Ethical Performance
inside intelligence for responsible business


firms meet on palm oil

September 2004

Food companies, suppliers and non-governmental organizations will gather in Jakarta, Indonesia, early next month to discuss ways of reducing the negative social and environmental impacts of the palm oil industry.

The two-day meeting has been called by a cross-sector body called Roundtable on Sustainable Palm Oil (RSPO), which was set up in April and now has more than 40 international members who are oil palm growers, processors, consumer goods manufacturers, retailers, investors, environmental NGOs and government agencies.

Corporate supporters include Agropalma Group (Brazil), Britannia Food Ingredients (UK), Danisco (Denmark), Cloetta Fazer (Sweden), Body Shop International (UK) and Rabobank (Netherlands). Cadbury Schweppes, which was asked hostile questions about palm-oil sourcing at its recent annual meeting, has also joined.

The group was initially devised two years ago by WWF, together with Migros, J. Sainsbury and Unilever. Following a meeting in Malaysia last summer attended by 200 delegates from 16 countries, the group now operates as a non-profit body based in Kuala Lumpur. Members sign a ‘statement of intent’, a non-legally binding expression of support for sustainable palm oil production. This commits them to ‘co-operation within the supply chain and open dialogue with stakeholders’.

Palm oil is the world’s second most popular vegetable oil after soy bean oil. More than 28 million tonnes are produced every year for use in a wide variety of foods including margarine, cooking oil, crisps, cakes, biscuits and pastry. Its increasing use is associated with clearing forests to grow palm trees in Africa, the Americas and Asia. NGOs are concerned that this is leading to deforestation and land rights abuses.

RSPO signatories commit themselves to ensuring that oil palm plantations expand only into areas of little or no conservation value. Investor members, such as ABN, Rabobank and FortisBank, also undertake not to invest in damaging palm oil schemes.

An investigation by Isis Asset Management found that more than three in four of 27 palm oil companies in the UK investment company’s portfolio appeared unaware of its source, despite having well-developed sourcing policies for other commodities (EP5, issue 9, p.6).

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