Many of the largest producers in Indonesia that supply Unilever directly are also traders. This means that a significant portion of the palm oil they sell may come from other third parties as well as their own operations. This also made the identity of groups heavily reliant on deforestation and peatland clearance is lost in the supply chain. This producer-traders include Sinar Mas, IOI, ADM-Kuok-Wilmar, Sime Darby, Musim Mas, Asian Agri, and Cargill.
Unilever has failed to conduct a complete background check or screening of their suppliers. This failure has made Unilever to engage with suppliers who were related to the deforestation and peatland degradation which linked Unilever to the environment destruction ad RSPO principles violation, as well as company’s crisis as results.

3.4.4 Government Neglect of the Environment Issue
Oil palm plantation only takes place with minor oversight from central or local government. Procedures for environmental impact assesment, land-use planning and ensuring a proper process for development of concessions are neglected. According to the Greenpeace report, it is stated that many new plantations are located on peat that should be off-limit to development or degradation according to the Indonesian law. This stipulate that land should not be allocated for oil palm plantations on peat soils deeper than 2 metres. In addition, activities that damage upstream natual swap forests with deep peat with more that 3 metres are prohibited. This shows that palm oil development on such peatlands is illegal. The report has documented such clearance on concession belonging to Unilever suppliers. The suppliers use fire to clear forest areas which has been acknowledged as an illegal action in Indonesia since 1999, yet remain commonplace among palm oil producers and there has been no further action performed by the Indonesian goverment to prevent or put the company who violated into justice.

CHAPTER 4
CONCLUSION AND RECOMMENDATION

As an Anglo-Dutch multinational corporation, Unilever has had a commitment on Corporate Social Responsibilities (CSR). The CSRs themselves define as the responsibilities of an organization toward the society to meet the standard of ethic towards investors, customers, employees, business partners, local communities, the environment and society at large. (Berkhout 2005). Finding the above issues and problems which are occurred in their supplier, it seems it hit their commitment, and furthermore, it also does not reflect their commitment as a chair of Roundtable on Sustainable Palm Oil (RSPO).
Moreover, based on the above theories which are stockholder, stakeholder theory and social contract theory, it did show that the Unilever has responsibilities to the following obligations which are as follows: 1. Unilever needs to benefit: its customers, suppliers, owners, employees, and the local communities. The rights of these groups must be ensured and, further, the groups must participate, in some sense, in decisions that substantially affect their welfare. 2. Unilever must act in the interests of the stakeholders as their agent, and it must act in the interests of the corporation to ensure the survival of the firm, safeguarding the long-term stakes of each group. 3. Unilever is ethically obligated to abide by both the social welfare and justice terms of the social contract. Clearly, when fully specified, these terms impose significant social responsibilities on the company.

By looking into the triple bottom line which has been analyzed in the previous chapter, Unilever should also balance these three aspects between people, planet as well as profit. Firstly, Unilever needs to provide and offer health care, good working hours, a healthy, safe place to work, opportunities for advancement and education, does not exploit their labor force, and the local community where the business operates. Secondly, Unilever needs to look at the entire life cycle of their actions and try to determine the true cost of what they are doing in regards to the environment and its communities. They need to reduce their palm oil plantation expansion and start to re-plant the rainforests and safe the habitat of the orang-utans to prevent the species from extinction. Lastly, Unilever should implement the corporate social responsibility of doing well by doing good. Understanding the amount of profit obtained by Unilever, it becomes appropriate that the company allocate a particular amount of budget for the improvement on the damage occurs in the rainforest and habitat of orang-utans in Kalimantan. It is a must for a big corporation, such as Unilever to give back to the community and provide a contribution to the environment. Unilever, especially in its Dove product penetration has caused a lot of rainforests and orang-utans destruction due to its oil palm plantation expansion areas in which overlapping with the habitat of orang-utans. Unilever has a responsibility to care and sustain the environment and its surrounding where the business is located. Also, Unilever must allocate a particular amount of budget for the improvement on the damage occurs in the rainforest and habitat of orang-utans in Kalimantan. The company needs to sustain the environment and its surroundings.
Because of the findings, the Unilever is well-known has guidelines in selecting their business partners or suppliers are most likely responsible on this finding. It shows the damages are indirectly created by Unilever during the process of the product manufacturing. It is clear that the weakness of their quality control when selecting their suppliers although most of their suppliers are also a member of the RSPO, and they do not study the suppliers such as where the raw materials is coming from, which plantation they are using, how their efforts to avoid over deforestation and peat land clearance, etc.
The social performance of Unilever definitely reflects a result of how their awareness is on the environment sectors which is to reduce environmental impact. They only focus on having a maximum profit without considering the effects of mishandling the strategy/decision related to Corporate Social Responsibilities which should be balance. However, after receiving the findings from Greenpeace, Unilever is quickly responding the problems by taking some actions which are as follows (based on Greenpeace website): 1. For long term plan, they plan to get certified the palm oil from their own plantations as well as from their suppliers in order to meet the criteria. They committed to buy all of its palm oil from certified sustainable sources by 2015. In April 2012, Unilever released a report on the progress made with its sustainable living plan. The company reported that it would achieve its goal of 100% certified sustainable palm oil by the end of 2012, three years ahead of schedule. 2. On short term plan they extremely take the action by stopping the trading with respective suppliers who continue destroying the rainforests and take an immediate moratorium on deforestation. To accelerate the process, the company has agreed to lobby the Indonesia government to support the immediate moratorium and to use its leadership role within the industry to aggressively build a coalition of companies to support the moratorium.
Given this incident, it is recommended if the company should start using a high quality control by double check the environmental sustainability aspects of the business partners prior to the contract signing with the main goal to avoid supporting conduct done by unethical business partners. The following recommendations can be considered in terms of avoiding the unethical business in place. However, this recommendation is not only for Unilever but also for other companies who can keep them from environment and social negative impacts.
They are as follows: 1. Any doing business must be based on the code of conduct. 2. Every business needs to implement business ethics in order to ensure that a certain required level of trust exists between customers and other related parties with the business. 3. Apply the eight RSPO principles in any type of business. 4. Companies should study the background of their suppliers, for example, the source of the raw materials, the certification from RSPO, etc. 5. Companies should do a research in terms of the environment and social impacts and aspects.
By applying the above recommendations, the process of manufacturing will be conducted without any problems which can hit the image of the company. Nowadays, most of non-profit organization has no doubt to take an action to overcome the problems or issues of which can harm or provide a negative impact to the environment and social aspects.

Appendix 1
Climate and Biodiversity Impacts of Unilever Palm Oil Suppliers in Kalimantan

Appendix 2
Dove Onslaugt(er) Video Capture

Appendix 3
Picture of People Support on the Greenpeace Campaign

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