Against the Clock: The Palm Oil Problem

Posted by Lucy Haines on 17-Apr-2018 16:13:39
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Palm oil is once again a hot topic in sustainability with the announcement by Iceland that they will stop using Palm Oil in all their own brand food by the end of this year. This has possibly been spurred on by a recent report by Greenpeace entitled, ‘Moment of truth’. The publication claims that firms are unlikely to meet their pledges on eliminating deforestation from palm oil production. Pressure is mounting for organisations to act as the charity takes aim at those failing to display transparency on the matter, with no qualms about naming and shaming.

In 2010 members of the Consumer Goods Forum made a promise to clean up the palm oil supply chains and achieve zero net deforestation by 2020. Less than two years left to come good on this commitment, and with a rush for bio-fuels creating a surge in demand and high deforestation rates persisting, it seems time is running out to meet this goal.

Why is Palm Oil a problem?

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Palm oil is an edible vegetable oil derived from oil palm fruits. Oil palms are highly efficient providing the largest yield with the lowest land use compared to other oil sources. Hence, they are the most widely grown fruit and vegetable crop. Palm oil and palm kernel are also very versatile being a staple ingredient in a great many cosmetics, food products and biofuels. However, such widespread production is having a detrimental effect on the environment, and the complex supply chains often make it difficult to trace the impacts of palm oil sources.

Rainforest Destruction and the Loss of Habitat and Biodiversity

Palm Oil production poses a great risk to tropical rainforest in parts of the world like Asia (predominantly Indonesia and Malaysia) and Africa where it is cultivated. 24 million hectares of rainforest were lost between 1990 – 2015, and in the last three years it is estimated that 146 football fields of rainforest were destroyed every hour. This destruction is driving large animal populations into pockets of natural habitat, increasing competition for food and destroying genetic diversity. The Orangutan has become a symbol of this plight and reports state that over 100,000 orangutans have been lost in Indonesia in the last 16 years alone.

Climate Change

Rainforests and peat-lands also store more carbon per unit area than any other ecosystem in the world. When they are cleared for palm oil– often through deliberate forest fires – significant amounts of greenhouse gases and carbon dioxide are released. Consequently, as valuable carbon sinks, forests and peat-lands play an essential role in meeting the international commitments of the Paris Agreement.

Forest communities and human rights

Environmental issues are often intertwined with human rights issues and the rapid expansion of palm oil plantations is without exception, posing an existential threat to local forest communities. Many are without land, water, or adequate livelihood because of excessive and illegal land grabbing. Not only this, but the pollution from fires to clear forests is also said to be responsible for tens of thousands of premature deaths.

Organisations are being urged to implement strong ‘no deforestation, no peat, no exploitation’ (NDPE) policies to address each of these critical problems and to embed them into their sustainability commitments as well as commit to palm oil certification schemes.


What have we been doing about it?

In 2004, the Roundtable on Sustainable Palm Oil (RSPO) was founded to promote the production and use of sustainable palm oil. This remains the most prominent certification body for sustainable palm oil. There are now more than 3000 members worldwide.

RSPO members include oil palm growers, processors, and traders, consumer manufacturers, NGOs, banks/investors, and retailers. The RSPO audits its members and those that pass are allowed to either sell RSPO certified products or Certified Sustainable Palm Oil (CSPO)

There are three supply chains from which CSPO can be sourced, depending on a company’s degree of commitment:

The Book and Claim System (aka Greenpalm)
 
CSPO producers convert their oil into certificates. Palm oil users purchase these certificates to offset their physical oil. This is the cheapest system source CSPO, but also the least traceable.
Mass Balance System
 
This mixes certified and non-certified palm oil. This system is more expensive to implement and produces costlier CSPO but has more traceability.
The Segregated System
 
This requires CSPO to be physically separated from non-certified palm oil throughout the whole supply chain, ensuring that the end product contains CSPO. It is most expensive to source and implement, but with greatest traceability

Since the founding of the RSPO, requirements for certification are regularly updated and public pressure to account beyond certifications is mounting posing a significant challenge to organisations looking to clean up their supply chains and keep up with the shifting landscape.


Is there such thing as verifiable sustainable palm oil?

A spotlight has now been shone on the problems of ensuring traceability and accountability in these systems. Richard Walker, the MD of Iceland has stated “Until Iceland can guarantee palm oil is not causing rainforest destruction, we are simply saying ‘no to palm oil...We don’t believe there is such a thing as verifiable ‘sustainable’ palm oil available in the mass market, so we are giving consumers a choice for the first time.”

However, there are now many other organisations on the ground developing new methods of improving transparency including The Forest Trust (TFT), The Nature Conservancy, and The High Carbon Stock Organisation to name just three. The latter have developed a methodology that classifies areas of land on the basis of carbon and biodiversity values using satellite data and ground survey measurements. They identify six land classes: High Density Forest; Medium Density Forest; Low Density Forest; Young Regenerating Forest; Scrub; Cleared/Open Land. It is hoped that increasing implementations of this method by suppliers will enable more visibility in the system and clarity on what lands require protection.

Challenges also exist for many companies wanting to purchase 100% segregated sustainable palm oil, but finding that there simply isn’t enough on the market and they are forced to purchase Mass Balance palm oil instead, or they are outbid by larger corporations creating legitimate concerns that smaller companies are priced out of the market or that the complications of the system make it unfeasible for them to invest the resource.


Whether the continual work of certification bodies, the urgent pressure from charities and NGOs, and the bold pledges of some businesses will be enough to solve the Palm Oil problem and halt deforestation before it’s too late it's difficult to tell. But it's clear we are now against the clock.

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Topics: Palm Oil, supply chain, emissions, deforestation

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