vol 6 issue 1

Manufacturers slip away from palm oil

17 January 2011
By Carolyn Fry
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Man walking over barrels

Man walking over barrels

Palm oil export graph

Palm oil export graph

Oil palm

Oil palm unprocessed

Large swathes of industry rely on palm oil, but with palm plantations now accused of causing massive environmental harm, manufacturers are seeking greener alternatives.

In a busy shopping mall in Colombo, Sri Lanka, there's a'smell that reminds me of England. I recognise it as the intensely fruity and slightly sickly aroma that emanates from all Lush cosmetics shops. The company's soaps, with wacky names like 'Foam a friend' and 'Honey I washed the kids', are now sold from Sri Lanka to Slovenia and the UK to Ukraine.

They smell strongly because they are not packaged, but dispatched to shops in large blocks and sold to customers by weight. This approach reflects the company's strong environmental policy, which encompasses minimising packaging, recycling containers, using biomass energy, and obtaining the ingredients used to make its products from local sources.

The company has enhanced its environmental credentials further by working with two UK-based soap manufacturers to create a soap base free of palm-oil. This ubiquitous vegetable oil, extracted primarily from the fruit of the palm Elaeis guineensis, is used in a huge number of everyday products including margarines, detergents, cosmetics and, increasingly, biodiesel.

Environmental cost

The plant's high yield means that palm oil is significantly cheaper than other vegetable oils to produce. However, the rapid rise in demand is having a serious impact in the tropical countries that grow oil palms. The replace'ment of primary rainforests with plantations across south east Asia is stripping biodiversity, destroying local communities, and exacerbating climate change by releasing carbon dioxide previously locked up in ancient trees and peatlands.

The scale of demand for palm oil is immense and increasing. Between 1962 and 1982, world exports of palm oil rose from about half a million to 2.4 million tonnes per annum. In 2008, global production of palm oil and palm kernel oil stood at 48 million tonnes. Demand is predicted to more than double by 2030 and to triple by 2050.

Today, Indonesia and Malaysia account for 90 per cent of global production. Indonesia has six million hectares of oil palm plantations, but has plans for another four million by 2015'dedicated to biofuel production.

An increase in production will destroy more rainforests, push animals such as the orangutan, Sumatran tiger, elephants and rhinos towards extinction, and'make refugees of indigenous people who live sustainable lives within forest ecosystems.

'Even at current levels, palm'oil is one of the most destructive things we can use,' says Andrew Butler, campaigns manager at Lush. 'It's destroying 'some of our most fragile and valuable ecosystems'and it's critical that we stop'that.'

Industry players have sought to address the issue through the Roundtable on Sustainable Palm Oil (RSPO). This was set up in 2003 as a cooperation between Aarhus United UK Ltd, Golden Hope Plantations Berhad, Migros, Malaysian Palm Oil Association, Sainsbury's and Unilever, along with WWF. It works with oil palm growers, palm oil processors or traders, consumer goods manufacturers, retailers, banks and investors, environmental or nature conservation NGOs, and social or developmental NGOs, with the stated aim of 'promoting the growth and use of sustainable palm oil products through credible global standards and engagement of stakeholders'. Its members include high-street names such as Tesco, Nestle' and Cadbury, as well as palm oil traders such as Cargill and ADM. Together, these companies represent 40 per cent of global palm oil trade. Palm oil companies wishing to certify their production as sustainable must pay independent RSPO-approved certification bodies to audit their production.

Tough to verify

While this may seem like a positive step towards making the industry more sustainable, verifying the environmental credentials of palm oil is not straightforward. Major companies buy from processors and traders rather than individual plantations, and oil from different sources all gets mixed together.

A Greenpeace report released in late 2007 found that some RSPO members were actively involved in deforestation and the conversion of peatlands, thereby undermining the RSPO's environmental credentials. One RSPO member, a major food retailer, complained at the time to Greenpeace that, 'the global palm oil industry is unable at present to provide anyone with evidence of traceability beyond processor, to plantation level'.

It was around this time that staff at Lush were becoming aware of the negative impacts of'using palm oil. In 2006, Simon'Constantine, head of the company's buying team, had visited Indonesia and met with representatives of some of the projects that Lush had been supporting, including the Sumatran Orangutan Society.

Constantine visited the palm plantations and areas that were being deforested, and then went to the annual RSPO meeting in Singapore to see if SPO-certified palm oil might provide a solution. 'He reported back that his impression of the RSPO > < was that it was merely a talking shop,' says Butler.

The Lush team concluded that the only way to address issues of'environmental destruction related to palm oil was to reduce demand. They therefore decided to phase out palm oil and began investigating alternatives.

The company was using palm oil in glycerin and its soap base. Sourcing a palm-free glycerin was relatively easy but the soap base proved harder. Lush's supplier, John Drury & Co, decided not to produce a palm-free base so the team looked elsewhere. They found an alternative made by Kay's from sunflower, rapeseed and coconut oil. Eventually Drury changed its mind and supplied a base made from rapeseed and coconut oils.

Greenwashing

In Lush's low-rise UK factory on an industrial estate in Poole, Dorset, soap department manager Joe Craven explains the soap-manufacturing process. In one part of the airy warehouse stands a pallet of brown sacks marked 'palm-free'. They contain two different types of soap base, one comprised of small creamy pellets, the other of flakes. These lend either a clear or marbled appearance to the soaps. They are also responsible for giving the creamy lather that Lush customers value.

The soap base is added to a large vessel, along with water, MPG (mono-propylene glycol, which holds moisture into the soap), the 'essential component' or fragrance, plus other ingredients that include fresh fruits, chocolate, flowers, nuts, herbs and even alcohol. Today, the golden mixture that will form 'Sexy Peel' soap is broiling away, its constituent lemon and lime peel emitting a sharp citrus tang.

Lush launched its first palm-free soap, 'Greenwash', in Christmas 2007. After a successful marketing campaign that urged consumers to 'wash their hands of palm' the company set about switching its entire soap range. It wasn't plain sailing, however: although the palm-free base seemed to work well in small batches, when the amounts were scaled up, problems arose.

'At one point we were experimenting with four different bases with different percentages of oils,' Craven recalls. 'We had problems such as soaps separating and unwanted particles appearing. A week before Christmas 2008 we finally sorted it out, then that last week we were running 24-hours a day to try and fulfill all the orders.'

According to WWF, palm oil is used in 50 per cent of all packaged supermarket products, so a widespread switch to palm-free alternatives is not going to come easily. Every year Unilever uses 800,000t, Nestl' 320,000t, Proctor and Gamble 300,000t, Cooperative Group 45,000t and Cadbury 40,000t.

In 2009, WWF released the Palm Oil Buyers Scorecard, the results of an assessment of the progress of 59 European companies on sustainable palm oil sourcing over a six-month period. It concluded that while several companies in Europe were on the right track when it came to changing their palm oil buying habits, many were failing to capitalise on the availability of RSPO Certified Sustainable Palm Oil. The top ten companies were Sainsbury's, Marks and Spencer, Migros, Young's/Findus, Unilever, Cadbury, The Body Shop, L'Oreal, Asda and Coop Switzerland. Companies languishing towards the bottom of the scorecard included Associated British Foods and Aldi (Nord, S'd and UK).

Greenpeace has targeted several major companies in an attempt to change their palm oil buying habits. For example, it dispatched activists dressed as orangutans to Unilever's headquarters in London to scale buildings and occupy production lines. Unilever subsequently committed to using palm oil only from sustainable sources by 2015.

In 2010, Greenpeace published a report that slated Nestl' for using palm oil from the Sinar Mas Group, Indonesia's largest producer of palm oil. The group owns 406,000 hectares of established palm oil plantations and claims to have a further 1.3 million hectares of land available for expansion. One funder, the French Bank BNP Paribas, described the Sinar Mas group as involved in 'the most aggressive new planting programme among the plantation companies'. Greenpeace claimed the vast majority of this expansion would involve deforestation, some on protected peatlands and in critical orangutan habitats.

Greenpeace made its opinions of Nestl' known through a spoof online advert showing an office worker eating what appears to be a piece of KitKat but which turns out to be an orangutan's finger.

Unilever and Kraft had previously both cancelled contracts with Sinar Mas, while Sainsbury's and Shell had also stated they would not buy palm oil from the company. Nestl' subsequently announced it would henceforth exclude companies running 'high-risk plantations or farms linked to deforestation' from its supply chain. It recruited Switzerland-based charity the Forest Trust to provide an independent review of its palm-oil supply chains.

According to WWF, by mid-2009, RSPO-certified plantations were able to supply 1.75 million tonnes of sustainable palm oil annually, more than one-third of the EU's annual uptake. However, by October 2009, only 195,000t of the premium-priced certified oil had been traded. Critics continue to maintain that the RSPO certification is not stringent enough.

After the 2009 meeting, Friends of the Earth issued a statement saying: 'Friends of the Earth International does not regard the RSPO as a credible certification process as it is only a limited tool of technicality which is not able to adequately address the horrendous impacts of oil palm cultivation on forests, land and communities.'

Some companies are trying to seek palm oil supplies that do not have a detrimental impact. The Body Shop initially announced that all of the palm oil used in its soaps would be sourced from the Daabon Group, a Colombia-based organic producer. When Christian Aid drew its attention to the fact that Daabon had thrown 123 people off their land and burned crops and forests to make way for a new oil palm plantation, the Body Shop dropped the supplier.

Unilever has taken a step towards freeing itself from palm oil by investing in Solarzyme Inc., a US-based company that harvests algal oil. This liquid has the potential to replace palm oil in foods and soaps, as well as providing a biofuel capable of powering aircraft. In an article in the Wall Street Journal, Unilever said it expected to start using algal oil commercially between 2013 and 2017.

Lush's 700 stores now sell only palm-free soap. Although Lush is a tiny player in the cosmetics industry, which in itself only accounts for around 7 per cent of the palm oil market, it is keen to encourage others to follow its example. It hopes other companies will join forces in a cooperative named Actively Seeking Alternatives to Palm oil (ASAP).

In 2009, Lush used 586t of soap base globally; taking this as a constant quantity it now saves 390t of palm oil a year compared to when it was using a palm-oil base. This equates to a potential saving of 230 acres of primary rainforest. 'Our use of palm oil barely registers on a global scale,' admits Butler, 'but we are trying to source all our ingredients as ethically as we can as a matter of principle and we hope to use our experience to show other companies and other NGOs that going palm-free is a credible alternative to the RSPO route, which has increasingly failed.' *

See our photo essay on palm-oil production.

Further information

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Labelling: Hard to spot

Consumers wishing to boycott food products containing palm oil face a difficult task as it is often lumped together with other oils in ingredient lists as ‘vegetable oil’. However, in June 2010 the European Parliament took the first step towards the approval of a new directive on the ‘Provision of food information to consumers’, also known as the Sommer Report.

The Parliament also approved a proposed amendment to the text that would require palm oil in products to be clearly labelled. Once agreement is reached between Parliament and Council, companies will have three years in which to comply with the new regulations. In soaps and cosmetics, palm oil often appears as Sodium Palmate or Sodium Palm Kernelate.

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