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AAK: If you make palm oil claims you must play by RSPO rules

By Elaine Watson , 23-Jun-2011
Last updated on 23-Jun-2011 at 16:50 GMT

Craven: 'It’s not right for a supplier to sell and run'
Craven: 'It’s not right for a supplier to sell and run'

Food manufacturers are using certified sustainable palm oil in their products – and making claims about it – when they are not members of the Round Table on Sustainable Palm Oil (RSPO) and have not have their facilities RSPO audited and certified, one leading supplier has claimed.

Refiner AAK UK says many food manufacturers appear unaware that as users they too have to go through a full audit and certification process in order to make claims about sustainable oil and use the new logo/trademark.

AAK UK md Martin Craven said this failure to play by the rules was “harming the credibility and efforts of the sustainable palm oil movement”.

He added: “The rules exist to maintain the integrity of the system, and yet this is not always made clear from the start by suppliers. All parties of the supply chain – including the manufacturer – must now be RSPO members and go through the full audit and certification process in order to use sustainable palm oil and make claims."

‘It’s not right for a supplier to sell and run’

But the onus was on suppliers to explain the rules to customers, stressed Craven.” It’s not right for a supplier to sell and run, leaving customers to find out the truth when they’ve already invested in marketing, packaging, policy documents and corporate social responsibility statements.

“In my opinion, any supplier that sells sustainable palm oil without guiding and supporting the customer in relation to its use is selling only half a product.”

So what?

As to why it mattered, a spokesman added: "They are undermining everything we’re trying to achieve through the RSPO.

"Without becoming a member of the RSPO, without being audited and open, how can we prove that oil has been sustainably produced? Our intention [by raising this issue] is to make a strong appeal for action to support the development of RSPO certified sustainable palm oil."

Cargill declined to comment specifically on AAK UK's claims, but external communications chief Steve Fairbairn said: Cargill is working with our customers to help them understand the RSPO requirements and to enable them to make the best choice to meet their business needs."

Cargill's European, Malaysian, US and Australian refineries have now received RSPO certification to offer mass balance and segregated palm products, he noted."We are also offering our customers certificates depending on their preferences.”

Sustainable palm oil: The options

US food manufacturers have three choices on the sustainable palm front.

The first is to buy certified sustainable refined palm oil (trading at a premium of around $50-70/t). This is made by plantations adhering to criteria laid down by the Round Table for Sustainable Palm Oil (RSPO), segregated throughout the supply chain and fully traceable. AAK, Loders Croklaan and Cargill (as of May 30) all now supply this.

For manufacturers using more complex palm oil fractions and derivatives/blends , the most affordable options are the book and claim/GreenPalm scheme or the ‘mass balance’ system.

Buyers of GreenPalm certificates can guarantee that a tonnage of oil or derivatives equivalent to the tonnage they use has been produced from sustainable sources. While buyers can't guarantee the actual oil they are buying is from an RSPO-approved plantation, they at least know the amount they use has been produced sustainably.

The third option – mass balance –combines some segregated certified/traceable sustainable oil and some standard oil.

Why are GreenPalm certificates trading at such low values?

While the low value GreenPalm certificates were trading at ($2.74 for palm oil and $3.50 for palm kernel oil at time of writing) was a concern, said GreenPalm boss Bob Norman, the money did at least go directly back to the grower.

He added: “The very low value of certificates is indeed a concern. It is however very simple to explain. Ironically there is more supply than demand, hence the low value. If more manufacturers and retailers purchased certificates and supported the production of RSPO certified palm oil - and at $2-$3 why shouldn't they - then the value of certificates would go up.”

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