New study examines the challenges of “deforestation-free” palm oil

29 May 2018 --- Deforestation-free palm oil is not as simple as it sounds – that is the message from new study coming out of London where researchers discovered a better approach is needed that goes beyond the public shaming of companies in the supply chain. A new 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.

This is much more likely to slow deforestation and other issues often associated with palm oil.

Although growing palm trees requires less land and resources than traditional vegetable oils, the cultivation of palm oil is a primary cause of tropical deforestation, particularly in Malaysia and Indonesia. Oil palm plantations replaced 2.7 million hectares of tropical forest in these two countries between 1990 and 2005, leading to a loss of biodiversity and an increase in greenhouse gas emissions.

FoodIngredientsFirst has been closely following the journey of many major suppliers of palm oil in their bids to create a sustainable supply chain and eliminate some of the controversial practices that have been associated with it such as child labor and its negative environmental impact. 

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 investigates the palm oil supply chain. 

Alongside increasing consumer awareness about the major issues of palm oil, this has led to many companies committing to only using “deforestation-free” palm oil products – those made exclusively using palm oil from plantations that have not cleared forests. 

However, environmentalists have criticized the action so far as taking too long and not following sufficiently strict guidelines.

But this latest study has revealed some of the challenges faced by companies in guaranteeing that products labeled as “deforestation-free” have indeed been produced without causing deforestation. 

The results have been published this week in the journal Global Environmental Change.

They identify the major barriers to success as highly complex supply chains, insufficient support from governments, a lack of consensus over what counts as “deforestation,” and growing markets in India and China that prefer low cost to sustainably produced goods, according to the study. 

However, the researchers point to some existing schemes and suggestions for tackling several of the issues that could lead to truly sustainable palm oil production.

“Deforestation-free palm oil is possible, but our study found it is very challenging for companies to guarantee at present,” says Lead author Joss Lyons-White, from the Grantham Institute – Climate Change and the Environment and the Department of Life Sciences at Imperial. 

“For example, supply chains are so complex that tracing palm oil back to the source is very difficult – lots of trade may occur between different parties before manufacturing, where the palm oil is used in many different products for different purposes. This makes it hard to know exactly where the original oil was from – and whether it was linked to deforestation or not.” 

“However, simply banning palm oil is unlikely to be the answer. Instead, we need to find ways to ensure commitments can be implemented more effectively.”

Last month, UK supermarket Iceland claimed to be the first major supermarket in Britain to completely remove palm oil from its own label food. The UK’s leading frozen food specialist said that it would stop using palm oil as an ingredient in all its own label food by the end of this year. The project is already well underway, with palm oil successfully removed from 50 percent of its own label range; the end of 2018 will have reformulated 130 products.

It was also very significant in the palm oil industry in February when Unilever took a pioneering stance on its palm oil supply chain by being the first consumer goods company to publish in full a dossier, all the suppliers and mills that it sources from. 

The rare industry move is designed to show the company’s commitment to transparency and is a radical step in palm oil supply chain transparency with Unilever considering the full disclosure a “milestone” in its journey towards a more sustainable palm oil industry.

It could also prompt widespread industry change. 

Getting to the crux of the issue 
Certification can help to overcome the problem of complex supply chains and the Roundtable on Sustainable Palm Oil (RSPO) does currently operate a certification system, which has been shown to reduce the loss of virgin forests. 

Many suppliers are members of the RSPO which was established in 2004 with the objective of promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders.

However, RSPO certification does not currently guarantee palm oil is entirely deforestation-free.

For example, RSPO certification aims to protect virgin forest and forest of “high conservation value,” but does not cover other forests that have been logged or regrown following clearance. These forests may still make valuable contributions towards nature conservation targets, but the existing standard does not protect them from conversion to palm oil plantations.

FoodIngredientsFirst has reached out to the Roundtable on Sustainable Palm Oil for its reaction to the new study. 

To identify areas that posed problems for companies trying to be deforestation-free, the research team interviewed people across the palm oil sector, from growers and processors through to traders, manufacturers and retailers.

They found the complexity of a typical supply chain means there are many organizations with different functions, connected in different ways for different purposes. These organizations find it difficult to engage with one another about policies and procedures, and misunderstanding was rife between parties, according to the research. 

Cost is also a factor, with emerging markets in China and India demanding more palm oil at the most competitive prices, rather than paying more for deforestation-free, sustainably produced oil. This means there is often little incentive for producing deforestation-free palm oil.

Beyond public shaming
Creating a market for sustainable products in these countries is one principal direction for positive change, say the researchers, but there are other areas where progress is already being made. 

For example, there has recently been a multi-party agreement on a working definition of “deforestation,” expanding it beyond purely virgin forests, and the RSPO is considering a proposal to update its standard with this definition later this year.

There are also initiatives to promote collaboration between supply chain members, designed to improve coordination and reduce misunderstanding. These measures may be more likely to produce more sustainable products than external pressure placed on companies by NGOs, for example, in cases where companies lack direct control over their supply chains.

Co-author Dr. Andrew Knight, from the Department of Life Sciences at Imperial, says that many NGOs have used public shaming to compel companies to make commitments to deforestation-free palm oil. 

“This tactic was effective in the past to obtain commitments from companies, but the context surrounding commitment implementation is problematic. Shaming may not continue to achieve positive outcomes regarding reduced deforestation if the complex issues impeding implementation are not worked out,” he says. 

“A more collaborative and supportive approach to understanding supply chains and the people and companies that comprise them is required. Based on this common understanding, more effective strategies can be developed, founded upon thoughtfully constructed certification and stronger government regulation, which will be more likely to ensure the rate of deforestation of these vulnerable and important ecosystems slows.”

By Gaynor Selby