This page is designed to support people working for companies who want to source products containing certified sustainable palm oil (CSPO), as defined by the Roundtable on Sustainable Palm Oil (RSPO). This procurement guide has been developed in association with the British and Irish Association of Zoos and Aquariums (BIAZA).

Roundtable on Sustainable Palm Oil (RSPO) infographic on the palm oil supply chain

Roundtable on Sustainable Palm Oil (RSPO) infographic on the palm oil supply chain

Contents

 


Why is it important to support sustainable palm oil?

Palm oil production can have serious negative environmental and social impacts. Millions of hectares of tropical rainforest have been destroyed in recent years – most notably in Malaysia and Indonesia – to make way for oil palm plantations. This large-scale deforestation has huge implications for climate change as well as for many native species, including tigers and orangutans, which are being pushed closer to extinction as their habitat is destroyed and they come into increasing conflict with humans.

Palm oil production also causes social conflict when small farmers, local communities, and indigenous peoples lose the rights to their land. There have also been reports of workers’ rights being violated by plantation owners.

The certification standards for sustainable palm oil developed by the RSPO are based on a set of principles and criteria that include the protection of primary forest and areas of high conservation value as well as the rights of local communities, plantation workers, and indigenous peoples. By purchasing certified sustainable palm oil (CSPO) you are supporting these efforts and driving the palm oil industry toward production of 100% certified sustainable palm oil.

How can actively engaging your supply chain make a difference?

It is important for retailers to actively engage with supply chains as this will drive demand for sustainable palm oil.

As palm oil is used as an ingredient in a large number of consumer products, stakeholders at the retail/consumer end of the palm oil supply chain can play an important role in increasing demand for CSPO. This increased demand through the adoption of strict policies for the procurement of products containing CSPO places pressure upon growers to adopt best practices for sustainability.

Researchers have found that Singaporean shoppers were willing to pay 8.2–9.9% more for common palm oil-containing products that are deforestation-free. Given the current premium for segregated certified sustainable palm oil (CSPO; 1.5–5%), there is an incentive for manufacturers to use CSPO.

Establishing policies and procedures for procurement of sustainable palm oil is not as daunting a task as it might seem, and we provide here a simple step-by-step guide to help you through the process.

Given the negative impacts of palm oil production, shouldn’t retailers try and cut palm oil entirely from their supply chains?

Given that the production of palm oil is a significant source of employment and economic development in developing countries in the tropics and it is currently the most productive commercial vegetable oil crop per hectare, future increases in production seem inevitable. Therefore it is imperative that producers are engaged to strongly reduce their negative impacts. Since vegetable oils are largely interchangeable, ZSL believes that boycotting palm oil is not a practical solution as it will serve to drive demand for less productive oil crops such as sunflower, rapeseed, and soya bean, which may have a worse environmental impact in the long term.

While the decision to boycott or not lies with individual retailers, you may find that it is simply not feasible, given that palm oil is present in one form or another in over 50% of the consumer goods sold in most supermarkets. We suggest that a procurement policy represents a reasonable compromise, as it enshrines a firm commitment to sourcing CSPO and drives demand in the market, which will ultimately compel producers to adopt best practices for sustainable production in oil palm plantations.

What are the keys ways in which you can make a difference?

1. Ask for certification

The best option is to buy products that use RSPO Certified Sustainable Palm Oil (CSPO) rather than non-CSPO. If physical CSPO is not available, you can ask for products sold through the Book and Claim PalmTrace model as RSPO Credits (formerly traded under GreenPalm). RSPO PalmTrace is an online system to trace the physical trade of RSPO CSPO. It covers only the physical trading of CSPO and its fractions and supports producers, who already operate certified plantations, to improve their practices and get their remaining plantations certified.

RSPO logo

 

Prioritise products containing physical CSPO

Palm oil is one of the most widely used ingredients in the world, and its production is driven by consumer demand for a broad range of products, including foodstuffs, cosmetics, cleaning products, and fuel. By demanding that only CSPO be used in these products, retailers can apply pressure on manufacturers to source fully traceable sustainable palm oil, which in turn encourages oil palm growers and millers to adopt best practices for sustainability and increase their production of CSPO to meet this demand. Ask your suppliers if their products contain certified sustainable palm oil and look out for the RSPO logo. For more information on CSPO visit www.rspo.org.

2. Communicate!

By communicating a clear message to your staff, suppliers, and customers about your position on CSPO and why you are taking action to achieve a sustainable and ethical supply chain, you will raise awareness of the issues related to palm oil production and thereby strengthen the demand for CSPO.

Supply chain options

Identity Preserved

CSPO comes from a single identifiable certified source. CSPO from individual mills is kept segregated from all other sources (certified and non-certified) and each batch can be traced from plantation to factory to retailer.  The Identity Preserved supply chain model requires that fruit bunches and oil receive unique identifiers and are kept physically apart throughout the entire supply chain by growers, mills, transport and storage providers, refiners, and manufacturers. All steps in the supply chain are documented, so the CSPO can be traced back all the way from end-users to one specific grower.

Benefits and challenges to establishing Identity Preserved supply chains

This type of CSPO has the highest level of traceability. The consumer is assured that the physical palm oil received came from a uniquely identifiable, RSPO-certified plantation.

Identity Preserved is the most costly of the four supply chain systems because of the extensive need for documentation and verification. This complexity is further magnified if the palm oil fractions (different types of refined palm oil) are converted to derivatives for use in other industries (such as health and beauty) as the number and complexity of handling and storage increases exponentially. It is important that there is a balanced market demand for all fractions of segregated CSPO in order to maximize the benefit and minimize costs to end users. For example, if certain desired fractions are a small proportion of the final CSPO mix, the producer faces possible “downgrading” of the component inventory to alternative blends, or the possible sale of Segregated CSPO simply as Mass Balance or Book and Claim (which are of lower value). It is especially challenging during the early stages of introducing CSPO when volume demands and end product requirements for segregated palm oils are still uncertain.

However, there are also a range of cost benefits to certification that are quantified in the Profitability and Sustainability in Palm Oil Production: Analysis of Incremental Financial Costs and Benefits of RSPO Compliance report produced by WWF, FMO, and CDC.

‘Identity Preserved’ CSPO is kept separate from non CSPO and can be traced throughout the supply chain (by GreenPalm)

‘Identity Preserved’ CSPO is kept separate from non CSPO and can be traced throughout the supply chain (by GreenPalm)

Segregated

Certified palm oil is kept separate from non-certified palm oil, but is blended with other batches of CSPO and therefore cannot be traced back to a specific plantation. This option requires that fruit bunches and oil from RSPO certified sources are kept physically apart from other non-certified palm oil by growers, mills, transport and storage providers, refiners, and manufacturers. The end-user is assured that the physical palm oil received came from one or more RSPO-certified plantations, but unlike the Identity Preserved system, the oil can not be traced back to individual plantations.

Benefits and challenges to establishing segregated supply chains 

1. Monitoring & quality control
FFBs can be purchased from a variety of sources, including company owned plantations, plasma holders, and independent smallholders, which can make it challenging to monitor and verify that all sources have been certified. In the New Britain Palm Oil case study Mapping Segregated Supply Chains, the company’s Global Sustainability Director, Simon Lord, outlines some of the key challenges involved in developing segregated supply chains for all its mills and discusses the opportunities for overcoming those barriers.

2. Securing sufficient supply
Typically mill operators need to confirm and trace sufficient sources of FFBs from certified plantations and work with suppliers to become certified. It can be particularly challenging for mill operators to assist with certification and meet their sourcing targets when they source from numerous different smallholders with varying practices and capacities. The Wild Asia Group Scheme (WAGS): Implementing Capacity Building for Independent Smallholders case study provides examples of some of the challenges experienced by smallholders, as well as the approaches, advisory services, and resources that can be used to try to address those issues.

3. Remaining profitable
Because of the extensive need for documentation and verification, segregation is a relatively costly supply chain system. However, it is less costly than Identity Preserved. Mill operators typically need to secure FFB supplies from 10,000 to 40,000 ha of plantation to recover the costs of segregation and remain profitable. With global uptake of CSPO still low at around 50% of global production, with an uneven demand for different palm oil derivatives, operators have been unable to make returns on their investment in obtaining certification via the collection of premiums. However, there are a range of other benefits to certification that are quantified in the Profitability and Sustainability in Palm Oil Production: Analysis of Incremental Financial Costs and Benefits of RSPO Compliance report produced by WWF, FMO, and CDC.

Segregated Supply Chain Model

Mass Balance

The Mass Balance supply chain system allows for mixing of CSPO with non-CSPO at any point in the supply chain so long as the total volume of oil purchased as being RSPO-certified does not exceed the volume of RSPO-certified sustainable oil that went into the chain, i.e. companies cannot sell more sustainable palm oil than they have purchased.  For this system, trade in sustainable palm oil is monitored administratively by UTZ certified throughout the entire supply chain. Sustainable palm oil does not, however, have to be stored or shipped separately, making it relatively inexpensive, but end-users cannot make claims about the actual physical content of their products. Mass Balance oil can be labeled with the RSPO trademark and the tag ‘Mixed’, with a claim that says it “contributed to the production of certified sustainable palm oil” or “advances the production of RSPO-certified sustainable palm oil (equivalent to .. % of the palm oil utilized)”.

Benefits and challenges to establishing Mass Balance supply chains 

This supply chain option is relatively inexpensive compared to Identity Preserved and Segregated, but it has a lower level of traceability and market claims are not as strong. Mass Balance Supply Chain Model

Book and Claim

The Book and Claim system is very different from the other models as there is no requirement for physical traceability (CSPO does not have to be segregated or tracked) through the palm oil supply chain.  Through the PalmTrace system and the Book and Claim supply chain, an RSPO-certified producer can trade one RSPO Credit for every tonne of palm oil they produce. RSPO-certified producers sell RSPO Credits to end users directly; redeeming RSPO Credits allows end-users to claim support for specific volumes of sustainably produced palm oil and can claim to having ‘contributed to the production of RSPO-certified sustainable palm oil’. It is the most flexible and cost effective way for end-users to claim their support of sustainable palm oil, but end-users cannot make claims about the actual physical content of their products.

This method is often used by businesses that do not yet have the necessary RSPO certification or supply chains required for physical CSPO, and so is often a viable option for businesses using fractions and derivatives of palm oil, for whom a certified segregated physical supply might not be available, or for those importing finished goods containing palm oil. The RSPO PalmTrace system also enables palm oil smallholders (and land locked producers without export routes) to sell their sustainable production, covering the costs of RSPO certification and encouraging future investment.

Find out more about RSPO Credits and the RSPO PalmTrace system.

RSPO PalmTrace logo

Book and Claim Supply Chain Model

Supply chain traceability

RSPO PalmTrace is an online system for RSPO members to trace the physical trade of RSPO Certified Sustainable Palm Oil (CSPO). It covers only the physical trading of CSPO and its fractions. It applies to the Identity Preserved, Segregated and Mass Balance supply chain systems. The online platform for both the existing and new system is technically developed and managed by UTZ CERTIFIED.

Who else is doing this?

Many retailers have already made progress in sourcing CSPO. ASDA, Carrefour, Morrison’s, Sainsbury’s, and Tesco, among others, have committed to using only CSPO in their own-brand products by end 2015. However, pressure also needs to be focused on third-party suppliers to take control of their supply chains and improve transparency and sustainability. On the manufacturing side, several global brand leaders, notably Unilever and Nestle (UK), have made significant progress towards using CSPO, as have United Biscuits, Royal FrieslandCampina, Burton’s Foods, Cadbury, Premier Foods, and Remia.

Many governments of countries that consume palm oil and its derivatives are starting to introduce country-level commitments to source CSPO. Having national commitments plays a large role in influencing downstream companies to exert pressure on their suppliers.

EU Government commitments to source sustainable palm oil (by RSPO)

EU Government commitments to source sustainable palm oil (by RSPO)

Developing sustainable palm oil procurement standards: 7 easy steps

The guidelines presented here are based on ZSL’s first-hand experience of developing a procurement strategy for its operations at London Zoo and Whipsnade Zoo as part of its ISO14001 Environmental Management System (EMS). This strategy covers a range of departments within ZSL, including internal catering, external catering, retail, animal department, and estates. If your organisation already has an EMS in place, this procedure should fit easily within that system.

1. Develop a palm oil procurement policy that clearly outlines your organisation’s commitments and timeframes.

This should include a communication strategy for encouraging others to become more ethical consumers of palm oil and to highlight your company’s commendable efforts in this regard. If possible, have it signed off by someone senior in your organisation as a sign of your commitment to sustainable palm oil.

2. Carry out a review of all products potentially containing palm oil that are procured by the different departments within your organisation. Check whether suppliers have a sustainable palm oil policy.

Be aware that many products contain ‘hidden’ palm oil in the form of palm oil by-products or palm oil that has been simply labelled as vegetable oil in the ingredients list.

For more information on what to look out for, refer to ZSL’s guide on uses of palm oil in food and non-food products. This is related to products used by ZSL and is provided as a case study example. You may wish to develop something similar for your own organisation.

As part of its UNLESS project to engage and inform consumers on the environmental issues associated with palm oil production, Philadelphia Zoo has produced a more detailed list of common names for palm oil and palm oil derivatives, which can be very useful when checking product ingredients for palm oil.

Given the large number of products that contain palm oil, you may decide to take a step-by-step approach, initially committing to a review of the food items you procure, leaving cleaning products and other groups to a later stage.

The product review is a simple process of gathering information on the use of palm oil by all of your suppliers. We suggest that you record the following information:

  • The name of the supplier
  • The individual companies whose products they supply
  • The types of products supplied
  • Do these products contain palm oil? (as of date…)
  • Does the supplier have a policy on sustainable palm oil? (as of date…)
  • What are the supplier’s key commitments in relation to sustainable palm oil? (as of date…)
  • Is this in line with your organisation’s policy? (as of date…)
  • The name, position, and email/telephone number of a key contact
  • Date of last contact

All of this information can be stored in a simple tabular framework such as an Excel spreadsheet.

To help you manage your supply chain for sustainability, you may wish to consider joining an organisation such as Sedex, which provides a platform for information-sharing on labour standards, health & safety, the environment, and business ethics.

3. Inform suppliers of your palm oil procurement policy.

Once information has been gathered on the uses of palm oil by your suppliers and their commitments regarding CSPO, you will want to inform them of your own CSPO procurement policy. Ideally you should discuss the policy with them and identify the changes in your requirements of them as suppliers. For large-scale suppliers we suggest that you may wish to involve them in the development of your strategy, and in turn motivate them to generate one of their own. For all suppliers this is an opportunity to encourage them to publicly commit to sourcing CSPO within a stated timeframe, if they have not already done so.

It is important to ensure that your supplier is aware that sourcing from RSPO members and/or purchasing RSPO Credits does not equate to purchasing CSPO. Suppliers will need to provide certification from the RSPO as proof that they are sourcing and using sustainable palm oil in their products. Simple membership of the RSPO does not imply certification but that a company has made a time-bound commitment to becoming more sustainable.

For an example of how suppliers can be approached, see our sample email for contacting suppliers and Chester Zoo’s example of a supplier questionnaire.

4. Review suppliers’ commitments to CSPO and ensure that they are in line with your policy requirements.

Records of all your suppliers’ and manufacturers’ policies and commitments relating to palm oil should be collated and maintained, updating them as and when new companies are brought into your procurement. Include this information in the same simple table used for step 2. We suggest you use the list of RSPO members with time-bound commitments on CSPO as a starting point, and if in doubt contact your suppliers directly.

5. Change suppliers.

Once suppliers been informed of your new policy on CSPO procurement, if a company does not, or is unable to, adhere to your procurement policy, contractual obligations must be fulfilled and an alternative supplier found. However, always try and encourage suppliers to commit to sustainable palm oil in the first instance, and where possible offer assistance to facilitate this change. Be aware that it may take them some time to understand the issues surrounding the palm oil supply chain and to make the transition to CSPO.

6. Formalise this process and develop a palm oil procurement procedure.

Once this process has been tested, outline all the necessary steps to ensure that your organisation complies with its palm oil policy and the standards it wants to maintain in the long term. Develop this into a procedure and issue to all relevant staff.

7. Monitor, measure, and report on your success.

It is important to set achievable targets and key performance indicators (KPIs) by which to measure your own success and identify where improvements are necessary. KPIs within your policy could include the percentage of your suppliers who are committed to CSPO or the percentage of products that contain CSPO. Reviews must be carried out periodically to ensure that suppliers have not changed their commitments.

Corrective action must be taken to address any failures identified, and your corrective action process should be outlined in your procedure.

ZSL RSPO Workshop series


ZSL’s internal guide to uses of palm oil

Use of palm oil within the food sector

Palm oil is predominantly used in confectionary, breads, pastries, margarines, and spreads and is principally listed as ‘vegetable oil’ in the ingredients. Retail and catering staff and their suppliers should be aware of the various guises in which palm oil and its fractionates are listed, mainly:

  • Vegetable oil
  • Palm oil kernel
  • Palmitate
  • Saturated fat content 50% or > then good chance it’s palm oil
  • Margarine highly likely to be derived from palm oil
  • Cocoa butter equivalent (CBE)
  • Cocoa butter substitute (CBS)
  • Palm Olein
  • Palm Stearine

Although E471 (Emulsifier) and other food additives can be derived from palm oil, it is unlikely that certified sustainable oleochemical derivatives will be widely available in the near future, therefore we recommend focusing initially on tackling the use of palm oil as a vegetable oil. This should be done by requesting either certification evidence of current use of CSPO or a signed policy or time-bound action plan outlining a company-wide commitment to sourcing only CSPO by end 2015.

If a company does not use palm oil, you should still request a position statement from them which adheres to your procurement policy in order to cover potential future use.

Use of palm oil within the non-food sector

Cleaning products:

Cleaning products contain oil-based chemical derivates in the form of oleochemicals; however, because oleochemicals are rarely differentiated based on the original feedstock, traceability is currently a major challenge. Some key industry players have begun working with their manufacturers and suppliers to identify the sources and encourage sustainable and responsible production and procurement practices. We recommend prioritising the purchase of products from those suppliers who source CSPO.

Animal feed:

Palm oil and palm kernel meal is a component of animal feed used for commercial livestock (such as cattle, sheep and pigs), pet food, as well as domestic and commercial fish food.

Currently there is little awareness of sustainability of palm oil in the feed industry, though there is evidence that this is starting to change. Palm Kernel Meal is often described as a by-product, and some have argued that for this reason sustainability concerns are not an issue. However, there are indications that this is changing, for example, in November 2010, GreenPalm (now traded as RSPO Credits) introduced tradeable certificates for Palm Kernel Meal (PKM).

When procuring animal feed which contains palm-derived ingredients, make your suppliers aware that certification is now available for the sector and encourage them to cover their usage of palm kernel meal with RSPO Credits.

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Common names for palm oil and palm oil derivatives

These ingredients are definitely palm oil or derived from palm oil:
Cetyl Palmitate
Elaeis Guineensis
Epoxidized Palmitate
Hydrated Palm Glycerides
Octyl Palmitate
Palm Oil
Palm Fruit Oil
Palm Kernel
Palm Kernel Oil
Palm Stearine
Palmate
Palmitate
Palmitic Acid
Palmityl Alcohol
Palmitoyl Oxostearamide
Palmitoyl Tetrapeptide-3
Palmolein
Saponified Elaeis Guineensis
Sodium Kernelate
Sodium Palm Kernelate
Sodium Palmate

These ingredients are either derived from palm oil or coconut oil:
Cetyl Alcohol
Fatty alcohol sulphates
Isopropyl or Isopropyl Palmitate
Sodium Dodecyl Sulphate (SDS or NaDS)
Sodium Isostearoyl Lactylaye
Sodium Laureth Sulfate (in almost everything that foams)
Sodium Lauryl Sulfate
Sodium Lauryl Sulfoacetate

These ingredients are often derived from palm oil, but could be derived from other vegetable oils:
“Other vegetable oils” (may include palm oil)
Cocoa Butter Equivalent (CBE)
Cocoa Butter Substitute (CBE)
Emulsifiers (some can be palm oil derived)
Glyceryl Stearate
Sodium Lauryl Lactylate
Steareth -2
Steareth -20
Steareth -21
Steareth Acid

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Sample email for contacting suppliers

The text below is a sample email for contacting suppliers regarding their use of palm oil. It can be used for guidance and amended according to your specific policy on palm oil procurement:

“Dear X,

Following a review of its supply chains as part of its sustainable procurement strategy, Company name has developed a policy on palm oil which it is outlining to all its suppliers.

Company name will only purchase products that contain RSPO-certified sustainable palm oil (CSPO) or from suppliers that have made a public commitment to source only RSPO-certified sustainable palm oil (CSPO) by end 2015 at the latest.

This will require either a signed policy document and/or time-bound action plan from suppliers, even if their products do not contain palm oil.

By committing to sourcing products which contain certified sustainable palm oil (CSPO), Company name is committed to its mission (example from ZSL) ‘to promote and achieve the worldwide conservation of animals and their habitats’ and is encouraging companies to join them.

Thank you for your help in advance.

Kind regards

Your Name and Organisation”

 

Chester Zoo questionnaire

Chester Zoo’s Sustainable Palm Oil Supplier Questionnaire

 

Chester Zoos Supplier Palm Oil Audit

Chester Zoo’s Supplier Palm Oil Audit

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RSPO members with time-bound commitments to source 100% CSPO

Company commitments can be tracked by consulting their RSPO Annual Communication of Progress (ACOP) reports or by visiting the Supply Change website, which also covers other commodities including cattle, soy and timber.

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