Krafting a New Story on Palm Oil

Written by Ashley Schaeffer

Topics: Agribusiness

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C'mon Kraft, Make Today Delicious!

For those following the recent developments of palm oil in the news, you know that this hot commodity is becoming increasingly controversial and companies are starting to either push to get the tropical oil out of their supply chain altogether or to adopt a strong palm policy to ensure they are not contributing to rainforest destruction.

Either way, if you’re a U.S. company with palm oil in your supply chain it’s now quite clear that action is becoming inevitable. As Kyra Choucroun recently wrote in the The Guardian:

The commitment of companies like Unilever and Nestlé to sourcing greener supplies can serve as a lesson beyond the palm oil industry, by promoting the importance of ensuring an ethical supply chain. Whilst blacklisting unethical suppliers can have a positive impact on corporate image, failing to adopt a policy of in depth supply chain analysis can render companies vulnerable to attack from all angles, risking customer loyalty and ultimately business development.

And she’s right about that. The importance of ensuring an ethical supply chain is growing by the day as companies are becoming increasingly vulnerable to internal and external scrutiny from customers, NGOs, and even CEOs risking brand damage and profits.

Peatland cleared on Kampar Peninsula. Photo: Ahmad Zamroni/AFP

The most recent company announcing its commitment to responsible palm oil is Kraft Foods.  RAN has been in constructive dialogue with Kraft for almost a year and though the company still has a way to go in order to ensure it’s supply chain is free of rainforest destruction, it is taking small steps in the right direction. For starters, Kraft announced in April of 2010 that it was immediately canceling all direct palm oil contracts with Sinar Mas in an effort to disassociate themselves with the widely known forest destroyer. However, they haven’t cut indirect contracts with Sinar Mas; Kraft still sources palm oil from Cargill even though it’s widely known that Cargill still sources from Sinar Mas.

Kraft, among other customers of Cargill, is strongly urging Cargill to sever ties with Sinar Mas – another indicator that Kraft is taking a leadership role in engaging problematic suppliers to transform the industry. Additionally, Kraft is standing firm with Unilever and others in not falling for the recent Sinar Mas greenwash “audit” which tried to wipe the company clean of rainforest destruction and social controversy to convince companies who cut contracts earlier in the year that their business was now responsible.  

Rainforests smoldering for palm oil in Sumatra. Photo: Constance Cheng/CNN

In recent weeks Kraft sent a “Palm Oil Statement” to RAN, summarizing the food giant’s position on palm oil and highlighting what they’re doing to be a part of the solution short of adopting a palm oil policy. Here are some excerpts from their letter:

We decided to suspend our direct purchases from the Sinar Mas affiliate, Sinar Meadows effective April 1, 2010. The decision to suspend business with Sinar Mas and its affiliates will stay in effect until they clearly demonstrate they comply with local laws and are able to source palm oil sustainably.

In addition to the action described above, we continue to ask our suppliers, including Cargill, to address any indirect supply related to Sinar Mas or its affiliates. We are aware of the recent independent audit of some of Sinar Mas’ palm oil plantations. We are not changing our sourcing decisions in the light of this.

Our suppliers primarily source from Indonesia and Malaysia, with smaller quantities coming from Brazil, Colombia, Mexico and West Africa. We are asking our suppliers to provide solutions and create consensus among stakeholders in addressing the deforestation issue in Indonesia, in particular with regard to strengthening RSPO standards.

When the issue was brought to our attention more than two years ago, we expressed our concern and support for the principle of a moratorium on further deforestation. This requires cooperation from producers (including farmers, cooperatives and post-harvest processors), the food industry, governments and civil society. We are planning to do our part to promote better production standards by purchasing palm oil certificates based on palm oil plantations certified under the RSPO.

Kraft foods supports the goals and efforts of RSPO. However, we believe more needs to be done to enforce guidelines and address deforestation.  RSPO needs to reach broad consensus on its certification standards, in particular with regard to climate change impacts of palm oil production.

The tide is turning.  As a senior Unilever executive put it in a recent speech to the Consumer Goods Forum in London, to persuade the 300 or so members of the Forum to work together to end deforestation, “Whether we like it or not it is very largely our industry which is providing the economic incentives for individuals and companies to chop down trees….Between us, we spend billions of dollars buying these commodities. We can make a difference if we buy them differently and better.”

9 Comments For This Post I'd Love to Hear Yours!

  1. Maryanne Appel says:

    I have been boycotting palm, palm oil, and palm fruit since
    learning about the devastation created by the palm oil plantations in Indonesica, Malaysia, Sumatra, and Papua New Guinea. I read labels when shopping, and if I see “palm,” the container goes back on the shelf. I write to corporations requesting that they elimninate this ubiquitous ingredient from their products, informing them that I am boycotting their companies until they do so. I share information with my friends, who are also vegan (and there’s no kidding ourselves, we’re not environmentalists if we’re not vegan), to join in the boycott, and several have done so.

    I don’t believe in the myth of “sustainable plantations.” There just aren’t enough inspectors or financial resources available to ensure compliance, and after all, these
    “sustainable” plantations have already destroyed the habitats of 15 endangered animals, including orangutans), as well as hundreds of other species of animals, and displaced countless numbers of indigenous forest peoples.

    Palm is a four-letter word that should be eliminated from our vocabulary and from our market places.

  2. Ann Callahan says:

    I hope that the news from Kraft that they are beginning to draft a new policy about their production of palm oil is not just a delaying tactic so they can continue business as usual. There should be no business practices within Kraft, or any other company, that devastate the environment and eliminate wildlife habitat. It is far too late to be able to have any ecosystem or animal life that is considered expendable. Even when it was “early”, no part of the Earth and its living creatures are expendable. We will be watching closely to see what level of integrity Kraft uses here. Their products will be increasingly boycotted is they are not doing the right thing here.

  3. Pete Chaviano says:

    Palm oil policy now!

  4. Elanne Palcich says:

    I do not buy any packaged item that lists palm oil as a replacement for hydrogenated oil. To me, saving the environment is on equal par with saving my health.

  5. Robert Pann says:

    NO to palm oil!

  6. sharif teguh says:

    Is it not a bigger environmental crime to boycott palm oil which is 13 times more productive per hectare than the nearest competing edible oil (soya)? Check out this website http://journeytoforever.org/biodiesel_yield.html#yield.

    Americans, Europeans and others who boycott palm oil because of de-forestation should look inward and ask whether enough has been done within their own countries. I am talking about RE-FORESTATION. Plantation crops like soya or rape which not only take up more land but are relatively poor carbon sinks, should gradually make way (to palm) to save the PLANET …

  7. raymond cooper says:

    i will buy products containing palm oil way before i will buy products that have soy or corn or rapeseed oil, i do have complete compassion for all animal rights and species,however, when monsanto stops murdering people and robbing their health then maybe i will change my attitude about rainforests and apes, maybe we could bring all the endangered species over to the us and put them in cages next to all the numb zombie pervert americans who are being held captive by big pharma and the fda with their percieved sense of freedom, im sorry, i know that might sound really evil and twisted, but God did create man as the superior species, palm & coconut oil rocks!! haha

  8. Surenthiran says:

    WOW….not bad…RAN is damn good in printing lies on Palm Oil. The report is very convincing for people who do not know palm oil at all. Hats off to RAN

    Why don’t RAN publish a report on Soya?

    I’m sure they won’t dare to publish the whole story on Soya.

    hehehehe ;)

  9. b says:

    damn you

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