Background, our commitment & beyond
Palm oil is a vegetable oil extracted from the fruit of oil palm trees. In 2007 about 38 million tonnes of palm oil were produced globally but this figure grows by between 6% and 10% every year. The oil makes up more than a third of the world's vegetable oil market.
Oil palms grow in equatorial conditions in Asia, Latin America and Africa, but more than 75% of the world's supply comes from Malaysia and Indonesia in South East Asia. Since the 1990s the area of land used for palm oil cultivation has increased by about 43%. The ever-growing demand for the oil is due to several factors, but the main reasons are its use in biofuel production and the rising need from developing markets, particularly China and India.
So far, much of this growth has not been sustainable: plantations have been created or expanded by clearing rainforest. This is taking a huge toll on both the local habitat and climate change. High Conservation Value Forests, indigenous peoples' way of life and wildlife, including the endangered orang-utan, are at risk.
And as demand continues to grow, so does the cost: palm oil prices have more than doubled in the past 18 months, from $458 per tonne in 2006 to $1 163 per tonne in the second quarter of 2008 (€320 to €810).
Unilever's use of palm oil
We have a long history of using palm oil in our products. It is a versatile fat that is rich in solid saturated fatty acids and can withstand refining at high temperatures, allowing individual components to be isolated for use in specific product applications.
Our business buys about 1.6 million tonnes of palm oil and its derivatives each year. This currently accounts for about 4% of the world's supply. However, over the past five years the total amount of palm oil (and speciality ingredients containing it) bought by us has decreased.
Palm oil ingredients are used across our portfolio, mainly in spreads, but also in savoury products (soups, sauces and bouillons) and ice cream. The oil is used in soap bars, while derivatives are also key ingredients in laundry and personal care products.
Sustainable agricultural sourcing
Unilever has a long-standing commitment to sustainability and responsible business practice. With over two thirds of our raw materials coming from agriculture, we have a clear interest in how crops are grown and in securing future supplies. We are a major buyer on world agricultural markets.
Our work on sustainable agriculture, which started in the mid-1990s, has focused on five key crops – palm oil, peas, spinach, tea and tomatoes. These Lead Agricultural Programmes and their extension into other crops are described in Our approach to sustainable agricultural sourcing.
Working with others
As well as working with our own growers and suppliers to set standards and improve agricultural best practice, partnerships with a wide range of stakeholders are also essential. Working with others describes our key sustainable agriculture partnerships.
Roundtable on Sustainable Palm Oil (RSPO)
Unilever was one of the founders of the global Roundtable on Sustainable Palm Oil (RSPO) – an industry-led initiative set up in co-operation with the conservation organisation WWF in 2003. The Roundtable works with plantation owners, manufacturers, retailers, banks and other NGO partners including Oxfam and Sawit Watch to devise standards for sustainable palm oil production. Unilever's Sustainable Agriculture Director, Jan Kees Vis, is president of the RSPO's executive board.
Following the agreement of RSPO Principles and Criteria in November 2005, a working group produced criteria for sustainable palm oil production which were tested by a group of Roundtable members during 2007. The RSPO developed national interpretations of the generic criteria in 2007 to allow for differences in national legislation in producing countries. Then during the Fifth Roundtable Conference on Sustainable Palm Oil in November 2007, RSPO launched its certification framework. The expectation is that the first quantities of certified sustainable palm oil will reach the market during the latter months of 2008.
Greenpeace protest
In April 2008, Greenpeace protestors held peaceful demonstrations at Unilever premises in the UK, the Netherlands and Italy. Greenpeace issued two demands:
Suppliers:
The first demand was for Unilever to stop trading with palm oil suppliers involved in rainforest destruction.
In response, we believe it is better to work with suppliers to persuade them and help them to stop using unsustainable agricultural methods. We successfully implemented this approach in the fishing industry and more recently in tea production, with the launch of Rainforest Alliance-certified teas.
We have encouraged industry-wide discussion to address these issues and continue to contribute learnings about best practice from our own palm oil plantations in Ghana. We also helped to develop the Principles and Criteria for Sustainable Palm Oil Production launched by the Roundtable on Sustainable Palm Oil in 2005, and the certification programme that was officially launched in November 2007. We believe this provides a foundation on which to build.
Moratorium:
Greenpeace wants Unilever to support an immediate moratorium on the destruction of rainforest and peatland areas in Indonesia to grow palm oil.
Unilever has agreed to do this. We believe that this can be done without curtailing the expansion of production because there is ample un-forested land available to meet even the most optimistic estimate of demand, and because yields would improve significantly if everyone adopted the principles of sustainable agriculture.
Unilever commits to certified sustainable palm oil
On 1st May 2008, we announced our intention to have all of our palm oil certified sustainable by 2015. The press release states that we will start by using certified palm oil as it becomes available in the second half of 2008 and will look to have all the palm oil we use in Europe fully traceable by 2012. In announcing this commitment, we promised to report on our progress. See the news updates section below.
In setting this ambitious goal we recognise that we will have to continue to work in partnership with governments, suppliers, NGOs and users of palm oil.
Announcing the initiative at the Prince of Wales' May Day Climate Change Summit in London, Unilever Group Chief Executive Patrick Cescau said: "Palm oil is an important raw material for us and the whole consumer goods industry. We use a substantial amount of palm oil and we want to be an agent for positive change, as we have been in fish, tea and other areas.
"We started work on sustainable palm oil ten years ago by developing and sharing our own guidelines and good practices with growers and suppliers, leading to the setting up of the Roundtable on Sustainable Palm Oil. Through the RSPO, we have continued to work hard to build an industry consensus on criteria for sustainable palm cultivation.
"Now we need to take the next step. Suppliers need to move to meet the criteria, by getting certified both the palm oil from their own plantations and the palm oil they buy from elsewhere. We also intend to support the call for an immediate moratorium on any further deforestation for palm oil in Indonesia. We are committed to doing this because we believe it is the right thing to do for the people who use our products, for the environment and communities in and around which palm oil is grown and for our business and our brands."
Other material released to coincide with this announcement includes:
News updates
In announcing our commitment to certified sustainable palm oil, we promised to report on our progress. Here are our updates:
14th November 2008: Unilever buys first batch of certified sustainable palm oil
Unilever has secured palm oil from the first ever batch to be officially certified as 'sustainable'.
At a celebration in Rotterdam on 11 November, Unilever joined other partners of the Roundtable for Sustainable Palm Oil (RSPO) to accept the first delivery of certified sustainable palm oil.
As chair of the RSPO, the day marked a milestone for Unilever, towards achieving a much more ambitious and publicly announced commitment – sourcing 100% sustainable palm oil by 2015.
Nils van Dam, SVP, Spreads and Dressings, Europe, accepted the delivery on behalf of Unilever.
He told the gathering of media, not-for-profit groups and RSPO stakeholders: "For us it is very important to buy palm oil from sustainable sources, and we also know that this is what consumers want. This is why – together with others – we helped to found RSPO."
Unilever's Director for Sustainable Agriculture, Jan Kees Vis is the President of the RSPO. He described the arrival of the first certified sustainable palm oil in Europe as a "small but significant step" towards mainstreaming sustainability in the palm oil sector.
Transparency and credibility are paramount
On the same day as the arrival of the palm oil, Greenpeace released a report claiming that the supplier of the first batch of certified oil, United Plantations, had violated RSPO sustainability standards elsewhere.
Investigators are already on the ground in Indonesia looking into the allegations. While United Plantations has since issued a strong statement saying it can prove all the allegations are unfounded, it also said it would cooperate fully with the RSPO.
Jan Kees says the extra scrutiny – and dealing with it properly – is important to maintain RSPO's credibility:
"It's vital that organisations like Greenpeace can challenge the process at all stages. We will do everything we can to improve things that are not up to standard yet… as with any scheme that's in its infancy, the RSPO will evolve and strengthen over time."
Cultivating change
With 250 members, the RSPO now accounts for half of the palm oil market. But according to Gavin Neath, SVP, Global Communications, with the media focused on the issue of deforestation, it also highlights a need for extra vigilance on Unilever's part. "It's very important that we can track the full life cycle of our raw materials, this is why we are working with our suppliers through discussions and audits to ensure they comply with our standards."
The next important developments on palm oil are expected later this month, at the annual Roundtable for Sustainable Palm Oil in Bali. Several resolutions will be voted on, supporting Unilever and its partners' overall goals towards preventing palm oil-related deforestation.
22nd August 2008: Update on Unilever's commitment to certified sustainable palm oil
In May 2008 we made public our commitment to certified sustainable palm oil and our support for the moratorium on deforestation for palm oil in South East Asia.
What have we done since this announcement?
Supporting the moratorium on deforestation for palm oil in South East Asia
Ending deforestation is critical to protecting the global climate, for biodiversity and for forest-dependent communities. Decisive action by governments and industry involved in the rapidly expanding palm oil sector is critical to stopping rainforest destruction.
To prevent the climate-changing emissions and biodiversity loss associated with the expansion of oil palm plantations in South East Asia, we have, together with Greenpeace, developed an action plan to support a moratorium on continued deforestation.
Werealisethis is not something we can do alone. We therefore decided we would need to reach out to others in the sector. Since May, we have assembled a large global coalition of over 30 companies, banks and NGOs who wish both to accelerate the creation of a market for sustainable palm oil and to support a moratorium on any further deforestation associated with the cultivation of palm. The companies who have joined include some of the largest food, home and personal care companies in the world and global retailers. We hope that with the help of the other coalition members, we will encourage other companies that produce, trade or consume palm oil to support this moratorium.
Together with Greenpeace, we have articulated a set of draft principles defining what the moratorium will mean in practice. These principles are designed to be both pragmatic and yet have real teeth.
We seek to effect the changes for which we are campaigning through the Roundtable on Sustainable Palm Oil (RSPO). To that end, we have developed a draft resolution to be submitted to the General Assembly of the RSPO in Bali in November 2008.
The basis for this moratorium is mapped areas covering Indonesia, Malaysia, Papua New Guinea and the Solomon Islands. The forest cover maps that we plan to use have been developed bySarVision/WageningenUniversity in collaboration with the Indonesian Ministry of Forestry. We are sending both the draft principles and the draft resolution to coalition and RSPO members for comments, and based on those, we will address concerns and improve the two documents.
The coalition will need to do more work in the coming months. We will have to work with oil palm producers and others to implement the moratorium on the ground, and we will need to collectively develop a system for supply chain traceability and monitoring that excludes palm oil sourced from corporate groups engaged in deforestation andpeatlandclearance from the time that the moratorium is agreed.
Finally, we are preparing a lobbying strategy in order to put our case to governments around the world.
22nd August 2008: Unilever statement on concerns about the protection of the Tanoé Forest in the Ivory Coast
The West African Primates Conservation Association (WAPCA) has recently contacted Unilever to ask for our help in protecting biodiversity and endangered primate species in the Tanoé Forest in the Ivory Coast.
WAPCA and its partners in the Ivory Coast (the University of Cocody - Centre Suisse de Recherches Scientifiques en Côte d'Ivoire, SOS Forêt and the Nature Conservation Society of Ivory Coast) have expressed concerns that palm oil company Palmci (which has connections to Unilever) might go ahead with a possible expansion into the Forest without having done an Environmental Impact Assessment (EIA).
We have assured WAPCA and the local organisations that we will do everything we can to ensure that there is no damage to the biodiversity of the Forest and that endangered species are protected.
Palmci confirmed that it has been granted 6 000 hectares of concession area in the Tanoé Forest but has assured Unilever that their planned approach has always been to conduct an Environmental Impact Assessment before exercising their concession rights. Palmci has also ensured that the Environmental Impact Assessment is conducted in line with both national legislation and the criteria of the Roundtable on Sustainable Palm Oil (RSPO). There will not be any expansion activity before the Environmental Impact Assessment has beenfinalisedand agreement reached on how the biodiversity of the region and its endangered species can be protected.
Unilever's connection to Palmci is as a principal end-user of the palm oil and hitherto as a minority shareholder, though as part of a wider restructuring of Unilever's business in Cote d'Ivoire, we have signed an agreement (due for completion by end 2008) to sell our interests in local oil palm plantations. We will however remain a principal end-user of palm oil from Palmci plantations. As such, and in line with the commitment to certified sustainable palm oil that Unilever made in May 2008, we will use our influence to ensure adherence to best practice in terms of sustainability and Environmental Impact Assessments. This is also stipulated in the terms of the sale of our plantations.
