BROTHER TECHNOLOGY CLEAN UP PALM OIL’S IMAGE?
ANA IONOVA, MARTINNE GELLER
Some of the world’s major palm oil users, including Nestle, Unilever and Mondelez, are trying out new satellite technology to track deforestation, as pressure grows on them to source the ingredient responsibly.
They say the monitoring systems allow them to target people felling trees in producing countries like Malaysia and Indonesia, where forests are shrinking, more efficiently than policing supply chains on the ground.
“They say you’re Big Brother,” said Benjamin Ware, global head of responsible sourcing at Nestle. “It’s not Big Brother — it’s today’s reality... there is nothing secret anymore.”
Interviews with leading brands, commodity traders and plantation owners show the systems have limitations and opinions on them vary, reflecting tension within the industry over how to tackle an issue with no easy answer.
Some say the technology is not enough to stop deforestation — that monitoring is not preventing. Others worry boycotting unsustainably made palm oil just drives bad practices elsewhere.
“Dividing the supply chain into the good versus the bad fundamentally does not solve deforestation,” said John Hartmann, global sustainability lead for agricultural supply chains at commodities trader Cargill, which sells palm oil to firms like Nestle and Unilever. Palm oil buyers have toyed with satellite imagery for years, but have now ramped up their use as they rush to meet a pledge of zero net deforestation by 2020, set by global umbrella body the Consumer Goods Forum.
The oil is in nearly half of all packaged goods from chocolate to soap, and is also used as a cooking oil and in biofuel.
As sustainability becomes more of a buzzword, multinational brands are trying to keep shoppers from switching to independent start-up brands, which often tout green credentials.
“There’s more awareness,” said consumer analyst Robert Waldschmit from Liberum. “People want a sustainably-sourced product.” Palm oil contributes less to deforestation than beef or soy, which are responsible for much of the destruction in the Brazilian Amazon. But it has garnered attention because it thrives in biodiverse regions, threatening endangered species and exacerbating global warming.
The big players, including consumer brands, commodity traders like Cargill and Wilmar International and plantation operators and processors, have supply chains that span millions of smallholder farmers as well as many middlemen.
“They are trying to take it into their own hands on how it’s monitored... Because they haven’t gotten their supply chains under control at this time,” said Phil Aikman, campaign director at environmental pressure group Mighty Earth.
Nestle, target of a 2010 video by Greenpeace International depicting a stick of Kitkat bar as an orangutan finger, was briefly suspended by the Roundtable on Sustainable Palm Oil (RSPO) last year for not sharing timebound plans for how it would boost purchases of certified palm oil.
The RSPO, which is backed by the World Wildlife Fund and other NGOS, sets varying levels of sustainability criteria that members must meet to certify their oil; the most stringent level involves ensuring it is separated from the rest and can be traced to a single certified source.
Rspo-certified oil comes with extra costs, which buyers are not always willing to swallow. Of the 11.9 million tonnes of Rspo-certified oil produced in 2017, only 52 per cent was sold as such, the group said.
But the RSPO has itself faced criticism that it allows some deforestation as well as development on valuable peat lands: In November, it responded by tightening its rules.
Nestle says a quarter of its palm oil is Rspo-certified and all of it will be by 2023, but 100 per cent will be “responsibly sourced” by 2020, partly with the help of satellites.
From next month, it plans to publish data online from an Airbus-developed satellite system called Starling, to “put responsibility on the mill” that extracts oil from palm fruit.
Nestle says that once a Starling deforestation alert is verified, it will ban the offending supplier after 60 days of engagement unless it cleans up its act, although the firm has not yet suspended any since rolling out this new model last month.
“The challenge is figuring out how do we act on that information, who are the right people in the organisations to interact with to address deforestation,” Emily Kunen, Nestle’s global responsible sourcing leader for palm oil and seafood, told Reuters at a plantation under Starling’s watch in Bahau, some 125 km south of Malaysia’s capital Kuala Lumpur.
Unlike cocoa or coffee, palm oil is often not marked as sustainably or responsibly sourced even though Nielsen data suggests sales of products with environmental claims often fetch higher prices and grow faster than their peers.
“The image of palm oil is very bad,” said Nestle’s Ware. “So, for the time being, we really struggle to see how we could market it positively.” Italy’s Ferrero Group, which only buys Rspo-certified palm oil that has been separated from the rest, has tried Starling, but the Nutella maker said it is still assessing results of its pilot to decide whether to keep using it.
“One of the questions we would like to look at is whether there’s an early warning system,” said Giulia Di Tommaso, Ferrero’s chief communications and sustainability officer. “Are you able to address it before deforestation happens, or does it only allow you to understand when the damage is already done?”
Unilever says it is on track for all of its “core volume” purchases, the bulk of its usage, to be certified by the end of 2019 and is also using satellite technology. — Reuters