In 2018, many people were calling for a ban on the use of palm oil, but two years on, demand for it continues to grow. Andy Green, Business Development Director at BM TRADA, discusses how the supply chain can help to make the world’s most consumed vegetable oil viable and sustainable.
There are many significant misconceptions regarding palm oil. When cultivated properly, palm is sustainable, super-efficient, and offers many social benefits in terms of employment and capital. It has extremely good properties - it has a high yield; it is harvested by people rather than machines; and it has low waste.
The issues linked with palm oil relate to modern slavery, land grabbing and deforestation, which impacts wildlife habitat, including endangered orangutan populations. The problem with palm oil is man.
Palm oil can be found in about half of all packaged products in the supermarket. If it is banned, manufacturers will need to look for alternative ingredients, which would increase the problem rather than solve it.
The most obvious replacement for palm oil is rapeseed, but this is a much less efficient plant, requiring significantly more space to harvest. In terms of scale, the land space needed to meet the world’s palm oil needs is roughly the size of Spain; whereas the space needed for the equivalent amount of rapeseed oil is the size of Canada.
It is impossible to sustain the global requirement without palm oil, but if the issues around it are not dealt with properly, it could drive the orangutan into extinction.
Solving the problem
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 established in 2004 by several parties, including the World Wildlife Fund for Nature, and has taken on the task of solving this issue. The RSPO seeks to protect the environment for the orangutans and other species at risk of extinction. They are not looking for the removal of palm oil, but for it to be properly cultivated. Organisations can support this by certifying all products containing palm oil, to the RSPO standard.
The RSPO’s definition of sustainable palm oil limits High Conservation Value (HCV) forest clearance and prohibits burning in its cultivation. The welfare of local communities must be safeguarded, and employees must be offered fair working conditions.
For the palm oil to be certified, each stage of the supply chain must be certified. This includes the plantation, mill, the crude oil refinery, the oil itself, 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 and derivatives of the palm in the product, which tends to be a narrow part of the business stream. This usually means that very few changes are required.
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.
For businesses wanting to offer a sustainable product, act against modern slavery and protect biodiversity, this very simple certification process is crucial.
As more and more consumers expect organisations to take their environmental responsibilities seriously, and high stakes on the line in terms of wildlife and communities, can any business afford not to?
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