In 2018, many people were calling for a ban on the use of palm oil, but four years on, demand for it continues to grow. BM TRADA discusses how the supply chain can help to make the world's most consumed vegetable oil viable and sustainable.
What is Palm Oil?
Palm Oil is a vegetable oil that comes from the fruit of oil palm trees (Elaeis guineensis). The oil regularly appears in two forms, crude palm oil and palm kernel oil. Crude palm oil is derived from the fruit's flesh, whereas palm kernel oil is extracted from the stone found in the centre of the fruit.
Oil palm trees are native to Africa but were brought to South-East Asia just over a century ago. This introduction has led to Indonesia and Malaysia producing over 85% of the global supply, but 42 other countries also produce palm oil.
This extremely versatile oil has many different properties and functions that make it useful and widely used within food, cosmetics, cleaning products and some biofuels.
The oil is unlike any other on the current market; it is semi-solid at room temperature, so it can keep food products spreadable, resistant to oxidation, giving products a longer shelf-life, stable at high temperatures - which helps to provide fried products with a crunchier texture. The oil is also odourless and has no colour, meaning its use in cosmetics and food does not impair the development in any way.
As well as being extremely versatile, compared to other vegetable oils, the oil palm is a very efficient crop and can produce high quantities of oil within small areas of land year-round. This makes it an ideal and attractive crop for growers and smallholders, who can rely on the steady income that palm oil provides.
What are the issues surrounding Palm Oil?
Issues such as deforestation, damage to wildlife, damage to local communities, and unfair/minimal labour rights are far from uncommon within agriculture. Still, these impacts hold significant weight when considering palm oil production, particularly when the process is unsustainable.
1) Human rights and social standards
The social issues relating to palm oil production have proven particularly difficult to navigate and identify; issues may include:
- Conflicts over land and rights
- Questions around the status of migrant workers
- Undocumented and unpaid women labour
- Deceptive recruitment
- Poor working conditions
- Child labour
Oil palm expansion is a significant driver of deforestation and degradation of natural habitats in tropical Asia and Central and South America, falling behind cattle ranching and local and subsistence agriculture. On the island of Borneo, at least 50% of all deforestation between 2005 and 2015 was related to oil palm development.
Deforestation in this context is defined as the loss of natural forest as a result of:
- conversion of forest to agriculture or other non-forest land use
- conversion to a plantation forest
- severe and sustained degradation.
According to the European Commission, palm oil production contributes to 2.3% of global deforestation.
3) Damage to wildlife
This deforestation paired with mono-crop plantations has slashed habitats and irreparably damaged areas with previously extremely high rates of biodiversity. Leading to the endangerment animals such as the Bornean and Sumatran Orangutan, the Sumatran Elephant, Bornean Pygmy Elephant, Sumatran Rhino and Sumatran Tiger.
What is the solution?
So how do we meet demand while ensuring that the environment, wildlife and locals are protected? The answer is certification.
The Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004 to promote the growth and use of sustainable oil palm products through credible global standards and the engagement of stakeholders.
The RSPO is a not-for-profit, international membership organisation that unites stakeholders from the different sectors of the palm oil industry. Their reach covers oil palm producers, palm oil processors or traders, consumer goods manufacturers, key stakeholders, retailers, banks and investors, environmental or nature conservation NGOs, and social or developmental NGOs.
The RSPO's definition of sustainable palm oil production limits clearance and prohibits slash and burn techniques during its cultivation within High Conservation Value (HCV) forest and High Carbon Stock (HCS) areas. Both are vital in sequestering the large amount of carbon we produce worldwide. In turn, the welfare of local communities must also be safeguarded by the business or organisation operating there, and employees must be offered fair working conditions.
Certifying Palm Oil
For palm oil to be certified, each stage of the supply chain must be certified. This includes the plantation, mill, crude oil refineries, the manufacturers, and anyone who takes legal ownership of the palm oil and physically handles it through to the end-user. They all need to be individually audited by an independent RSPO-accredited certification body. As each stage is certified, there is an obvious paper trail, and the certification can easily be traced back through suppliers.
The good news for the supply chain is that the process is relatively straightforward. The certification focuses purely on the palm, its fractions, and its derivatives, which tend to be a narrow part of the business stream.
Businesses who would like to be RSPO certified are first vetted and accepted as members of the RSPO, then they must put in place an 'internal control system', and finally, they are audited. During the audit – which usually only takes one day - auditors will confirm production processes are adequate, approve documentary records and check the accuracy of sales and marketing literature. If there are no non-compliances, certification is issued shortly after. The certification lasts five years, with annual surveillance audits.
This straightforward certification process is crucial for businesses who want to begin offering a sustainable product, acting against human rights issues, deforestation and protecting biodiversity.
As more and more businesses and clients expect the organisations they partner with to take their environmental responsibilities seriously and high stakes on the line in terms of wildlife and communities become increasingly apparent, can any business afford not to?
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