What’s behind the Sustainable Palm Oil label

Understanding what is behind certification for concepts like fair trade, organic agriculture, organic cosmetics and more broadly anything which claims to be “responsible” or “sustainable” is at the heart of the ongoing dialogue among consumers, retailers and manufacturers. Yet what goes on in the supply chain is only dimly understood by even the most well-informed consumers. Unless some brave soul starts developing “supply chain tourism”, it is unlikely that we will ever get a firm grasp on exactly what we are paying for beyond the feel good concepts of saving an orangutan or two somewhere in Borneo.

So palm oil has experienced a big shift in consumer perception this year due to successful lobbying efforts of Greenpeace and a fall-out in the European Union over the health risk contained in high levels of saturated fat contained in Nutella, which has been abruptly de-throned from its place as a symbol and repository of happy childhood memories throughout Europe.

Industries which rely heavily on palm oil as a cheap input for their products – mostly food and consumer items – are responding to consumer pressure to “clean up” their palm oil supply chains, and a number of solutions are available today.

Here’s a short primer on currently available certification which should help to de-mystify what you are getting when you buy a product which says “sustainable palm oil”.

Sustainable palm oil producers are grouped together in a body called Roundtable on Sustainable Palm Oil (RSPO)  which was set up in 2003 and brings together growers, processors, food companies, investors and NGOs. The members represent around 40% of palm oil producers., so they can’t be said to represent critical mass in the industry.

The RSPO defined the principles and criteria of sustainable palm oil in 2005:
•    No more replacement of ‘High Conservation Value Areas’ for new plantations
•    Respect for the righs of local people
•    Respect labour laws

RSPO has approved 3 supply chain models for RSPO Certified Sustainable Palm Oil:

1.    Segregated  – Most stringent option: sustainable palm oil is kept segregated through the chain. Mixing is possible only with other RSPO Certified Palm Oil. This is the only certification that allows retailers to claim that the product “contains” sustainable palm oil.
2.    Mass Balance – Sustainable palm oil is followed through the chain. Mixing with conventional palm oil is possible provided this is administratively possible. Retailers can claim that the product “supports” the production of RSPO sustainable palm oil.
3.    Book and Claim – Chain is not followed. End-users buy certificiates directly from the producer via web-based trading platform (premium for sustainable palm oil is currently valued at $13 per tonne). Allows buyers to claim that their product “supports” the production of RSPO sustainable palm oil.

So basically when you buy a product that carries either of those claims: ie “contains” or “supports the production of sustainable palm oil”, you will be getting one of the above three options.

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