Palm Oil

Roundtable on Sustainable Palm Oil reinstates Nestlé’s membership

This article has been updated.

The Roundtable on Sustainable Palm Oil (RSPO) has readmitted the world’s largest food and beverage company, Nestlé, whose membership it suspended last month over breaches of the RSPO’s statutes and code of conduct.

The reinstatement followed Nestlé’s submission of its time-bound action plan to achieve 100 percent RSPO-certified sustainable palm oil by 2023.

Nestlé, which has its headquarters in Vevey, Switzerland, has more than 2,000 brands, including KitKat, Nescafé, Maggi, and Perrier sparkling water, and is present in 189 countries around the world.

The company’s other brands include Purina pet foods, S.Pellegrino, Milo, and Carnation milk. The company produces Nesquik and numerous breakfast cereals, including Cheerios and Shreddies.

The suspension of Nestlé’s RSPO membership resulted in the suspension of RSPO certification at all its facilities and subsidiaries.

The company no longer had the right to state that it uses Certified Sustainable Palm Oil (CSPO).

The company’s membership and certification status have both been reinstated.

Nestlé was in breach of the RSPO statutes and code of conduct because it had not submitted the required Annual Communication on Progress (ACOP) report for 2016, and, for 2017, it submitted the ACOP report without a time-bound plan.

Its membership payment was also overdue.

The company’s reinstatement became effective yesterday (Monday).

The RSPO and Nestlé issued a joint statement saying that they shared the vision of transforming the palm oil industry for a sustainable future.

They said they believed that achieving this “required the entire industry to work towards greater transparency, inclusiveness, direct supply chain engagement, and capacity building throughout the supply chain”.

Nestlé’s global head of responsible sourcing, Benjamin Ware, said: “Transparency in our supply chain has always been a priority. Nestlé has always been committed to implementing responsible sourcing and has made significant progress towards our commitment to using fully responsibly sourced palm oil.”

He said that Nestlé supported the RSPO’s role in driving industry-wide change and appreciated its decision following the submission of Nestlé’s action plan.

The action plan focuses on increasing traceability primarily through segregated RSPO palm oil, Ware says. “This builds on Nestlé’s ongoing activities to achieve a traceable and responsibly sourced palm oil supply chain.”

Ware said that Nestlé would play a leading role within the RSPO by participating in working groups and sharing its experiences in addressing some of the critical environmental and socio-economic challenges affecting the sector.

“In line with the RSPO’s objectives, this work will focus on preventing deforestation, particularly the protection of peatland and High Carbon Stock land, as well as respecting human rights across the value chain.”

The Chief Executive Officer of the RSPO, Darrel Webber, said that the RSPO was more than a certification scheme.“It is a commitment scheme,” he said.

When joining the RSPO, all the roundtable’s members make a commitment to transforming the palm oil industry, Webber says.

“Nestlé has pledged to step up their efforts in working actively on solutions within the RSPO system, via active participation.

“It’s with this in mind that we are welcoming Nestlé back to the roundtable, confident they will live up to our membership obligations and succeed in delivering on their time-bound plan.

“We trust that by working collectively we are able to realise a sustainable, respectful, and responsible palm oil industry.”

In the ACOP reports, RSPO members are required to specify the steps taken in the previous year and specific steps intended for the coming year and for the long term.

They must do this in the form of a time-bound plan detailing how they are working towards producing or buying certified sustainable palm oil and applying any or a combination of the RSPO-approved supply chain mechanisms.

They are expected to specify volume or percentage targets.

Members are required to make an annual report about the progress of their time-bound plan.

NGO reactions

The RSPO has been criticised by several NGOs for not taking adequate action against rogue companies.

The forests communications manager at the Rainforest Action Network (RAN), Emma Lierley, said it was heartening to see the RSPO requiring transparency from its members, but both Nestlé and the RSPO had to do more.

“The RSPO continues to certify palm oil that has been produced by child labour, poverty wages, and toxic working conditions. As it stands now, its ‘sustainability’ certification is no guarantee, and Nestlé must do more to ensure that it does not source conflict palm oil for its products.

“On Monday, a broad and international coalition of NGOs representing human rights, labour and environmental concerns issued an open letter to the RSPO demanding that it strengthen its standard as a matter of urgency. This, and not the case of Nestlé, is one of the more pressing tests facing the RSPO.”

The 62 NGOs were writing with regard to proposed revisions to the RSPO Principles and Criteria, the second draft of which was released recently for public consultation that is due to end on August 4 this year.

They said they were concerned about existing deficiencies in the proposed requirements.

“Stronger reforms are needed to bring the P&C in line with the ‘no deforestation, no peat, no exploitation’ (NDPE) standards adopted by the world’s leading palm oil traders and end-users,” they wrote.

“The current draft contains some positive aspects that should be supported and reinforced, but there are urgent issues that must be addressed if the RSPO is to become a credible and inclusive verification system to assess compliance with a NDPE standard.”

The NGOs say that while the current proposal prohibits new plantings on peat, other than to conduct “drainability assessments”, there is no requirement that plantation companies “retreat from peat” or a specific date by which existing unviable plantations must be rewet.

“This is particularly important for critical peatland ecosystems that urgently need to be rewet, rehabilitated, and/or restored,” they stated.

The current proposal incorporates additional and improved indicators to address human and labour rights, the NGOs say.

“However, more is needed. Living wages and protections for human rights defenders must be established. Abuses that remain rampant – including forced and unpaid labour, precarious work status, and the expropriation of lands (e.g. using eminent domain) – must be addressed through strengthened standards, verification and enforcement systems.”

The NGOs said it was critical that buyers insist that the RSPO also strengthens its auditing systems to include best practices and enhanced mechanisms to enforce its standards.

“Priority best practices in social auditing need to focus on both human and labour rights. Enhanced mechanisms must include the enforcement of consistent sanctions against member companies that violate the RSPO Principles and Criteria and
Code of Conduct.

“Without enforcement, the RSPO certification will not succeed offering credible
NDPE assurances to the marketplace.”

RAN’s agribusiness campaign director Robin Averbeck said at the time of Nestlé’s suspension: “For two years, the RSPO has failed to suspend its member Indofood while the company has continuously violated workers rights, the RSPO standard, and Indonesian law,” Averbeck said.

The RSPO, Averbeck says, is allowing Indofood to continue selling oil that is said to be certified and sustainable, but is produced by children, unpaid women, and other exploited workers.

The forest campaigner for Greenpeace Southeast Asia, Bagus Kusuma, says Greenpeace has raised at least five cases of RSPO members destroying rainforest with the RSPO in the past year, including deforestation by members of RSPO’s board of governors and its complaints panel.

Bagus points to a Greenpeace International investigation that revealed that RSPO board member Wilmar International is still linked to forest destruction for palm oil almost five years after making a no-deforestation commitment.

He said mapping and satellite analysis shows that Gama, a palm oil business run by senior Wilmar executives and their relatives, has destroyed 21,500 hectares of rainforest or peatland.

Nestlé is one of the companies that source from Wilmar. Others include Colgate-Palmolive, Hershey, Kellogg, L’Oréal, Mars, Mondelēz, PepsiCo, Procter & Gamble, PZ Cussons, Reckitt Benckiser, and Unilever.

There are currently 11 companies – mostly palm oil processors and/or traders – whose membership of the RSPO is still suspended. The membership of 13 companies – also primarily palm oil processors and/or traders – has been terminated.

The RSPO, which is based in the Malaysian capital, Kuala Lumpur, has members from numerous sectors: oil palm producers, processors, and traders, consumer goods manufacturers, retailers, investors, and environmental and social non-governmental organisations.

Palm oil is the most ubiquitous edible oil on the planet. It is found in products ranging from soap, cosmetics, and cleaning products to candles, chocolate, and ice cream, and it is also used to make biofuel.

Oil palms are grown in 43 countries and the plantations are estimated to cover about 27 million hectares worldwide. More than 85 per cent of the world’s palm oil is produced in Indonesia and Malaysia.

There are four types of Certified Sustainable Palm Oil: Identity Preserved (IP), Segregated, Mass Balance, and Book & Claim. IP oil is from a single certified source and Segregated is from different certified sources. Both are kept separately from ordinary palm oil throughout the supply chain. Mass Balance oil is from certified sources, but is mixed with ordinary palm oil in the supply chain. Under the Book & Claim system, manufacturers and retailers buy credits from RSPO-certified growers and crushers and independent smallholders.


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