Certificate system enables more support for sustainable palm oil
Imported by Aarhus Karlshamn UK (AAK) – which is both a trader and a processor – the oil in the shipment originated from United Plantations in Malaysia and is destined for AAK’s refinery in Hull, UK. Amongst the food and consumer good firms to have bought some of the oil shipment are Unilever and Sainsbury’s.
The first batch is 500 tonnes – a small share of 38m tonnes of the commodity grown in plantations each year and used in about half of all consumer products, including many foods, detergents and soaps.
Jan Kees Vis, president of the Roundtable on Sustainable Palm Oil (RSPO) and director of sustainable agriculture at Unilever told FoodNavigator.com that more is available but future shipments will depend on demand from Europe.
But he explained that there are two ways in which manufacturers can support sustainable palm oil production:
They can buy oil that has been sustainably produced (identity preserved) and/or kept separate from other palm oil throughout the entire supply chain (segregated). In this case, the user pays a premium and is allowed to claim use of sustainable palm oil on the packaged of the finished product.
However not all of the palm oil produced according to the sustainable principals is kept separate from regular palm oil and sold as ‘sustainable’. This means that the miller received the regular price, not the premium price.
Palm oil users can still support the mills operating sustainable practices, though, by purchasing sustainable palm oil certificates from them. These currently trade at between US$40 and $50 each, and represent one tonne of oil each.
The certificate-holding user then sources its palm oil requirements through their normal supply chain. Since the certificate is not tied to a batch, the actual oil received does not necessarily actually contain sustainable oil; thus, the user can claim to support sustainable palm oil production to a percentage of that used in the product, but they cannot actually claim their products contain sustainable palm oil.
Kees Vis agreed that the certificate scheme could be seen as an intermediate step towards full sustainable sourcing.
“You would expect that, as the volume builds, more companies would buy sustainable oil,” he said – but added a note of caution that “what you expect is not necessarily what will happen”.
If all the mills entered into the programme eventually receive certification, from 2009 a total of 1.5m tones of sustainable palm oil could be expected by the market.
RSPO projects that supply will double in 2009 and continue to grow thereafter.
Despite the arrival of the first shipment marking “a small but significant step” towards total sustainability of all the world’s palm oil, according to Kees Vis, the event has not been without its controversy.
Greenpeace has hit out at United Plantations, claiming that it is not adhering to sustainable practices at its plantations in Indonesia by cutting down trees that are the home to endangered orangutans.
United has refuted the allegations.
Greenpeace is not one of the more than 20 NGO members of the RSPO.