Cargill’s New Palm Oil Deal for Unilever: Can It Be Called Sustainable?

Written by Ashley Schaeffer

Topics: Agribusiness

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Orangutan victim with missing fingers

Companies around the world with their hands in the palm oil pot are feeling the heat. Not only because our planet is warming up from rampant deforestation in Indonesia, but also because there is building momentum in the corporate food and agricultural sectors, and increased pressure to do something about it.

The growing international focus on companies that produce, trade, or use palm oil is quickly separating out the market leaders like Unilever and Nestle- companies that are taking an active role in adopting policies to safeguard their climate footprint- from the rainforest destroyers like Cargill and General Mills.

After years of RAN’s pressure, Cargill finally announced that they are undergoing a palm oil supply chain audit in collaboration with WWF. An assessment of Cargill’s own HSL (Harapan Sawit Lestari) plantation in West Kalimantan, Indonesia will also be conducted, beginning in August.  Cargill has invited RAN to provide our own critical comments on the audit. These are both positive steps.

The agricultural giant’s latest move made a big splash in the industry: the decision to enter into a supply agreement to provide Unilever’s European operations with segregated Roundtable on Sustainable Palm Oil (RSPO) certified palm oil.  According to Cargill, this means that the palm oil will be stamped “sustainable,” having been segregated at every step in the supply chain.

Although this is a great step in the right direction, Cargill needs to demonstrate that their segregated, “sustainable” palm oil is from a credible and responsible source, because as long as Cargill continues to buy from disreputable companies like the Sinar Mas Group, their customers cannot be sure that their purchases are untainted by forest destruction. And, until certification schemes like the RSPO prove that their standards are being consistently implemented on the ground (which currently is not the case), supply segregation cannot completely insure that the palm oil provided does not come from plantations that have recently replaced rainforests, or been stolen from local communities.

Read RAN’s response to Cargill’s segregated palm oil announcement for yourself.

Clearing with forest strip

Rows of cleared forest ready for palm oil plantations

We know from inside sources that this announcement has generated quite a bit of noise among other stakeholders, particularly U.S. companies like General Mills and Kraft, who are upset that Cargill has not offered them segregated palm oil.  Overall, the Cargill-Unilever announcement is a strong signal that companies are taking this issue seriously and making progress, but Cargill should  make certified segregated palm oil available to all of their customers, particularly those in the U.S.

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Was it worth it?

As Leila Salazar-Lopez says in recently stated, “The agreement between Cargill and Unilever could prove that it is possible to differentiate between palm oil that destroys rainforests and palm oil that is produced in a more environmentally responsible manner. What they have not yet proven is that it’s possible to produce palm oil and stop destroying forests altogether.”

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