A thoroughly mapped supply chain is vital for sustainable palm oil, says Palm Done Right

22 Aug 2019 --- The spotlight will shine on the palm oil industry and its supply chain next month as the second annual Palm Done Right Month calls to action key players across the industry to foster the eco-conscious production of this controversial ingredient. Backed by a growing list of brands and retailers, US mission-based educational platform Palm Done Right aims to shift the needle towards organic palm oil grown for good. The movement aims to honor organic palm oil cultivation that prohibits clear-cutting, burning forests, planting in virgin or second-growth rain forests as well as labor issues.

“The majority of palm oil traded and sourced comes from unknown sources,” Monique van Wijnbergen, Sustainability and Corporate Communication Director of Natural Habitats Group tells FoodIngredientsFirst. “Mostly produced in huge monocrop plantations or by the millions of smallholder farmers who deliver their fruit anonymously to large-scale mills, from where crude palm oil or its derivatives find their way to markets in bulk for further processing, without anyone knowing exactly where and how it was produced.

“It is important for companies to work with suppliers who have thoroughly mapped their palm oil supply chains. This is vital for identifying high-risk sources and for helping ensure palm oil is produced sustainably. So companies should investigate and map their supply chain from the ingredient they source to the palm oil grower, and transition their current anonymous sourcing, or mass balance sourcing model, to an identity preserved model in which palm oil from a single identifiable certified source is kept separately from unsustainable palm oil,” van Wijnbergen asserts.

Palm is a tropical oil that comes from the fruit of the African oil palm, Elaesis Guineensis, one of two main fruit-bearing tropical palm species. Palm oil is a saturated fat that can be used in a multitude of ways. The oil is valued for its applications in boosting the stability, emulsification and smoothness of mouthfeel and texture in products, without adding trans fats. Demand for palm oil has soared since the US Food and Drug Administration (FDA) required food labels to list trans fats content (usually from hydrogenated fats) in 2006.

Unsustainable palm oil production methods are increasingly being shunned by players across the industry. 

Regularly linked to deforestation and a detrimental impact on wildlife, unsustainable palm oil production methods are increasingly being shunned by players across the industry. Statistics from Innova Market Insights report a strong rise in products claiming to be “palm oil free,” with 73 percent CAGR reported from 2015 to 2017. Top global market categories with a palm oil free claim, as a percentage of new food and beverage launches in 2017, are bakery (55 percent), spreads (7 percent), cereals (5 percent), ready meals & sides dishes (4 percent) and baby/toddler food (3 percent).

This year, the Palm Done Right movement gained momentum through collaborations with the CO-OP Community. The organization was a participant in Convergence, National CO+OP Grocers annual grocery and wellness conference in June in Minnesota, US. At the event, more than 200 natural product companies came together to share resources with over 300 leading National CO+OP Grocers (NCGs).

Ahead of Palm Done Right Month, Palm Done Right welcomes its newest brand partner, Hope Foods, building on a growing list of industry supporters. Based in Boulder, Colorado, Hope Foods is marketed as the first nationally-distributed organic hummus brand.

Van Wijnbergen highlights the following agricultural and technological developments that are shaping the future for palm oil:

• More stringent certification standards, strengthening sustainable practices in palm cultivation: “For instance, Round Table on Sustainable Palm Oil (RSPO) has adopted a total ban on deforestation, with all its stakeholders backing this new standard. Furthermore, with the development of the Independent Smallholder Standard, RSPO ensures that smallholders will be part of sustainable supply chains, instead of potentially getting excluded from global supply chains.”
• Improved forest monitoring technology in the fight against deforestation: “One example is Starling Verification, which offers highly accurate satellite imagery to track forest change and offers a reliable verification tool to ensure deforestation-free supply chains for stakeholders in the palm oil supply chain.”
• Field testing of regenerative (organic) agriculture in palm production: “Palm Done Right began this initiative in 2018 in Ecuador.”
• Transitioning to landscape management approaches: “We must adapt a focus on widespread efforts to eradicate deforestation, wildlife habitat loss and other land resource management issues on a district, region or provincial level – instead of focusing on individual farmers or single crops, ”

Challenges that hinder the sustainable production of palm oil are further outlined by van Wijnbergen:Demand for palm oil has soared since the US Food and Drug Administration (FDA) required food labels to list trans fats content (usually from hydrogenated fats) in 2006.

• Reluctance to reward sustainable practices: “Buyers are often not willing to pay the necessary premium for good practices. Price is often a barrier. In order to produce palm oil according to sustainable practices and develop new plantations sustainably, investments are necessary, and those investments will have to be earned back through higher prices.”
• Large and growing markets like China and India are markets for cheap palm oil: “This means that in these regions, palm oil is produced without respecting sustainable development, sustainable land use and workers’ and communities’ rights. The demand for good practices is lacking those markets, which can lead to palm oil that has been produced on deforested land and produced exploiting workers and community still finds its way to large markets, de-incentivizing the large-scale uptake of sustainable practices.”
• Debates around the use of palm oil and the call for a ban of palm oil in the US and Europe: “This results in reformulation away from palm oil instead of transition to an increased rewarding of sustainable practices, will result in a slowdown in the uptake of sustainable practices, as it involves investments which need to be earned back.”
• Ensuring the integration of smallholders into sustainable supply chains: “Around 40 percent of palm oil is produced by millions of smallholders. Reaching, training and supporting those millions smallholders to transition their current practices to sustainable practices is a huge challenge.”

Palm Done Right sources its palm oil from small farms in Ecuador and Sierra Leone, and markets its produce as “beyond organic” by encouraging multi-cropping, organic matter and soil inputs to enhance carbon sequestration and biological diversity. The organization claims to integrate experience and wisdom from indigenous cultures with the technical know-how of professional agronomists to empower farmers with the knowledge, support and resources they need to grow organically.

“Since the start of our operations in 2009 we operate a strict Land Use Policy that serves to prevent any conflict in relation to land use and preserve the associated rights of the local inhabitants,” says van Wijnbergen. “We operate a strict Forest Conservation Policy that prohibits the conversion of primary and secondary forests into agricultural production areas, tree plantations, or other degrading land uses. The Forest Conservation Policy stipulates the necessary precautionary actions for forest preservation and zero burning practices.”

The use of palm oil continues to come under mounting scrutiny that forces companies to address their role in this industry. Palm oil sourced the right way
The RSPO reports that roughly one-fifth of the global supply of palm oil is sourced sustainably. Many consumer goods manufacturers that rely on palm oil – Unilever, Nestlé, Procter & Gamble – have pledged to switch their supply chains exclusively to certified palm oil over the next few years. In June, the European Palm Oil Alliance (EPOA) asserted that Europe’s food manufacturers and retailers need to choose certified sustainable palm oil instead of backing messages to drop palm oil altogether.

Last year, RSPO CEO Datuk Darrel Webber warned against the unforeseen sustainability and biodiversity impacts that may come from switching to, what he calls, less sustainable edible oils than palm oil. “The knee-jerk reaction is, ‘if this stuff is bad why not stop buying it,’ but of course, there are perverse incentives. You do this and that will incentivize something that is worse. More messages are coming out from academia and civil society saying that banning palm oil could lead to worse impacts than what we have now,” notes Webber.

The use of palm oil continues to come under mounting scrutiny that forces companies to address their role in this industry. In terms of the top edible oils as a percentage of new food and beverage launches with a palm oil-free claim (Global, 2017), Innova Market Insights reports sunflower oil (53 percent) as the most popular, ahead of coconut oil (14 percent). The Some market researcher highlights a 96 percent average annual growth in new “palm oil-free” food and beverages containing sunflower oil (Global, CAGR 2013-2017). 

Last December, palm oil giant Wilmar International Limited piloted a new program to map and monitor all of its palm oil suppliers using satellites in a bid to curb deforestation. The pioneering move came as Dutch food and biochemicals player Corbion signed on as a member of the North American Sustainable Palm Oil Network (NASPON), through which major industry players in the region are collaborating to create a greener palm oil supply chain.

Also in December, Norway became the world’s first country to ban its biofuel industry from importing deforestation-linked palm oil starting in 2020. “The Norwegian parliament’s decision sets an important example to other countries and underlines the need for a serious reform of the world’s palm oil industry,” said Nils Hermann Ranum of the Foundation Norway (RFN) at the time. In the UK during the same month, retailer Iceland released its “No palm oil” campaign, which garnered media attention after the commercial was banned for being “too political.”

By Benjamin Ferrer