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Sustainable palm oil: GreenPalm, RSPO, Kellogg, PepsiCo, under fire as NGO takes aim at ‘Snack Food 20’

By Elaine Watson+

12-Sep-2013

RAN: 'Companies who want to purchase only responsible palm oil must adopt independent global palm oil procurement policies that go above and beyond the standards of the RSPO.'
RAN: 'Companies who want to purchase only responsible palm oil must adopt independent global palm oil procurement policies that go above and beyond the standards of the RSPO.'

A new report from Rainforest Action Network says food giants supporting "weak" and "diluted" Round Table on Sustainable Palm Oil (RSPO) standards or buying GreenPalm certificates are kidding themselves if they think this will save the rainforests. But the RSPO says “disparaging innovative and strategic market solutions” such as GreenPalm is not the answer.

In a 40-page report entitled Conflict Palm Oil: How US Snack Food Brands are Contributing to Orangutan Extinction, Climate Change and Human Rights Violations , the RAN takes aim at 20 firms including PepsiCo, Kellogg, Campbell Soup, ConAgra Foods, Mars and General Mills.

Most of the firms on the list are RSPO members that have made commitments to source only fully traceable certified oil, buy GreenPalm certificates (which guarantee that a tonnage of oil equivalent to the tonnage they use has been produced from RSPO-certified plantations), or mass balance (a mix of RSPO certified and regular) palm oil, by 2015 or 2020.

‘The term RSPO sustainable palm oil has been diluted’

But “companies who want to purchase only responsible palm oil must adopt independent global palm oil procurement policies that go above and beyond the standards of the RSPO”, argues the RAN.

The RSPO standards still permit planting on peatlands and cleared ‘secondary’ forests - many of which contain as much carbon and wildlife as ‘primary’ forests protected under RSPO standards, claims the RAN, noting that “expansion on peatlands exploded to reach 5.1 million acres in 2010”.

“The term RSPO sustainable palm oil has been diluted by association with the weak certification standards of the RSPO and further diluted by the many companies who buy GreenPalm certificates (which provide small monetary support to producers following the RSPO standards), rather than buying segregated RSPO-certified palm oil (which is sourced from a known RSPO certified producer and is not mixed with controversial sources at any point in the supply chain).

“These companies can then put the GreenPalm logo on their packaging and websites to make the palm oil in their products appear sustainable, but in reality the company still buys conflict palm oil and pays a very low fee to ‘offset’ their palm oil use.”

Mass balance claims ‘little more than a green-washing tactic’

RAN: 'Global companies are demanding cheap palm oil to use in their products while asking few questions about where it comes from'

Meanwhile, firms that use mass balance oil and shout about it on pack are employing “little more than a green-washing tactic to the point that ‘sustainable palm oil’ is no longer a useful term to distinguish good palm oil from bad”, it claims.

It adds: “If enough people call on the Snack Food 20 to adopt responsible palm oil policies, they will listen and start demanding traceable palm oil from their suppliers that does not contribute to deforestation, expansion on carbon-rich peatlands or human and labor rights violations.”

GreenPalm: Complexity in the supply chain is grossly underestimated

But Bob Norman, general manager of the Book & Claim (GreenPalm) scheme, told FoodNavigator-USA that GreenPalm was always intended to be an interim step to achieving a fully traceable physical supply chain for sustainable palm oil.

And while some refiners are vertically integrated, most are not, making it easier said than done for companies to just start buying segregated palm oil and derivatives as the RAN report suggests, he said.

GreenPalm links manufacturers to certified growers who don’t have a route to the US market, so cannot be supported by segregated supply chain options

Bob Norman: GreenPalm links manufacturers to certified growers who don’t have a route to the US market, so cannot be supported by segregated supply chain options

Most palm oil originates from multiple plantations and is intermingled at every stage of the supply chain. And the challenges of segregating oil from RSPO plantations throughout this chain are significant. As a result, certified sustainable versions of palm kernel oil or some more complex palm derivatives used by many food manufacturers are either not available at all or prohibitively expensive, he said.

 “Complexity in the supply chain is grossly underestimated, fractions, derivatives and palm kernel oil make traceable segregated extremely difficult if currently possible at all.”

GreenPalm only route to sustainable market for many smallholders

Indeed, GreenPalm was created to address this complexity and provide a way of driving sustainable palm oil production at source, he claimed: “GreenPalm links manufacturers to certified growers who don’t have a route to the US market, so cannot be supported by segregated supply chain options.

“Smallholders are a great example, they make up at least 30% of production in Indonesia & Malaysia and up to 70% in other growing regions. GreenPalm is their only route to market to be supported.”

“Sustainable production at origin is key. Get to a point where all growers produce to the RSPO standard and all the supply chains become redundant.”

As for the RSPO, it's global, and it “represents the best standard we currently have”, said Norman. If you want to change things, he said, “become a member, make a difference, have your voice to support and improve it”.

Cargill: Our goal right now is mapping out our supply chain

Cargill: Our goal right now is mapping out our supply chain. We’re starting in Malaysia where we have a bit more control and then we’re looking to do the same in Indonesia, at least at one port

Cargill - which says all palm oil it supplies to Europe, the US, Canada, Australia and New Zealand will be RSPO-certified by 2015 (2020 for other markets) - is also singled out for particular criticism in the RAN report.

However, in a recent interview with FoodNavigator-USA, product line manager for tropical oils Mohit Gupta said that encouraging smallholders that it’s worth their while to get RSPO-certified is not as easy as it looks, and while firms such as Cargill are huge, they operate in a complex global supply chain. 

“If you are running a small plantation in the heart of Kalimantan [in Indonesia] and you’re not close to a port where there’s demand [for RSPO-certified oil], the extra cost of getting it to a place where you are going to get a premium might not be worth it.”

At Cargill, the focus now is mapping its supply chain so it can see exactly where the oil it ships out is coming from, he added.

For example, while Cargill has refineries in Malaysia, it has no plantations there, and the oil it processes comes from scores of plantations and is co-mingled at every stage of the supply chain before it is shipped on to China, Brazil and the US (where the demand for sustainable products is patchy at best).

A protest at Chicago’s Board of Trade on Thursday morning named the 20 snack food companies that the Rainforest Action Network's campaign to promote responsible palm oil sourcing policies will focus on

Similarly, while Cargill owns plantations in Indonesia, it has no refineries there, and the oil it ships from Indonesia - which is from multiple other plantations as well as its own - might end up in Europe (where there is demand for sustainable palm oil), or India (where most buyers are not bothered), said Gupta.

 “Our goal right now is mapping out our supply chain. We’re starting in Malaysia where we have a bit more control and then we’re looking to do the same in Indonesia, at least at one port.”

Our goal right now is mapping out our supply chain

Unilever buys GreenPalm certificates to cover all of its palm oil usage now, but has set a goal of buying all of its palm oil from traceable sources by 2020.

The aim will then be to incentivize those along the chain to get RSPO certified. “We believe in the principal of inclusion, not exclusion”, added Gupta, who says Cargill is encouraging all of its suppliers to gain RSPO certification and continues to work with smallholders to help them increase yields sustainably.

Cargill also has policies in place for responsible palm production on all of its own plantations including commitments to not plant on high conservation value forests; to not develop new plantations on deep peat land or land that would threaten biodiversity; and a strict no-burn policy for land preparation, said a spokesman this morning.

“We are making progress and we are partnering with the Forest Trust to help gain greater insights into our operations and to enable us to better meet our customers’ needs for assurances on the sources of their palm oil.”

RSPO: The RSPO acknowledges GreenPalm as a necessary transitional option

The Roundtable on Sustainable Palm Oil (RSPO) said it welcomed scrutiny of its standards, but said that “disparaging innovative and strategic market solutions that are committed to continuous improvement and enhancement will undoubtedly create market confusion and only further delay any positive market transformation”.

It also rejected RAN’s claims that GreenPalm is a barrier to market transformation, adding: “The RSPO acknowledges GreenPalm as a necessary transitional option in mobilizing the market to fully migrate from non-certified palm oil eventually to fully traceable certified sustainable palm oil.”

Palm oil - produced from the fruit of the oil palm - is used as a frying oil in many parts of Asia and goes into a wide range of foods and cosmetics globally. One of the world's highest-yielding sources of vegetable oil, its expansion has however driven large-scale deforestation across Southeast Asia.

NGOs play important part in crystallizing clear routes that the sector can take

It added: “The RSPO principles and criteria and code of conduct include a wide range of environmental and social issues, which mandate the use of free, prior and informed consent to develop new plantings on local peoples’ land, where it can be demonstrated that there are legal, customary or user rights."

While the RSPO believes big firms in the Snack Food 20 can drive change, it added: “Internal procurement policies by companies will enable sector transformation only if it is in concomitant to an inclusive, international multi-stakeholder certification standard audited by third parties through a rigorous process.”

The 'Snack Food 20 are:  Campbell Soup, ConAgra Foods, Dunkin’ Brands, General Mills, Grupo Bimbo, Hillshire Brands, Heinz, Hormel Foods, Kellogg, Kraft Food Group, Krispy Kreme, Mars, Mondelez International, Nestlé, Nissin Foods Holdings. PepsiCo, Hershey, J.M. Smucker, Toyo Suisan Kaisha and Unilever.

Click here to read the full report from the RAN.

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