sustainable palm oil

Woolies first SA company to commit to sustainable palm oil

Woolworths has become the first South African company to become a member of the Roundtable on Sustainable Palm Oil. It has publicly committed to using palm oil derived from sustainable sources in the production of its toiletries and foods – but only by 2015. The timeframe implies the enormity of the task.

More than 50% of packaged consumer products contain palm oil in some form. It’s found in everything from margarine and cooking oil, to chocolate, ice cream, and thousands of toiletries and cosmetics.

Worldwide, some 47m tons of palm oil is used annually. Most of it – over 80% – is produced in Malaysia and Indonesia. A little is produced in Africa, from where the crop originally hailed. And demand is outstripping supply.

Environmental groups like Greenpeace and the WWF regard the growing demand for palm oil as a danger to the health of the planet. Between 1967 and 2000 the area under cultivation in Indonesia expanded from less than 2000 km² to more than 30 000 km², according to the Economist magazine. Deforestation in Indonesia for palm oil and illegal logging is so rapid that a report in 2007 by the United Nations Environment Programme said most of the country’s forest might be destroyed by 2022.

In Sumatra and Borneo, palm-oil expansion threatens elephants, tigers and rhinos, as well as critically endangered orangutans.

Climate change is also an issue. Oil palm trees are grown most often on newly cleared rainforest or peat-swamp forests rather than on already degraded or abandoned agricultural land.  Peat bogs store great quantities of carbon which is released when the forests are cut down and the bogs drained to make way for plantations.

South African companies and consumers, inwardly focused on a myriad of local challenges, may be inclined to dismiss the plight of Indonesian rain forests as ‘not our problem’ and Woolies efforts as a publicity stunt. This would be short sighted.

Last year, SA producers imported some 420 000 tons of palm oil. And this is set to increase. “The thing that we forget,” says Tatjana van Bormann, coordinator of the WWF’s GreenChoice Programme, “is that our retailers, and their suppliers are part of the global supply chain”.

Along with its membership of the Roundtable on Sustainable Palm Oil (RSPO), Woolies has committed to buying certified sustainable palm oil certificates for the tons of palm oil it uses. By buying these Green Palm certificates Woolworths is contributing to RSPO efforts to incentivise Indonesian and Malaysian palm oil producers to become certified sustainable producers. The retailer has also undertaken to replace palm oil with alternatives where possible to using only certified sustainable palm oil by 2015.

Formed in 2004, the RSPO brings together stakeholders from the palm oil industry, as well as retailers, banks and investors, and environmental or nature conservation organisations in a bid to prod the industry into producing “sustainable” palm oil, which means not destroying areas of high conservation value.

Its efforts have gained traction slowly. Currently just 6.3% of global palm oil is produced sustainably.

But big producers and suppliers are getting on board and are paying attention to the distant reaches of their supply chains. Unilever, the world’s biggest purchaser of palm oil is a member of RSPO. As is Nestle which was attacked in a spoof online advertisement that showed an office worker eating a finger of KitKat. Shockingly the chocolate piece turned out to be the bloody digit of an orangutan. The video has been viewed 1.5m times and prompted 200 000 e-mails of protest.

Local FMCG companies like Willowton Oil, the largest privately owned soap manufacturer and a leading producer of cooking oil and margarine; Epic Foods, which produces Blossom and Canola margarines and Hudson and Knight, which produces fats and margarines for the industrial baking sector are aware of the issue. Willowton buys its palm oil from a member of the RSPO and has applied to join the RSPO, says Clint Scriven, National Food Service Sales Manager at Willowton.  Epic also has a policy of buying from carefully screened suppliers, a quality assurance manager says.

Other SA companies are following in their own way. In late 2010, the global Consumer Goods Forum announced its commitment to ending deforestation and phasing out the use of refrigerant gases. Woolworths, along with Pick n Pay, Shoprite, Massmart, and formerly Altx listed CIC Holdings and Amka Products, which manufactures beauty products such Black Like Me are signatories.

It is not easy and not cheap to commit to responsible palm oil sourcing. The supply chain is complex and it can be difficult to prove the exact source of the product – members of RSPO (as oil producers) have been found guilty of rainforest destruction.

“It is taking time,” says Van Bormann. “But Woolworths deserves recognition for its efforts. In time others will follow.”

Source: Moneyweb