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The fast-growing palm oil sector defends itself against an attack by large-scale distributors

09 September 2012

In late June, Côte d'Ivoire's Association of Palm Oil Producers (Association Ivoirienne des Producteurs de Palmiers à Huile/AIPH) brought an action at the Paris Tribunal de Commerce against the French retail chain Système U. Earlier this year Système U launched an advertising campaign headlined 'No to palm oil, yes to low prices. But not if it costs the earth.' The campaign condemned the environmental damage, deforestation and loss of species associated with oil palm cultivation, and also its harmful effects on health. The AIPH argued that 'the purpose of the campaign was solely commercial and that it lacked any basis in ecology or serious scientific analysis'. And, last November, 'Magasins U ranked […] among [France's] worst offenders in [the use of sustainable palm oil] in a table drawn up by the WWF.'

The action was brought at a time when palm oil production in Africa is attracting greatly increased levels of foreign investment. Production in Côte d’Ivoire grew by 21% in 2011 to reach a level of 400,000 tonnes, with record exports of 245,000 tonnes. Then, in June 2012, Cargill announced a five-year, US$300 million investment in a plantation covering 50,000 hectares. And Côte d’Ivoire is not the only country attracting this kind of attention. The American company Herakles is developing its oil palm plantations in Cameroon, while in mid July the Gabonese subsidiary of the Singaporean firm Olam secured a loan of US$228 million from the Central African States Development Bank (CASDB) and a banking consortium (BGFIBank, Afreximbank and Ecobank) to develop its oil palm project. The first phase of this project will see the planting of some 50,000 hectares, and the construction of a refinery with an annual capacity of 1 million tonnes is also planned.

Editorial comment

This is the first time that producer nations have attempted to defend palm oil in this way. However, while production in Côte d’Ivoire is certainly on the increase, the country remains a relatively minor player by comparison with the Asian giants, Malaysia and Indonesia, which together are responsible for 85% of world palm oil production.

Until now, the big environmental NGOs have condemned the damage caused by palm oil to the environment (deforestation) and to local fauna (particularly the orang-utan). These campaigns have paid dividends; several large food processors and distribution chains, mainly in Europe, have committed themselves in the medium term to eliminating palm oil completely, and/or to using sustainable palm oil with Roundtable on Sustainable Palm Oil (RSPO) certification. The Système U group, for example, has agreed to replace the palm oil contained in its products with alternative fats or with Certified Sustainable Palm Oil (CPSO).  By May 2012, the area certified by the RSPO had reached 1,302,206 hectares, a twelvefold increase since the organisation was founded in 2008, while annual production had increased by a factor of 10 to a figure of over 6.4 million tonnes, or 12% of world palm oil production.

Although it is impossible to predict the outcome of the AIPH action, Africa is defending the image of palm oil, still the most widely consumed in the world, at a time of increasing foreign investment in the sector. To ensure that this new output finds a market, any defence of the product must be accompanied a move towards RSPO certification. Coincidentally, Agrivar (Agro Industrie Variée), a Côte d’Ivoire company, is the first in Africa to obtain such certification. Olam has also committed itself to producing RSPO oil in its new Gabon project.


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