Palm oil and palm-derived products are everywhere. Why? Because it’s the world’s cheapest vegetable oil. The reach of palm oil, though, extends far beyond products and uses: It has consequences for the humans and lands that produce this oil. This is why sustainable production is capable of transforming industries and lives all over the globe.
In its most apparent application, palm oil and its derivatives are found in food. Around 50% of products in supermarkets and grocery stores contain this substance. The most common food uses are cooking and frying oil, shortenings, margarine, and as a fat for confectionary.
Palm-derived products also appear in processed foods like salad dressings, chocolate, ice cream, and packaged bread, making it a nearly unavoidable staple in kitchens all over the world.
The use of palm oil in food products accounts for 71% of palm oil consumption, which translates to more than 40 tonnes annually. It’s used so much that in 2012 about half of the world’s population (3 billion people) consumed the oil.
Personal care products including cosmetics account for 24% of palm oil use. Cosmetics and beauty products are multi-billion dollar industries, churning out products ranging from lotion and shampoo, to shaving cream and fragrances, and laundry detergents.
Palm-derived products even end up in lipstick, because it remains solid at high temperatures and offers the balm a more appealing taste. It’s present in soap and shampoo because it removes dirt and oil. And it doesn’t just remove the oil from skin; it helps the skin replenish its natural oils.
Palm oil and its derivitives are sometimes used in cosmetics because of their purported health benefits. Health conscious consumers advocate the use of palm oil beecause it contains large amounts of vitamin A and E, which contribute towards skin health.
Palm oil is not only used in the numerous food items we use to fuel our bodies, but it can be used in alternative fuel options like biodiesel when heating homes, generating electricity, and fuelling automobiles.
In terms of worldwide consumption, energy uses currently account for only 5% of palm oil use. But this number may increase as the world seeks alternatives to fossil fuels and the biodiesel market grows.
Although producing palm oil for use as biodiesel does not comes without certain costs or trade-offs, however, it is currently the least expensive oil regarding production and refinement and consumes relatively little energy in its transformation from fruit to biodiesel. Generally, a large quantity of oil can be produced on small plots of land.
Palm oil production is an industry that is dominated by large enterprises, yet a substantial portion of worldwide production (40%) is carried out by smallholder famers. As large companies are increasingly moving towards sustainability certification to meet consumer demand, smallholders run the risk of being excluded from the certification process.
Smallholders often suffer from lower yield due to a lack of knowledge on good farming practices and this translates to lower incomes. Lower incomes means less money to live off. Small scale production also means implementation of sustainability standards requires more human capital.
The growing demand for certification from consumers for sustainably produced palm oil places smallholders in a tough position: If they want to continue selling their product, then they will have to become certified. Additionally, most smallholders are unaware of sustainability initiatives, which when combined with low incomes, limited access to financial resources and inputs, low bargaining power and market access means smallholder famers will remain in a marginalised position.
Even when smallholders can fund certification efforts that would provide them with more sustainable incomes through greater market access, they often lack access to the necessary technical support and inputs for compliance standards. This is a pity because palm oil presents a great opportunity for income and economic development. It can produce more oil using less land than any other oil crop and does not require large resources by way of inputs.
Palm oil is the world’s most used and fastest growing vegetable oil, but unfortunately the crop’s high growth rate also means that unsustainable environmental practices can occur on the plantation and farm level that threaten the productivity of lands, health and safety of workers, and food security of surrounding communities.
In order to meet rising demand, large corporate plantations rely on land conversion. This means that valuable forests are cut down and the underlying growth, like peat and timber, are burned to create clearings for plantations. This endangers the ecosystems local inhabitants rely on for their livelihoods. Deforestation and subsequent biodiversity loss means that animals lose their natural habitats and may become endangered.
Large plantations can also pollute the surrounding ecosystems with run-off, sending the chemicals used in the cultivation process streaming into lakes and rivers. In Honduras, plantation pollution poses a major threat to the coral reefs in the Caribbean. The drive for profits has endangered the ecosystems upon which these profits are made.
But it doesn’t have to be this way. If palm oil production was sustainably organised where the same amount of land produced more palm oil, there would be no more danger to forests, coral reefs, lakes, rivers, and people.
Solidaridad is launching the Asian Sustainable Palm Oil (ASPO), a multi-stakeholder platform to support and promote sustainable palm oil production and consumption in the main Asian markets of India, China and Indonesia.
Independent smallholders in Ghana participated in Solidaridad’s Better Management Plots programme and increased their yields from 3 tons/ha to 20 tons/ha.
Sustainable West African Palm oil Programme (SWAPP) launched with the help of a 12 million EUR grant from the Dutch Embassy in Ghana. Solidaridad and RSPO supported the scaling up of sustainable palm oil production in Colombia and Honduras in collaboration with 13 local plantation companies, industry associations and leading processors of palm oil.
Solaridad developed its first palm oil supply chain programmes, linking major brands and companies, such as Johnson & Johnson and CONO, with palm-oil smallholders working on RSPO compliance.
Thanks to a 30 million EUR grant from the Dutch government, Solidaridad launched its cross-commodity Farmer Support Programme together with five different roundtables, including the RSPO, which will support 400,000 smallholders by the end of 2015.
The Dutch Task Force for Sustainable Palm Oil set a target of using only RSPO certified palm oil in Dutch food, cosmetics, and animal feed industries by 2015.
Solidaridad began its Palm Oil Producer Support Initiative (POPSI) to stimulate better management practices among small palm oil farmers and assist them with RSPO certification.
The first palm oil plantation was RSPO certified
Roundtable on Sustainable Palm Oil was (RSPO) founded.
Farmers & Growers
The heart of sustainability consists of a range of practices by different actors that work to produce commodities and bring them to market. For palm oil we seek to unite growing demand with a sustainable supply base by working with farmers on innovative approaches to sustainability.
With the famers we work with in Latin America, Asia, and Africa, we help provide training on good agricultural practices in order to increase farmers’ yields and reduce the funds spent on fertilisers and chemicals.
Since financial management is often a problem for smallholders, in Indonesia we partnered with the second largest credit union to train its smallholder members in financial literacy as well as how to produce palm oil sustainably. This approach helps smallholders improve incomes and reduce the environmental impact of their farming.
Innovative approaches to bring smallholders the knowledge they need to grow sustainable palm oil are indispensable to our approach. In Jambi province, the 5th largest palm oil producing province in Indonesia, we began a support and training centre to aid independent smallholder famers in sustainable palm oil production. Here famers are not only instructed in good agricultural practices, but in organisation and institutional capacity building with civil society and government towards RSPO compliance and, where possible, certification.
"I know about the management standards for palm oil plantations especially in relation to crop maintenance and fertiliser application and I can reduce fertiliser costs. Now, I am saving more money from my plantation!"
Silvanus Seyron Palm Oil Smallholder World Education Australia Farmer Field School
Working with palm oil traders, corporations, and retailers is critical in fostering sustainability within the palm oil industry because they can set the tone for practices throughout the supply chain. Companies are key to ensuring sustainability in the palm oil supply chain because they are in an excellent position in terms of market development.
This is why we work directly with companies, assisting them in sustainable sourcing and project investment. As smallholders are often excluded from the certification processes that will be a step towards sustainability, we work with Unilever to integrate smallholders in their West African palm oil supply chain through RSPO certification. To this end, in cooperation with other civil society partners, we have brought together 5 mills in Guatemala, producing 30% of the country’s palm oil, to improve labour conditions on palm oil estates.
RSPO certification is a useful tool for bringing about more sustainable production practices, and we use it as a starting point for continued commitment to sustainability. We unite groups of producers to commit to sustainability goals for the benefits of their business and the communities that are in any way affected by their businesses.
In Honduras, Solidaridad supports a group of 8 cooperative and corporate palm oil producers called PASH, which account for 80% of palm oil production in Honduras and has also committed to RSPO certification. This industry-wide cooperation platform is critical for ensuring that sustainable palm oil stays relevant at the country level and that local companies invest in the places where they operate.
In Asia we run several projects with partners like Cargill, Nestle, Asian Agri, and Keresa. In West Africa, we have begun the Sustainable West Africa Palm oil Programme (SWAPP), which supports sustainability through creating networks for information exchange, best management practices, providing access to finance, RSPO certification, and looking after environmental and social practices.
This is the type of change we support: Cooperation between palm oil supply chain members, governments, civil society organizations in combination with certification is on its way to changing sustainability.
"RSPO has really brought our social performance to a higher level. Implementing RSPO inspired us to go out and talk to surrounding communities. We see this gives a very good result: Our relations improve a lot! This created better awareness of environmental aspects. It also improved our management: we reduced incident rates and yields went up."
Ms. Suyapa Sustainability Honduras Agrotor, Honduras
Mainstreaming sustainable palm oil production in Ecuador
Solidaridad begins programme for certification of the palm oil industry in Guatemala
Towards inclusive palm oil supply chains
Creating an independent smallholder hub in Jambi, Sumatra
Integrating Ghanaian palm oil smallholders into global markets
Transition of the palm oil sector in Colombia
Jan Maarten Dros
Programme Coordinator Palm Oil