RSPO — Research Notes — Pullback Podcast

What is Palm Oil?

Palm oil comes from the fruit of oil palm trees (elaeis guineensis). Palm kernel oil comes from crushing the kernel (the stone in the middle of the fruit). 66 million tons of palm oil is produced annually, making it the most commonly produced vegetable oil. Global production of palm oil has doubled in the last decade. Palm oil plantations cover more than 27 million hectares of the Earth’s surface.

There are approximately 200 alternate names for palm oil and palm oil derivatives used in cleaning products and cosmetics, which can make it really difficult to know if there is palm oil in what you’re buying.[1]

But here’s a trick: there are four root words that give you an indication that an ingredient might be palm oil-derived (but not necessarily so):

Palm-

Palm kernel oil
Palm fruit oil
Palmate
Palmolein
Palmitate
Palmitic acid
Palmityl alcohol
Hydrated palm glycerines
Etyl palmitate

Stear-

Sodium stearate
Stearic acid
Pentataerythrityl tetraisostearate
Octyldodecyl stearoyl stearate

Laur-

Sodium lauryl lactylate
Sodiul lauryl sulphate
Sodium laureth sulfare

Glyc-

Glyceryl
Hydrogenated palm glycerides

But there are a bunch of palm derivatives that don’t use these roots (e.g., sodium kernelate, elaeis guineensis) and sometimes palm oil can be labelled more generically, as vegetable fat or vegetable oil. Here is a list of 25 sneaky names for palm oil. If you live in an EU country, palm oil can’t be labelled as a generic vegetable oil.[2]

More than 50% of packaged supermarket products contain palm oil. Palm oil is in:

Packaged foods like pizza (dough), doughnuts, chocolate, margarine, noodles, ice cream, bread, chips, cookies. It’s used where you need fat of some kind.
Personal care products and cosmetics like deodorant, shampoo, toothpaste, and lipstick. Some cleaning products also.
Animal feed
Biofuels

It is also a popular cooking oil in Asian and African countries. 40% of the world’s palm oil is consumed in China, India, and Pakistan.[3] The food industry used about 72% of all palm oil, cosmetics/cleaning take another 18%, and the remaining 10% goes to biofuels and animal feed.[4]

Why is Palm Oil in Everything?

Palm oil has a lot of useful properties. It is semi-solid at room temperature, so it can keep spreads spreadable. It is resistant to oxidation, so it can give products a longer shelf-life. It is stable at high temperatures, so it helps give fried products a crispy and crunchy texture. And it is odorless and colourless, so it doesn’t alter the look or smell of food products.

Palm oil is also used in some products for its health properties. Palm oil doesn’t have trans-fat and has a lower saturated fat concentration than butter. Other vegetable oils have to be partially hydrogenated to make them more solid, but that process of artificial hydrogenation creates trans-fatty acids.[5] Palm oil is naturally hydrogenated. When scientific consensus was forming around trans-fats, Unilever led the shift to palm oil in food products.

Palm oil and palm oil derivatives also replaced animal-based fats in foods, as well as cleaning and personal care products (E.g., soaps with animal tallow[6]). Palm oil and palm kernel oil possessed the same properties as animal tallow, which made them the only suitable plant-based alternative.[7] Consumers were already pushing the market toward plant-based alternatives, but the BSE outbreaks in the late 1980s and early 1990s triggered a larger shift toward palm oil.[8] The consumption of animal fats per capita reached its peak in the 1980s and has been in decline since.

Palm oil is also cheap because it’s a productive crop and because oil palm trees demand less work and production inputs than other oil crops. For that reason, it is a popular cooking oil in Asian and African countries.

Where is Palm Oil Produced?

Oil palm trees are native to West Africa but were brought to Southeast Asia in the 19th century. Malaysia and Indonesia produce 87% of global palm oil. However, there are 42 other countries that also produce palm oil. That includes countries in West and Central Africa, Southeast Asia, and Central and tropical South America.[9]

Palm Oil Production

Oil palms are grown and harvested on large-, medium-, and small-scale palm oil plantations.[10] The palm oil industry is dominated by about a dozen corporations that operate large-scale plantations and mills.[11] The three largest players – Musim Mas, Wilma, and Sime Darby, account for 25% of palm oil production.[12] (While these are big multinationals, they are small in comparison to the biggest agribusiness corporations, the “ABCDs”, which are headquartered in western countries). There are at least a million small-scale oil palm producers in Indonesia alone.[13]

Oil palm trees grow up to 20 metres tall and have an average life span of 25 years. They start to bear fruit after three years and reach peak production between years 6-8. Fruit bunches can contain from 1-3,000 individual fruits, which are the size of small plums. The bunches weigh 10-25kg. Harvesting palm fruit is physically demanding. Harvesters use long steel poles with a sickle at the end to cut the palm fruit bunches down. The bunches are then loaded onto wheelbarrows and taken to collection points.

Like sugarcane, oil palm fruit has to be processed quickly after harvesting – within 24 hours. For this reason, palm oil refineries are usually situated within-country.

Environment

Deforestation

Palm oil is a major driver of deforestation. For instance, approximately 55% of newly developed palm oil plantations in Malaysia and Indonesia from 1990-2005 resulted in deforestation.[14] As the palm oil industry expands, the space for new palm oil plantations is often made through deforestation and peatland clearing.

Palm oil is currently responsible for about 8% of deforestation – that’s a big chunk of the 53% of deforestation caused by agriculture. But keep in mind that 24% of deforestation is from land used for livestock, while 19% is coming from soybeans (which are mostly going to feed animals) and 11% from corn (same). So, if we are looking at changing one consumption practice to counter deforestation, palm oil isn’t the place to start.

And even in the big palm oil producing countries like Indonesia, land clearing for pulp, paper, and timber is a bigger source of deforestation.

However, the forests that are being cleared for palm oil plantations are in some cases particularly biodiverse or particularly efficient carbon sinks. Indonesian forests store even more carbon per hectare than the Brazilian Amazon. Some Indonesian forests are called “peatlands”, which are low-lying rainforests located close to coastal areas. The peat is under the forest, and it is basically a below-ground accumulation of decayed vegetation. It was formed in swampy conditions where plant material fails to fully decay and can build up to a depth of 10 metres or more over thousands of years.

The peat lands are an immense source of stored carbon. They can store up to 20 times as much carbon as tropical rainforests on normal mineral soils. As the forests above them are deforested, those sinks are released – making for something some have called a “carbon time-bomb”. Also, as the industry expands there is concern that its impact on deforestation could increase.

And palm oil could be less destructive. Deforestation could be reduced or avoided by planting in areas that are already deforested.

Biodiversity Loss

This problem is connected to the problem of deforestation and other land conversion for palm oil plantations. Palm oil expansion could affect 54% of threatened mammals and 64% of threatened birds globally.

Some of the species threatened by palm oil expansion include the cotton top monkey, the chimpanzee, Sumatran tigers, African forest elephants, orangutans, gibbons, sun bears, kangaroos, and cassowaries. For example, 10,000 of the estimated 75-100,000 critically endangered Bornean orangutans are currently found in areas allocated to palm oil.

In addition to the loss of direct habitat, palm oil plantations can increase human-wildlife conflict with species like orangutans and tigers. Each year 750-1,250 orangutans are killed during human-orangutan conflicts, often linked to expanding agriculture.

A Jakarta-based ecologist has referred to palm oil plantations as “green deserts” because they are monocultures. While these are plants, palm plantations in Southeast Asia are an introduced species that does not interact very well with local ecology, so very little biodiversity exists within them.

Unfortunately, boycotting palm oil is likely to displace rather than halt biodiversity loss because it would increase the production of other oil crops. So the International Union for Conservation of Nature (IUCN) and WWF prefer to push for palm oil sustainability, rather than a boycott or ban of palm oil.

Sustainable palm oil would involve putting an end to the clearing of native tropical forests for new palm oil plantations, and limit demand for palm oil for non-food uses. It would also ask existing palm oil plantations to manage their land responsibly by setting aside forest and other areas identified as important for biodiversity and carbon.

Climate Change

Oil palms are a very productive plant. One of the reasons it was produced initially was environmental sustainability: because palm oil is so productive, you need less land to grow it.

The problem here is land conversion. Forests and peat lands are carbon sinks. When these lands are converted to palm oil plantations, it results in the release of greenhouse gases. As well, we lose those carbon sinks. Indonesia’s peatlands have gone from a carbon sink to a globally significant source of emissions thanks to deforestation. Oil palms do absorb carbon dioxide, but less effectively than forests.

Also, fire is used to clear lands for palm oil plantations, which emits GHG in addition to creating air pollution. 80% of the fires in Indonesia in 2019 were being set to clear land for palm oil plantations.

The challenging thing here is that oil palm production is more productive than substitute crops. And substitutes like coconut oil have their own environmental problems. We would likely have to convert even more land to keep up with demand.

Chemicals Use and Pollution

Palm oil plantations use a range of pesticides and herbicides, as well as large amounts of fertiliser. These products can pollute soil and groundwater. Although palm oil plantations aren’t large users of pesticides and fertilizers overall, these chemicals are often used indiscriminately – which can result in water pollution.

These chemicals also pose a risk to the people working on palm oil plantations. One herbicide used on palm oil plantations is paraquat dichloride. Paraquat is a highly toxic chemical, and for that reason is banned in the EU as well as several other countries. In Indonesia it is a restricted substance. Amnesty International found evidence of the use of paraquat on Indonesian plantations, as well as the absence of training and sufficient personal protective equipment. Workers described negative health effects after exposure to the chemicals. Palm oil mills also pollute, producing 2.5 metric tons of effluent for every metric ton of palm oil it produces.

People

Oil palms are one of the most profitable crops for farmers, which in part is a success story: palm oil has helped to reduce rural poverty in places like Indonesia, for example. Palm oil has the potential to improve incomes and employment where it is produced. Millions of smallholders rely on palm oil for their livelihoods in Malaysia and Indonesia.

On the other hand, the oil palm industry can sometimes hurt communities economically because they lose access to forests and it may not be compensated sufficiently by economic gains from cultivating oil palms.

Working Conditions

Amnesty International has reported on the labour abuses on palm oil plantations. Specifically, they looked at plantations in Indonesia linked to Wilmar, the largest processor and merchandiser of palm oils (they control 43% of the global palm oil trade).

On those plantations, Amnesty International found evidence of forced and child labour, gender discrimination, as well as exploitative and dangerous working conditions.

Amnesty concluded that these are not isolated incidents, but rather linked to the systemic business practices of Wilmar and its subsidiaries and suppliers, such as the low level of wages, use of targets and “piece rates” (workers are paid based on tasks completed rather than hours worked), and a complex system of financial and other penalties. Because of these systems, workers that do not meet their targets get their already low salaries deducted.

Targets are set by individual companies and “appear to be set arbitrarily to meet companies’ needs rather than being based on a realistic calculation of how much workers can do in their working hours.” Because of the targeting system, workers on the plantations get help from their spouses, children, and others to complete tasks. Amnesty documented evidence of the involvement of children in hazardous tasks, which is illegal under Indonesian law, on plantations owned by two Wilmar subsidiaries and three Wilmar suppliers. Some were as young as eight.

Amnesty found that workers, especially women, are employed under casual work arrangements which make them vulnerable to abuse. While most harvesters (always men) are employed on permanent employment contracts, most plant maintenance employees are women and are employed on a casual basis.

Employers can penalize workers for failing to meet targets or for mistakes in their work (e.g. picking unripe fruit). This penalty usually has a financial dimension. These penalties are not transparent, which allows employers to exact work under the threat of loss of pay or employment. Amnesty International has documented instances of this, which it considers to constitute forced labour.

Indigenous Peoples and Nearby Communities

Indigenous peoples are losing their land to palm oil plantations. This is especially a problem in Indonesia. Land use rights in Indonesia are often disputed due to conflicts between customary land rights and formal property ownership.[15] Weak laws, poor government oversight, and the failure of palm producing companies to fulfil their human rights responsibilities have led to a loss of land and livelihood opportunities for Indigenous people in Indonesia, according to Human Rights Watch. Companies have failed to consult with Indigenous peoples and to provide just and fair compensation for losses suffered.

In some cases, Indigenous peoples are forcefully removed from their lands, which is one reason that the Rainforest Action Network has used the term “conflict palm oil” to describe the industry. Private armies and paramilitary groups are deployed sometimes, and community members have been killed in Indonesia. There are upwards of 600 ongoing land disputes between palm oil companies and rural communities.

Surrounding communities can also be made more at risk of flooding when palm plants are placed on steep slopes, causing soil erosion.

Food Security

Another problem with the conversion of agricultural lands for palm oil production is that it can hurt local food security (same with all cash crops).[16] And because palm oil is increasingly being used for biofuel, prices are increasing which can sometimes make it unaffordable for communities proximate to these plantations.[17]

Roundtable on Sustainable Palm Oil

What is it?

The Roundtable on Sustainable Palm Oil (RSPO) is a sustainable palm oil certification that was founded in 2004. Like the Marine Stewardship Council, RSPO was founded through a collaboration between the World Wildlife Fund and Unilever, as well as Asian producers and a few other Western brands (e.g. Nestlé, Tesco, Cargill).[18] It has managed sustainability standards for palm oil production since 2008.[19] An estimated 14% of palm oil is RSPO certified.

The backbone of the RSPO standard is a generic set of Principles and Criteria adopted in 2005.[20] There are eight core Principles:

Commitment to transparency,
Compliance with applicable laws and regulations,
Commitment to long-term economic and financial viability,
Use of appropriate best practices by growers and millers,
Environmental responsibility and conservation of natural resources and biodiversity,
Responsible consideration of employees, smallholders, and other individual communities affected by growers and mills,
Responsible development of new plantings, and
Commitment to continuous improvement.[21]

Each of the eight principles has corresponding criteria, which can also differ from country-to-country and location-to-location.[22] RSPO creates standards for the growth of oil palms as well as the palm oil milling process.[23] It also has standards for tracing palm oil through the supply chain (which is called chain-of-custody certification).[24]

There are also separate standards for smallholder palm farmers. That was introduced a bit later than the main standard, and it responds to the challenges that small producers can have in obtaining sustainability certifications.[25] Basically, the idea is to ask smallholders to make improvements over time, rather than asking them to do everything before obtaining certification. That program was just introduced in 2019, so it isn’t clear how well it will work.

RSPO is the largest and by many accounts the most robust palm oil certification available, but it has still been widely criticized.

Criticisms

RSPO is a multi-stakeholder organization (meaning there are different voices involved in defining standards). The seven groups of stakeholders included in the RSPO’s general assembly are: palm oil growers, palm oil processors and/or traders, consumer goods manufacturers, retailers, banks and investors, environmental and nature conservation NGOs, and social development NGOs.[26]

However, RSPO has been criticized for being industry-dominated and for failing to engage key vulnerable stakeholders, such as smallholding producers, labour unions, social and environmental groups, indigenous peoples and organizations, and women’s groups.[27]For instance, only a small proportion of palm oil-related land use conflicts are sufficiently acknowledged and resolved within RSPO’s institutional dispute resolution mechanisms.[28]

Greenpeace, Friends of the Earth, and other NGOs have criticized RSPO for the low stringency of compliance enforcement.[29] For instance, Amnesty International concluded that “the RSPO is acting as a shield which deflects greater scrutiny of Wilmar’s and other companies’ practices.”

Also, the majority of certified palm oil is mixed with conventional oil during transportation and as a result consumer products with the RSPO logo will most likely contain unsustainable palm oil.

Another argument is that the RSPO standard gives national governments an excuse to forego further public regulation of the industry.[30]

Critics also point to weaknesses in the standards themselves. RSPO initially avoided defining what sustainability means, going forward with the standard first.[31] RSPO’s emphasis on consensus decision-making, critics say, makes it incapable of dealing with contentious or controversial issues.[32] Even the moderate stringency of RSPO’s standards have led major stakeholders to leave.[33]

Although RSPO has devoted some attention to the issue, it is still difficult for smallholder palm producers to afford certification.[34] And small- and medium-sized producers have less of an incentive to get RSPO certified because they often supply Indian, Chinese, and Pakistani markets[35]

Kristen mentioned a book chapter that looks at the role of auditors in sustainability labelling. The book is called Transnational Business Governance Interactions.

Why is Certification Uptake so Low?

Most sustainability labels deal with agricultural products for which there is a specific consumer product with a recognizable link to the agricultural product – e.g., coffee, paper, sugar, cocoa, fish.[36] That isn’t the case for palm oil.

That makes it much more difficult to get companies to sign onto voluntary standards for palm oil. Consumers mostly don’t know that there is palm oil in a product. Producers mostly don’t want to emphasize that there is palm oil in their items, since it has baggage and is not the major ingredient. That makes it more difficult to develop a price premium for certified palm oil. And that problem is compounded because even companies like Unilever that might use RSPO certified palm oil are not necessarily going to put the label on, say, their peanut butter because they want to emphasize the primary ingredients instead.

Another challenge is palm oil’s position in the market. Because it is mostly used as a cheap additive, producers mostly do not want to take on the increased cost and because there may not be much potential to charge a price premium. That problem is compounded because so much of the palm oil market is from non-wealthy countries, and there is very little consumer demand for sustainability labelling there.

Boycott v. Sustainability Certification

Palm oil mainly ubiquitous because it is cheap. And there are no real alternatives that wouldn’t cause problems. So:

What Can You Do?

Social and Environmental Labels

Assuming that you aren’t going to go palm oil-free: the RSPO is better than nothing, but it’s not great.

The WWF has a palm oil buyers scorecard where you can search brands for information about whether they are RSPO members or not (though again RSPO is flawed). It only has a few brands, though.

Rainforest Action Network recommends looking for the Palm Oil Innovation Group (POIG) standard, which they see as the only standard truly free of deforestation, peatland destruction, and exploitation. All POIG retailers and manufacturers are RSPO members, and must be certified – so it’s basically a stronger version of RSPO. POIG doesn’t have many certified products right now, but it might be the solution of the future. Some noteworthy POIG members include: Danone, L’Oréal, and Barry Callebaut. POIG NGOs include: WWF, Greenpeace, RAN, Verité (fair labour group), Sumatran Orangutan Society, and Orangutan Land Trust.

For workers’ rights, try the RSPO Smallholder Standard (although this might mean weaker sustainability standards). Another option is FairPalm.

Fairtrade hasn’t created standards for palm oil yet, but there is one available label that is substantively like fairtrade: FairPalm is a label for palm oil grown by smallholders in West Africa.

Or try doubling up with organic labels – which can at least address the harmful chemicals problem. Organic labels deal with the use of pesticides and fertilizers, so on their own they cannot address the other problems with palm oil. Unfortunately, RSPO is the best we have on that.

Ethical Consumer Worst and Best Ratings

Ethical Consumer has put together a list of brands to avoid (received their “worst” rating on palm oil use). Here are some of the brands that I recognized from that list:

Nestlé – Kit Kat, NESCAFÉ, Perrier
Mondelez – Cadbury
Domino’s Pizza
Yum! Brands – Pizza Hut, KFC
Subway
Itsu
Prêt-à-manger
TGI Friday’s
Pizza Express
L’Occitane
Proctor and Gamble – Pampers, Head and Shoulders

Ethical consumer also has a list of recommended brands (received their “best” rating on palm oil use). I only recognized a few brands from this list:

Marks and Spencer
Waitrose
Lush
Nivea
Georganics

Get Involved!

Get involved with campaigns asking companies to implement sustainable palm oil practices. Write to companies to get them to use sustainable palm oil. Find out more about Michelle Desilets by following her on twitter.

Endnotes

[1] Ethical Consumer Podcast. (2018). Complex World of Palm Oil. Ethical Consumer.

[2] Paiement, Phillip. (2017). Transnational Sustainability Laws. New York: Cambridge University Press.

[3] The Food Chain Podcast. (2019). Can Palm Oil Be Sustainable? BBC World Service.

[4] Ethical Consumer Podcast, “Complex World of Palm Oil”.

[5] Ethical Consumer Podcast, “Complex World of Palm Oil”.

[6] Audio Long Reads. (2019). How the World Got Hooked on Palm Oil. The Guardian.

[7] Audio Long Reads, “How the World Got Hooked on Palm Oil.”

[8] Audio Long Reads, “How the World Got Hooked on Palm Oil.”

[9] Paiement, Transnational Sustainability Laws.

[10] Paiement, Transnational Sustainability Laws.

[11] Paiement, Transnational Sustainability Laws.

[12] Paiement, Transnational Sustainability Laws.

[13] Paiement, Transnational Sustainability Laws.

[14] Paiement, Transnational Sustainability Laws.

[15] Paiement, Transnational Sustainability Laws.

[16] Paiement, Transnational Sustainability Laws.

[17] Paiement, Transnational Sustainability Laws.

[18] Paiement, Transnational Sustainability Laws.

[19] Paiement, Transnational Sustainability Laws.

[20] Paiement, Transnational Sustainability Laws.

[21] Paiement, Transnational Sustainability Laws.

[22] Paiement, Transnational Sustainability Laws.

[23] Paiement, Transnational Sustainability Laws.

[24] Paiement, Transnational Sustainability Laws.

[25] Paiement, Transnational Sustainability Laws.

[26] Paiement, Transnational Sustainability Laws.

[27] Paiement, Transnational Sustainability Laws.

[28] Paiement, Transnational Sustainability Laws.

[29] Paiement, Transnational Sustainability Laws.

[30] Paiement, Transnational Sustainability Laws.

[31] Paiement, Transnational Sustainability Laws.

[32] Paiement, Transnational Sustainability Laws.

[33] Paiement, Transnational Sustainability Laws.

[34] Paiement, Transnational Sustainability Laws.

[35] Paiement, Transnational Sustainability Laws.

[36] Paiement, Transnational Sustainability Laws.