Palm oil: Cargill highlights action plan for a sustainable supply chain

06 Jun 2018 --- Cargill claims to be on a mission to be “the leader in nourishing the world in a safe, responsible and sustainable way.” One primary focus is its work across complex global supply chains, a crucial component on how the global corporation serves its customers and keeps food systems strong. The company’s goal is to build a 100 percent transparent, traceable and sustainable palm oil supply chain by 2020 and it’s making substantial progress to deliver on its commitments.

Recently Cargill published an update on progress; Cargill’s action plan for 2018 details how it is advancing the 2020 commitments through a series of measures.

FoodIngredientsFirst caught up with Marie Lavialle-Piot, Cargill's Sustainability Program Manager, to find out more. 

“By publishing our policy in July 2014, Cargill committed to transparency and regularly reporting on our progress towards a 100 percent sustainable transparent and traceable supply chain by 2020. Our latest report outlines our progress in 2017 and how we will advance sustainability in 2018,” she begins.

“We reached 96 percent combined traceability to mill level (99 percent for kernel and 96 percent for palm) and 55 percent to the plantation (32 percent of kernel and 59 percent of palm in the fourth quarter of 2017 for all the palm we ship. Sixty-five percent of our direct suppliers have a No Deforestation, No Peat, No Exploitation (NDPE) policy.” 

But how does the company plan to do more? And, what steps must be taken for Cargill to reach its palm oil sustainability goals?

“Traceability to the plantation remains one of the greatest challenges of the industry today. Cargill has already started to collect plantations coordinates within high priority landscapes and will extend it to a global collection by 2020,” continues Lavialle-Piot.

“We will accelerate it thanks to collaboration with partner suppliers who share our commitments to developing an increasingly sustainable and traceable palm oil. Collection of the information during supplier engagement program (workshops, visits, etc.) The use of technology, particularly in the collection of small growers information and the standardization of the collection, storage and verification of the traceability data to even better measure our progress.” 

As part of the sustainable palm oil journey, Cargill has been building strong and trusting relationships with palm oil producers, packaged consumer goods conglomerates, the numerous communities around its plantations and individual smallholder farmers.

Cargill owns 19 refineries, 11 mills, five plantations and works with approximately 22,000 smallholder farmers with plantations of 25 hectares plus and also works with 1,558 third-party mills. 

And it’s this relationship with smallholder farmers that is a crucial element to achieving sustainability goals. 

Lavialle-Piot explains some of the real changes happening on the ground for farmers and their communities. 

“Cargill is partnering with farmers to increase productivity and market access. We have trained thousands of farmers around the world to use sustainable farming practices so they can increase yields and profitability,” she says. 

“We provide training on agricultural practices, farm management, land use and deforestation, health & safety, labor rights and adoption of Roundtable on Sustainable Palm Oil (RSPO) certification.”

“We are currently developing technological solutions to map farmers, give them access to market information, track the financial health of their farms, improve productivity, and mitigate environmental risks.”

“We want to ensure that farmers are included in our supply chain and engaged in sustainable and profitable practices.”

Cargill’s updated report also talks about progress on the ground regarding labor and human rights. Cargill independently assessed its own plantations and launched efforts within its supply chain focused on labor in Malaysia. Cargill has also partnered on industry-led initiatives in Indonesia through the Decent Rural Living Initiative.

“There are meaningful and innovative supplier engagement programs in Malaysia, Indonesia and Latin America,” adds Lavialle-Piot.

“There are the labor and human rights initiatives in Cargill operations and industry partnerships including the launch of the Decent Rural Living Initiative, an industry-led initiative with four other companies to help improve labor and human rights for agricultural workers in the Indonesian palm industry.”

“There are also smallholder certification and empowerment programs in Malaysia and Brazil.”

In addition, Lavialle-Piot explains Cargill’s key priorities for the future include:

- Developing a verification mechanism to increase transparency and improve processes;
- Develop sustainable landscape approach to address common issues at a landscape level;
- Investing in technology to empower farmers and develop robust tools to assist Cargill in monitoring and mitigating social and environmental problems;
- Bring partnership to the next level.

Consumer view of palm oil 
In general, palm oil, how it is sourced, where it comes from and the farmers and small communities of grower countries have been heavily scrutinized in recent years as industry steps up efforts to clean up the supply chain. 

There is also significant pressure from non-government organizations and environmental groups like Greenpeace which continually investigate the palm oil supply chain. 

At the same time, there is increasing consumer awareness about the significant issues of palm oil – deforestation, loss of the natural habitat of the three surviving species of orangutan, child labor, a fair trade environment for farmers, other labor issues and more. 

Just last week a new study examined the challenges of palm oil sourcing. The study by the Imperial College London says that genuinely “deforestation-free” palm oil products are problematic to guarantee. And despite a considerable amount of work within the industry, a more collaborative and supportive approach to understanding palm oil supply chains is needed so it can lead to more effective strategies being developed.

Lavialle-Piot agrees that the consumer is becoming much more conscientious, a vital factor in why Cargill is pushing forward with communicating its palm oil sustainability goals. 

“They (consumers) want to do good for the world and not cause any damage,” she adds. “They have access to technology and data which enables consumers to be informed very quickly and aware of what is happening in the world and the impact of the food chain on the world’s resources.”

“Therefore, it is critical that we keep working in transforming supply chain, support our customers in developing ingredient solutions that come from trusted sources and that are environmental and socially-friendly.”

Lavialle-Piot believes that transparency and technology support Cargill’s sustainability message, and the company must continue to communicate its success stories about smallholder farmers and the successful partnerships and programs at a landscape level. 

“The demand for oil is going to keep growing as the world population grows. With the highest yield, palm is the best edible oil crop to meet future oil demand with the lowest footprint. Furthermore, millions of small farmers and communities are dependent on the palm economy,” she adds.

“We have a responsibility towards them to support them in responsibly producing palm in protecting forest biodiversity and respecting human rights.”

Referring to the recent move by UK supermarket, Iceland, to scrap palm oil from its own-label products, Lavialle-Piot says: “The ban of palm oil is not a solution.”

“We should keep promoting the purchase (uptake) of sustainable palm oil. The sector works pre-competitively on the ground to stop deforestation and prevent the exploitation of people,” she continues. 

Cargill will continue to recognize the importance of addressing social issues and the respect of human rights; its reevaluating policy to strengthen standards on “no exploitation” and the aforementioned Decent Rural Living Initiative. This program brings together diverse perspectives from growers, unions, NGOs and other key stakeholders to identify and scale solutions to complex sustainability challenges and uphold fair and safe employment conditions. 

“Cargill has partnered with UNICEF to protect children living on our plantations and in surrounding palm growing communities,” adds Lavialle-Piot.

“The objective of the project is to reduce the palm oil industry’s adverse impacts on children and help plantations to improve the lives of millions of workers and their families worldwide.”

“We worked with Proforest to develop a social risk assessment methodology to identify, monitor and mitigate the risks,” she concludes. 

By Gaynor Selby