Palm oil industry reaching new level of transparency

Palm oil industry reaching new level of transparency

March 6, 2018

We call on companies to keep the eye on the prize; that is a thriving palm industry where respect for labour rights, rights of communities, and the environment is the norm.

Nestlé have published a list of their top direct palm oil suppliers and the mills supplying each of them, showing strong progress in supply chain transparency and with it the opportunity to transform an industry long associated with deforestation and exploitation. Others have been making similar disclosures, and surely many will follow.

We started working with Nestlé in 2010, firstly supporting them to create their Responsible Sourcing Guidelines. At the time many in the industry said tracing their supply chain was impossible given the complex and opaque nature of the industry. It’s true, the industry is very complex. Palm oil fruits are bought and sold by farmers and agents before they reach the mill, where it is crushed and processed before traders transport it to refineries to be processed further and then sold.

Nestlé and other TFT members have been able to trace their supply with our support and we are using the information to transform the industry for the better. We are aware some of the mills in the Nestlé list are connected to unethical and environmentally destructive practices. Our approach to these instances involves engaging these suppliers, understanding why they are associated with such practices and finding a shared value approach to improve and contribute to a sustainable industry that protects forests and treats people respectfully.

Given the opportunity, encouragement and right support we believe many palm oil companies can improve, and we have already seen evidence of this. Although there is still much work to do, obtaining and publically sharing this level of traceability shows the great progress to date that the palm oil industry has made in transparency. However, businesses should be judged on how they can support their suppliers to create change.  What is most important is the actual implementation of No Deforestation, No Exploitation, No Peat (NDPE) commitments in the field.

Leadership will come from creating positive impact for communities and the environment, and transparent communication about this work. We call on companies to keep the eye on the prize; that is a thriving palm industry where respect for labour rights, rights of communities, and the environment is the norm. Here’s to the next big palm industry announcement answering: where are you on your journey of eradicating deforestation from your supply chain, where are you on the journey of improving labour practices and respect towards communities, where are you on the journey of improving resilience of smallholders in your supply chain?

Nestlé’s mill list