Sustainable palm oil : Nestlé supply deal may be a game changer

Sustainable palm oil: Nestlé supply deal may be a game changer

by Alex Wilson on Sep 30, 2011 © www.ethicalcorp.com

A recent decision by food giant Nestlé to re-instate a previously banned palm oil supplier on sustainability grounds may help make the business case for more sustainable palm oil. Alex Wilson reports

Mid-September 2011 was a significant moment in the world of sustainable palm oil.

After months of long conversations between Greenpeace and the Forest Trust, and a lot more hard work on sustainability policies and improved practices, food giant Nestlé resumed purchasing from the Indonesian Palm Oil producer Smart.

In March 2010 Nestlé had dropped Smart and its parent company Golden Agri-Resources (GAR) as a supplier of palm oil, as a result of Greenpeace campaigns against the company. The campaign group had accused SMART of rainforest destruction for the planting of oil palm trees in Indonesia.

Smart is ultimately part of the controversial Sinar Mas group, which owns Smart’s parent firm, Golden Agri Resources. The exact connections between all the companies in the group are not easily available, but Sinar Mar links to Smart on its corporate website.

In turn, Sinar Mas is ultimately controlled by the Widjaja family, which also owns Asia Pulp & Paper, a company held to be one of the world’s most irresponsible by environmental campaign groups, and a long standing Greenpeace target.

High profile campaigns, focusing on the emotive issues of the destruction of rainforests and the decline habitats of Orang-utans, by organisations such as Greenpeace have made many large buyers wary of controversial palm oil companies in recent years.

Unilever, a company that now drives much of the work around sourcing sustainable palm oil via industry body the Roundtable on Responsible Palm Oil (RSPO), has also been a target of Greenpeace in recent years.

The sustainability steps taken by SMART and its parent company Golden Agri-Resources, include a partnership with specialist NGO The Forest Trust. GAR is also in regular contact with Greenpeace with regard to their sustainability work.

Notably GAR announced that Smart received RSPO certification of its first plantation on the 16th September.

Andy Tait, a senior campaigner from Greenpeace says that: “On paper GAR’s sustainability commitments are now the strongest in the palm oil industry.”However, claims Tait, more broadly, huge problems remain in the palm oil industry. RSPO standards aren’t strong enough to stop deforestation, Tait asserts, claiming that “a number of their producer members have not adhered to RSPO standards.”

Greenpeace is supportive of Nestlé’s recent decision to begin working again with GAR. Tait says that it’s important that Smart/GAR and Nestlé receive recognition for their recent speedy work on improving the sustainability of their palm oil and that others now follow their lead.

Unilever, the world’s biggest individual corporate buyer of Palm Oil, has been less quick than Nestle to resume dealings with GAR and its associate companies. The company released a statement shortly after Nestlé revealed its decision saying that they would not yet be following Nestlé’s example.

However, Unilever’s cautious position could soon be changing; Peter Heng, GAR’s Director of Communication and Sustainability told Ethical Corporation that: “We are in an initial stage of discussion with Unilever to resume business.”

Scott

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