If you were in charge of making palm oil production more sustainable, your first step might be to put pressure on businesses to buy from approved sources in order to achieve a recognised standard. It seems a sensible way of thinking, but as today the real-life version looks to launch a new trademark, some inherent problems linger.
The initial hurdle for the members of the Roundtable on Sustainable Palm Oil (RSPO), a convening of mainly European big name supermarkets and food manufacturers, has been working out how to approach getting others to sign up.
The world’s largest buyer of palm oil, Unilever, signed up over a year ago and, have aggressively pursued a campaign of talking up better palm oil sourcing. Nestle, following pressure from Greenpeace, followed suit.
If these giants signing up to this agenda, signalled an industry-wide agreement to commit to source palm oil responsibly, that might be the end of the conversation. But it’s not – in the forests Malaysia and Indonesia, there is evidence, activists and newspapers claim, that unacceptable practices are still happening.
However, Unilever, the world’s biggest buyer, only take 3% of what’s produced globally. That helps show just how many businesses buy what is the world’s most used vegetable oil and shows how a certification that encompasses, 463 businesses, would still have only a small share of the market.
Equally, identifying what may or may not be considered ‘sustainable’ in what is a highly complex supply chain is a challenge. If the RSPO standard is too tight, members will be unlikely to be able to adhere given the supply chain transparency that would require; too loose and the standard starts to mean nothing – if buying ‘sustainable palm oil’ means buying ‘something some of which may be sustainably sourced’, what does that say to the consumer?
And of course, consumers are a key part of this puzzle. Many are clued up on the certification and shop accordingly. But if the RSPO standard is less credible because of the failure of governments to enforce tighter regulations on what it means to buy sustainable palm oil, that doesn’t mean the standard, the label on the chocolate bar for example, doesn’t still have great PR value to these companies.
As UK’s Green Party MP Caroline Lucas puts it: “The industry knows that, given the choice, consumers will demand change.”
Of course, the implication is, if consumers don’t know what the companies that sport the label actually have to do, that’s fine for the purchasing organisations – they get to be identified as ‘green’ without having to put in all the work required to actually source sustainably.
Another factor to consider: the problem thus far has been a European one. As I said, even if the companies currently part of the RSPO find a way to make a convincing standard, growing food businesses in emerging markets may not be thus hampered. That not only confers a potential competitive advantage for them, it eases the pressure on the government in, say, Borneo or Malaysia, to act against the environmental problems around the farming of palm oil.
All of this presents disincentives for businesses genuinely pursuing a sustainable sourcing agenda. If the standard loses credibility, their hard work in developing their supply chains goes unrecognised by consumers. Equally, they are likely losing out in price-terms to those not impeded by the decision to buy green.
Which isn’t to say the RSPO is being deliberately deceptive or counterproductive. There’s genuine disagreement about what its role should be. For the Malaysian Palm Oil Council, its edicts on what is and isn’t sustainable are “insulting”. Greenpeace, meanwhile, counts much of its action against such (now notorious) suppliers as Sinar Mas as ineffective.
Perhaps then, it runs the risk of being something of a fig leaf, unable to move forward or back without either a drastic change in the regulatory stance of the respective governments or a further shift in consumer sensibilities.
Still, the other obvious question has to be, if the RSPO didn’t exist, wouldn’t someone with a mind to improving palm oil sourcing have to set it up anyway?
Steve Hall is the deputy editor for Procurement Leaders Magazine.