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Sustainable palm oil set for expansion if challenges can be overcome

09 December 2012

In an interview in October 2012 published on the online news service Foodnavigator.com, Darrel Webber, Secretary General of the Roundtable for Sustainable Palm Oil (RSPO), stated that ‘awareness of certified sustainable palm oil (CSPO) is on the cusp of exponential growth,’ arguing that this promises food manufacturers the processing benefits desired (such as a long shelf life and stability), ‘without causing environmental damage in palm oil producing countries’. 

However, the use of non-sustainably produced palm oil has come in for growing criticism, as a result of the deforestation associated with its production. For example, in early October 2012 Foodnavigator.com reported that academic studies were suggesting that palm oil development in the Kalimantan province of Indonesia was ‘driving the destruction of carbon-rich tropical forests in Borneo, leading to huge releases of carbon dioxide into the atmosphere’. The study argued that ‘sustainable production of palm oil will require re-evaluation of awarded oil palm plantation leases’, because if they were all developed, ‘more than a third of Kalimantan’s lowlands would be planted with palm oil by 2020.’ 

In the face of these and similar criticisms, some food manufacturers are turning away from the use of palm oil, with ‘palm oil-free’ claims reportedly gaining ground as a marketing tool. It is reported that in 2011, 72 products were marketed in Europe carrying ‘palm oil-free’ claims on the front of the pack, compared to 16 in 2010, while up to July 2012 a further 66 new products carrying such claims had been introduced to the market. 

The RSPO Secretary General is concerned about this trend, pointing out that most agricultural activities leave a huge carbon footprint and, as a consequence, the focus needs to be on producing oil crops sustainably rather than switching from one oil crop (palm oil) to another. Promoting sustainably certified palm oil, it is argued, not only helps the environment but also promotes improved labour and social conditions for communities.

Mr Webber reports that the RSPO is currently giving priority to ensuring that new investments in palm oil production in Africa are sustainably implemented. In August 2012, however, it was reported that the US-based agribusiness Herakles Farms, which was preparing to implement a ‘huge palm oil project in Cameroon’, withdrew from the RSPO following NGO criticisms of its operations. The company’s CEO, Bruce Wrobel, claimed that the company left because ‘the body is too young and lacks the technical expertise needed to vet palm oil projects’.

Elsewhere on the African continent, speaking at the Third African Accreditation Cooperation general assembly at the end of September, South Africa’s trade minister warned against emerging ‘eco-protectionism’ which operated ‘under the guise of addressing climate change concerns’. While particular concerns were expressed over the discussions around the ‘imposition of border adjustment taxes on imports produced with greater carbon emissions than similar products produced domestically’, recent developments in the palm oil sector suggest that this is a multifaceted problem, with the marketing value of certain labelling claims potentially having a greater short-term impact on demand trends.

Editorial comment

The trend away from using palm oil by some manufacturers raises issues related to labelling around environmental concerns. As the RSPO Secretary General pointed out, the underlying issue is about making all forms of agricultural production more sustainable from a climate change perspective. Yet, the climate impact of particular forms of agricultural production for particular purposes is controversial (e.g. the recent developments in discussions about EU biofuel targets) (see Agritrade article ‘EU farmers and biofuel industry mobilise against EC biofuel U-turn’, forthcoming).

Against the background of growing consumer concerns over the environmental impact of their purchase choices, questions arise: what role is there for government regulation of labelling claims on climate-related issues? Should this be purely a private sector responsibility or is there a public sector responsibility to ensure that climate-related claims are science-based and do not mislead consumers, to the advantage of certain groups of producers?

However, the issue of ‘eco-protectionism’ is not simply an issue of government-regulated measures, such as the proposals for border adjustment taxes highlighted by the South African trade minister. In the short term, it is likely to relate to ‘implicit claims’, such as ‘palm oil-free’, which in themselves do not make any particular climate-related claims, but which rather seek to plug into particular public perceptions of climate-related issues.

Greater clarity on what is meant by sustainability and what criteria are applied in making sustainability-related claims could potentially have a role to play in ensuring that consumers can make informed decisions in the light of growing environmental concerns, while avoiding genuine environmental concerns being used to promote protectionist initiatives. 


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