no deforestation palm oil claims losing branding value

It should come as no surprise to anyone familiar with the palm oil industry that the paper commitments to remove deforestation from supply streams is failing.

A new study on these commitments by the Imperial College of London identified the key challenges to putting the no deforestation words into action. Highlights of the study which can be accessed here are:

    This study shows that the global palm oil supply chain is a complex social system.

    Supply chain complexity impedes implementation of no-deforestation commitments.

    Supply chain certification may help overcome the problems posed by complexity.

    Existing certification standards require amendment to address deforestation.

This is not the first time these ” no-deforestation” or ” zero-deforestation” commitments have been questioned. The most important take away from this new study is one that brands should finish their homework on big commitments before they speak on it. The potential risk to the brand is that it may be constituted as false advertising if they are unable to say with certainty, that the claim is truthful.

The ” no-deforestation” or ” zero-deforestation” commitments by companies that used or produced palm oil was a wildly popular tactic to deflect criticism over palm oil. These commitments were celebrated by netizens as if forests were actually being saved and as a matter of fact, is still being pushed by petition peddlers who continue to demand that brands like Pepsico live up to their commitments. Credit should be given to Pepsico for not falling for a cheap branding gimmick that any industry veteran knows, is impossible to implement.

Commitments and certifications alone cannot be relied upon to save forests

The current NGO focus on palm oil may save some forests through certification schemes like the Roundtable on Sustainable Palm Oil (RSPO) but as other studies have shown, focusing on areas for palm oil certification alone creates opportunities for other industries to clear the forests. The current situation in Sungai Putri peat dome, West Kalimantan is a perfect example of this. Identified as an important habitat for a large orangutan population, NGO protests to remove an RSPO member from the area succeeded only to have the Indonesian government issue a license for a logging plantation in Sungai Putri.

In this age of environmentally conscious consumers, brands obviously need to show their commitment to sourcing sustainable raw materials. If a new statement was needed to distinguish their brands, then “environmental added value” would be a better one than ” no deforestation.” With everything that we know now about conservation needs, it is simply not enough to claim that a small forest was saved and ignore the fact that it is surrounded by deforested areas. These stand alone forest islands mean little to the survival of species which ultimately reflects poorly on brands that source from such areas.

Environmental Value Added palm oil for better branding

The concept of adding an Environmental Value is being made possible by the visions of some palm oil producing countries to develop jurisdictional certification systems where the operations of the entire country is factored into planning for sustainability instead of the current systems that focus narrowly on selected areas. This may or may not prevent situations like the threat to orangutans in Sungai Putri or the projected loss of forests in Colombia but the net impact will be positive and measurable.

Palm oil producing countries including Nigeria and Ecuador are adopting a jurisdictional approach towards developing their palm oil industries. Malaysia on the other hand, is using a national initiative, the Malaysian Sustainable Palm Oil (MSPO) scheme which is the first out of the gate for national certification. This is being done to distinguish its palm oil from being associated with the general accusations against palm oil. Despite its protestations that Malaysian palm oil was not developed fully by deforestation and that the country is seeing a growth in forest cover, it has not been spared by critics of the palm oil industry which assume that all 5.8 million hectares of oil palm plantations in Malaysia sit on once pristine forests.

The MSPO has set an aggressive target date for the audit and certification of all oil palm operations in Malaysia to be completed by the end of 2019, at which time, the scheme will become mandatory by law. This model should be of great interest to other countries that are looking to introduce jurisdictional certification for their own palm oil industries.

Any initial opposition to the scheme locally, especially from medium sized growers whose profits and loss are determined not by NGOs but by the global market for vegetable oils is now largely muted. This may be the result of the Malaysian government’s initiative to make MSPO certification zero-cost to oil palm small and medium farmers. This waiver of certification costs, often a significant hindrance in other certification schemes is helping to bring larger tracts of Malaysian oil palm cultivated areas under MSPO scrutiny and certification. Farmers are thus beginning to appreciate cleaner local environs under MSPO certification while maintaining their harvest volumes. This is what sustainability is about. The ability to provide for today and for generations to come.

While the current global demand for certified palm oil may be low, the fact remains that the demand for vegetable oils and a green source of energy will be enormous in the near future. It will be important for palm oil producing countries to show that their palm oil does not threaten the natural environment unnecessarily.

Where third party certification has not been able to support claims of sustainability entirely, jurisdictional or national certification will create that opportunity. Getting that national certification to a point where palm oil buyers can simply say ” We buy from Malaysia” or ” We buy from Colombia” as a qualifying statement will take much effort on the part of governments and industries. Once achieved, the ability to point out measurable environmental values for the palm oil produced will be priceless to brands seeking to distinguish themselves.

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