Cargill in deal to supply Unilever with segregated palm oil

By Jane Byrne

- Last updated on GMT

Related tags Palm oil New britain palm oil

Cargill has announced a deal to supply Unilever’s European operations with 10,000 metric tonnes of fully segregated refined RSPO certified palm oil but no dateline was given.

The global commodities group said the agreement means the palm oil it supplies to Unilever, having been rubber stamped by the Round Table for Sustainable Palm Oil (RSPO), will be segregated at every step in the supply chain but it told that it would not be disclosing any further details about the agreement with Unilever at this stage.

Palm oil is used in a wide range of food and personal care products, but there are serious concerns about the effect of the industry on the environment, as intensive plantations have cleared habitats for endangered species like tigers and orangutans in South Asia, while also adding to carbon emissions.

The RSPO was set up in 2004 to promote sustainable palm oil use – and changing to palm oil that is sustainable or supports green palm certification has become a major trend for food manufacturers and retailers.

Sustainability targets

Marc Engel, chief procurement officer at Unilever said that the deal marks another important milestone in its plan to achieving 100 per cent sustainable palm oil by 2015 with over 35 percent already being RSPO certified this year.

“Cargill's physically segregated certified oil will be delivered to our factories and used in our products,”​ he added.

End products using the segregated certified palm oil are allowed to make the claim: 'This product contains RSPO certified palm oil.'

A spokesperson for Cargill told this publication: “This is another example of how we continue to make good progress towards sustainability in palm oil. Combined with the RSPO certification of our own plantations, our commitments to sustainable practices in palm production and our recent partnership announcement with WWF to assess our supply chain, we are showing leadership in this field.”

Certified supply chain

Cargill has set a goal of buying 60 per cent of its total crude palm oil from RSPO members by the end of 2010, and said that it is encouraging its third-party suppliers to join RSPO and attain certification and its eventual goal is to have a 100 per cent RSPO certified supply chain.

The trading giant said it is working towards sustainable palm oil production and fully supports the RSPO process with its PT Hindoli refinery in Sumatra, Indonesia one of the first to receive RSPO certification in February 2009. Cargill said that it is “working to certify our other plantations as quickly as possible.”

The trading giant saying that its recently announced alliance with WWF will ensure independent assessment of its suppliers’ progress toward implementing the RSPO criteria.

Rainforest destruction

Environmental group, Greenpeace, has been calling on Cargill to take immediate action to remove rainforest destruction from their supply chain, citing its relationship with palm and pulp group, Sinar Mas.

Several leading multinationals including Unilever, Kraft and Nestle have recently ended their palm oil supply contracts with Sinar Mas, on the heels of the Greenpeace allegations about some of its practices.

And yesterday the NGO claimed that it has photographic evidence to show that Sinar Mas is continuing to destroy critical habitats despite public assurances of it ceasing to do so.

Cargill referred this publication to its website statement when queried in relation to its relationship with Sinar Mas and the ongoing allegations. The trading giant states that: "If the independent verification [RSPO] process validates the allegations of illegal forest clearance and deep peatland clearance outlined in the Greenpeace reports and Sinar Mas does not take corrective action,"​ it will delist them as a supplier.

Reduced usage

Leading biscuit and snack maker, United Biscuits, recently announced a deal with palm oil supplier New Britain Palm Oil (NBPOL), a firm which maintains that is able to segregate the palm oil throughout the supply chain.

And UB claims that by the end of 2011 it will have all palm oil used in its products sourced form sustainable and segregated sources.

The biscuit company said it has also reduced the amount of palm oil in its products by 40 per cent since 2005, using alternative vegetable oils as replacement ingredients.

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