Axing the link to deforestation

9th December 2011


Palmoil

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  • Procurement

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IEMA

London Zoo aims to source all of its palm oil sustainably by 2012. Ali Hines reports on its work with suppliers to meet that target

Palm oil is found in one-in-10 supermarket products, ranging from toiletries and cosmetics to confectionery and breads, in the form of a vegetable oil and a derivative. However, the production of palm oil has come under increasing scrutiny for its environmental and social impacts, with new plantations in Indonesia and Malaysia responsible for the destruction of valuable ecosystems.

Despite these issues, figures published by Defra this year reveal that just 24% of the 643,300 tonnes of palm oil imported into the UK each year are being sourced sustainably.

In its report Mapping and understanding the UK palm oil supply chain, Defra outlined potential policy options aimed at increasing the proportion of certified sustainable palm oil (CSPO) consumed in the UK, but some organisations, including the Zoological Society of London (ZSL), are already addressing the issue.

In parallel with major producers of consumer products, such as Unilever, ZSL, the operator of London Zoo, is committed by 2012 to purchasing only products that are either manufactured using palm oil certified as sustainably sourced by the Roundtable on Sustainable Palm Oil (RSPO), or are from suppliers that are committed to source only RSPO-certified palm oil by 2015 at the latest.

Palmed off

Although palm oil production has serious negative impacts, the industry also plays an important role in economic development, and palm oil is currently the most productive vegetable oil crop per hectare. Due to these factors, palm oil production will persist and increase in the future. The way forward is to strongly encourage producers to reduce their negative impacts.

ZSL’s supply chains are wide-ranging, including retail, catering, cleaning products and animal feed. It took the view that boycotting palm oil is not a practical solution, as it will merely serve to drive demand elsewhere due to the direct interchangeability of the commercial vegetable oil market.

As a critical element of achieving its objectives, ZSL recognised that good environmental management and sourcing RSPO-certified palm oil is key, helping to drive the market for sustainable palm oil forward and reduce the market price for CSPO. According to the RSPO, only 56% of available CSPO was purchased in 2010.

Step by step

The first step to meet ZSL’s target was to hold meetings with relevant staff from each department to educate them on the issue of palm oil and inform them of the organisation’s objectives. At the same time, ZSL gathered a full inventory of products and supplies purchased by the various departments.

Suppliers were then contacted via a sales or customer service representative, or often directly via the technical team, to ascertain their use of palm oil. This was an initial “softly, softly” approach of information gathering. If the company was using palm oil, they were asked first whether they were sourcing CSPO, and second, whether they had a policy or timebound action plan on their use of palm oil.

All information was recorded in a suppliers database detailing whether the company used palm oil and which products it was to be found in. ZSL also wanted to know whether the supplier’s palm oil procurement policy covered the whole of a company or if was on a product-by-product basis only – that is, whether the company did not use palm oil in the products it supplied to ZSL, but used it in other, similar products.

Meticulous recording of information was critical, both to promote transparency in the supply chain and inform suppliers of where changes needed to be made. For example, a supplier could use CSPO in its own branded goods, but supply products from another company that does not.

In a similar fashion, it may be the case that a company didn’t use palm oil directly, but bought it in through other ingredients. Such activity would also fall under the ZSL policy to ensure that only sustainable palm oil is being used throughout its supply chain. If a company is unable to provide evidence that their product components are being made with CSPO, then ZSL will seek an alternative.

Prioritising action

Following the initial information-gathering phase, products were ranked in terms of priority action for each department. For other organisations, additional information, such as the size and frequency of the order and cost may be a consideration when deciding whether or not to use a supplier, but at ZSL this was not particularly relevant due to the marginal amount of palm oil found in the products it uses.

But even if a company does not use palm oil in its products, it was still necessary to make it aware of, and sign up to, ZSL’s policy in order to cover a potential future switch to palm oil. This could take the form of a statement drawn up either by the company itself or by the relevant ZSL department. If a firm does use palm oil, it is required to produce proof of RSPO certification or have a public policy or time-bound action plan drawn up and submitted to ZSL.

A second series of meetings was held with staff in order to present and discuss the findings and develop an action plan, setting out recommendations to guide ZSL procurement decisions. At the same time, a suppliers code of conduct was developed, which could be sent out with “gentle” letters to the suppliers, along with a timeframe for what ZSL was asking.

It was also important to assess alternatives as a contingency in case of non-compliance by companies, not disregarding any contractual obligations.

ZSL supply chain

A review of the cleaning products used by ZSL revealed that many of them contained oil-based chemical derivatives in the form of oleochemicals; however, because oleochemicals are rarely differentiated based on the original feedstock, traceability is currently a major challenge. Some key industry players, such as P&G, have started working with their manufacturers and suppliers to identify the sources and encourage sustainable and responsible production and procurement practices. ZSL is not yet in a similar position.

The UK imports the majority of its palm oil in the form of palm kernel as a component of animal feed used for commercial livestock, pet food, and domestic and commercial fish food. Defra found that in 2009 the UK imported 663,300 tonnes of palm kernel meal (PKM), approximately 10% of the global output of PKM.

Currently there is little awareness of sustainability of palm oil in the feed industry. PKM is often described as a byproduct, and some have argued that for this reason sustainability concerns are not an issue. However, there are indications that this view is changing. For example, in November 2010, GreenPalm – a certificate trading programme supporting sustainable palm oil production – introduced tradeable certificates for PKM.

ZSL’s supply chain review revealed that the organisation does not currently procure animal feed containing palm-derived ingredients. The focus, therefore, has been on the retail and catering departments at ZSL. Palm oil is predominantly used in confectionery, breads and pastries, margarines and spreads and is principally listed as “vegetable oil” in the ingredients. Although E471 (emulsifier) can be derived from palm oil, this and other food additives derived from palm are oleochemical derivatives, and sustainable forms are unlikely to be widely available in the near future. As a result, ZSL’s activities have centred on tackling the use of palm oil as a vegetable oil.

A systems approach

In order to ensure the procurement strategy was robust, it was incorporated into ZSL’s environment management system (EMS) under its sustainable procurement policy.

The document sets out the main areas for palm oil procurement at ZSL; a procurement procedure designed to assist staff when purchasing products; supplier commitment requirements; how, and where, to record information; reporting of procedural failings; and a comprehensive list of company commitments on the sourcing of CSPO for referral.

The EMS ensures a concise procurement policy and procurement methodology is set out for staff, and also provides an opportunity for consistent monitoring as well as a mechanism to redress non-compliance, acting overall as a vehicle for positive change. It also offers the opportunity to review ZSL’s position statement on palm oil, which was amended after a full review of the supply chain and market levers, narrowing the focal area to that of palm oil as a vegetable oil.

At a wider level, the benefits of incorporating palm oil procurement into an EMS were engaging businesses and encouraging positive change, and improving staff morale and knowledge. ZSL now also has the opportunity to tell its thousands of visitors about incorporation, educating the public on the impacts of commercial palm oil production and the benefits of purchasing certified sustainable palm oil.

Following ZSL’s example, other zoos are now interested in tackling palm oil in the supply chain. As the larger retailers fulfil their commitments on palm oil over the next few years, hopefully this activity will trickle down to smaller businesses. It is only through increasing the awareness of consumers and putting pressure on retailers and suppliers that change will occur in the industry – a small step in protecting the world’s forests and their inhabitants.


For further information on ZSL’s biodiversity and palm oil programme, please contact Sarah Christie at [email protected].

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