Surveying European importers of palm oil on environmental and social performance

alm oil and ingredients derived from palm oil are used in a wide range of food and non-food products sold by most retailers (e.g. cakes, biscuits, bread, soaps, bleach). Growth in demand for both food and non-food applications have led to significant production growth and land requirements, contributing to an increasing rate of deforestation, particularly in South East Asia. In response to the growing deforestation challenge, the Consumer Goods Forum (CGF) called on businesses to adopt commitments ensuring that their supply chains would achieve zero deforestation by 2020 for all commodities, including palm oil.

Retailers are the public face of a long and complicated palm supply chain. Although they have little direct influence over the primary production practices of suppliers four or five tiers beyond their contracted suppliers, they occupy a unique role in understanding and responding to customer preferences. The Palm Oil Transparency Coalition (POTC) is formed of companies working together to remove deforestation and exploitation from palm oil supply chains. It aims to achieve this by:

• Achieving greater transparency of the progress their supply chains are making towards zero deforestation and exploitation in palm oil production.
• Enabling individual retailers and product suppliers/manufacturers to make more informed sourcing/purchasing decisions.
• Driving faster progress towards the supply of zero deforestation palm oil for UK/European markets and helping the same globally through the take up of this or similar models.

This is the first POTC report reflecting the findings from its annual survey of the top ten ‘first importers’ of palm oil to Europe and North America. Importers were selected on the basis of the ranking of the highest volume suppliers to individual POTC member and were then prioritised by those that were most commonly identified by the group.

As a result of the 2017 survey, the following key findings have been identified:

• Commitments and approaches to achieving zero deforestation amongst growers, manufacturers, traders, and importers are rapidly evolving.
• There are significant differences in the progress importers are making towards achieving zero deforestation and exploitation free supply chains.
• ProForest and The Forest Trust (TFT) are the primary partners relied upon for traceability and risk management programmes of the surveyed companies.
• Use of risk-based supply chain monitoring means that deforestation-free palm oil cannot currently be assured for retailers.
• Exploitation is not being proactively managed in third party plantations or supply chains by the majority of companies assessed.
• Third party verification of importer commitments is limited to traceability claims only and therefore do not cover broader policy areas (e.g. exploitation, peatland planting).
• Case studies showcasing zero deforestation progress are often limited to own company plantations / communities and therefore exclude third party supply.
• In general, importers stated that they believe RSPO certified palm oil remains the most effective way to limit the risk of deforestation within retail supply chains.

The 2018 survey is underway with results scheduled for reporting by the end of the year. Building on the insights from the 2017 review, we are focusing more on actions to prevent exploitation. For more information on our commodities data services contact Will Schreiber.

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