UK Easter chocolates rated highest if "palm oil free"

Khor Reports: Sustainable palm oil has become inexorably linked with the rise of “palm oil free.” This is confirmed in the latest “ethical rating” of palm oil usage in consumer products: UK's Easter chocolates in this instance (Easter is just around the corner). Get a high score by various degrees of effort or “RSPO-ness.” Else you could simply opt out of palm oil to get the top score (and never mind the attributes of the ingredient you substitute it with i.e. sustainability, transfat and so forth).

The methodology: “Products are ranked on a scoring system of 1-20....Companies that do not use palm oil or their derivatives score 20 (best score).  Companies that use it but make no substantial policy statements and are not members of the Roundtable on Sustainable Palm Oil score 0.” In addition, there are negative marks for any missing or inconsistent information provided. 

RSPO's Annual Communication on Progress (ACOP) was greatly strengthened last year but it has been hampered by significant non-responses and non-disclosures. This move in consumer product ratings highlights these issues and marks down companies for their lack of full disclosure.

65 products were rated and only 8 get the "green light": Divine Chocolate, Booja Booja, Traidcraft, Co-op Chocolate, Sainsbury's Chocolate, Waitrose, Biona and Plamil.

 In a poll by Retail Active in Easter of 2010, UK children were estimated to indulge in more than 2.5 kg of chocolate over the Easter holiday on average, consuming nearly 13,000 calories and 650 grams of fat (reported here: http://www.telegraph.co.uk/topics/easter/7544878/Easter-2010-Children-gorge-on-2.5kg-of-chocolate.html).  In the USA, Easter was the second most important candy-eating occasion of the year for Americans, who consumed 7 billion pounds of candy in 2011, according to the National Confectioner's Association. In 2012, Americans spent nearly USD2.1 billion on Easter candy (rising to #1 position by sales?), while Halloween sales were over USD2 billion; Christmas, more than USD1.4 billion; and Valentine's Day, over USD1 billion (reported here: http://www.infoplease.com/spot/eastercandy1.html).

Chocolate makers buy specialty fats from palm oil providers in the form of CBE and CBS. To be rated high by ethicalconsumer.org a chocolate manufacturer using palm needs to do the following: be a RSPO member; for all group companies buy segregated sources for all CPO, PKO and palm derivatives used; disclose all relevant data to RSPO, disclose all suppliers and label palm oil in ingredients. The do-nots: provide incomplete or inconsistent information. The alternative, just don't use palm oil to get top marks i.e. go "palm oil free". Back to cocoa butter?  

News: UK Easter chocolates rated on sustainable palm oil. "Consumers are unaware of palm oil content, the campaign says, because of current labelling laws. Palm oil is a key ingredient in many food products – including chocolate and biscuits – but companies are not required by EU law to label products containing it until December 2014. The aim of the campaign is to encourage consumers to buy the best-rated products, forcing those companies that are not taking their environmental responsibilities seriously to use more sustainably sourced palm oil. Divine and Booja-Booja were deemed to have the best overall credentials, with neither using any palm oil in their chocolate products. Traidcraft, Co-operative Food and Sainsbury's also scored very highly. The bottom three chocolate companies were deemed to be Lindt, Thorntons and Guylian. Lindt reportedly supplied inaccurate figures to Ethical Consumer, while Thorntons and Guylian failed to submit any documentation to the organisations that set international sustainable palm oil standards...." http://www.guardian.co.uk/environment/2013/mar/25/easter-eggs-palm-oil

The results of the rating is here: http://www.rainforestfoundationuk.org/palm-oil-database  

Scoring methodology details from www.ethicalconsumer.org:

Companies are scored out of 100 possible points, with 100 being the best score. 
Companies that do not use palm oil or its derivatives score 100. Please note the final score on the tables are given out of 20 by dividing the total by 5.
Companies that use it but make no substantial policy statements and are not members of the RSPO score zero.

50 marks are available for companies' actual palm oil use.  Scores are applied for the companies' use of crude palm oil (CPO), palm kernel oil (PKO) and palm oil derivatives. Of these, 40 marks are awarded to companies that source 100% of their palm oil through RSPO-approved mechanisms for the trade in sustainable palm oil.
Up to ten additional marks are awarded for the proportion of RSPO-certified palm oil that is segregated.
The above certified mechanisms must apply to the companies' CPO, PKO and palm oil derivatives used.  If it only applies to one of these, the mark out of 50 is divided by three.

10 marks are available for each of the following:

• Companies that make a public commitment to reduce their use of palm oil.
• Companies whose RSPO ACOP or CSR information in relation to palm oil applies to the whole company group.
• Companies that disclose their suppliers.
• Other positive initiatives, such as labelling palm oil where it is used.
• Companies that disclose the actual volumes used of CPO, PKO and palm oil derivatives.
• Ten marks are deducted if the information provided by the company to the RSPO is internally inconsistent, or inconsistent with its CSR information provided elsewhere.
• Five marks are deducted if the information it has provided is incomplete.

 

Sarawak controversies

Global Witness, a corruption busting NGO focusing on resource-based industries, recently released a video sting on Sarawak land deals. The video features cousins of the long-time Sarawak Chief Minister Taib and two lawyers. They are shown explaining to the purported foreign investor how he might acquire oil palm plantation land and circumvent Malaysian regulations on foreign-ownership limits and evade real property gains tax by using nominees and effecting so-called secret payments via a Singapore entity.

source: http://www.youtube.com/user/GlobalWitness, accessed 11pm on 22 March 2013

Khor Reports comment:

Stories about timber and oil palm links to corruption are not new. Various NGOs have been featuring similar issues in Sarawak. These include the Bruno Manser Fund and the Sarawak Report (run by Clare Rewcastle Brown, a sister-in-law of UK ex-Prime Minister Gordon Brown). Global Witness is a prominent NGO and its film about Sarawak land dealings is attention-grabbing. Sarawak issues may gain more global attention, building on other NGO exposes. Global Witness notes on its website: "Our campaigning led to the creation of the precedent-setting Kimberley Process Certification Scheme and to our joint nomination for the Nobel Peace Prize. Three years later we contributed to research and campaigning around the 2006 Hollywood blockbuster, Blood Diamond."

Indeed, the Global Witness report, "Corruption in Malaysia laid bare as investigation catches Sarawak’s ruling elite on camera," (weblink: http://www.globalwitness.org/insideshadowstate/), has garnered over 900,000 views on youtube in just three days (in English and Malay languages).

Sarawak is Malaysia’s remaining frontier for oil palm expansion, and various controversies have arisen in recent years. These include:

a)    The IOI–Pelita landmark case: At end March 2010, the Miri High Court declared four natives the winner in a class action suit against the Sarawak government, Land Custody and Development Authority and IOI Pelita Plantation Sdn Bhd. Reports on the RSPO website indicates that IOI subsequently lost control of the estate.
b)    Hundreds of pending land dispute cases: A listing of land disputes for 1995 to 2010 is available on various Sarawak linked websites, including here: http://www.illegal-logging.info/uploads/ListofSarawaklanddisputesJOANGOHUTAN.pdf 
c)    Sime Darby case: A former CEO of the largest plantation company in the world, stands accused of CBT over a Sarawak oil palm land deal apparently gone sour.
d)    Recent expansion: Some academic satellite imagery studies show significant oil palm development in Sarawak in recent years (including on peat land). This supports recent comments by Dorab Mistry, a key speaker on palm oil market and prices, that there has been significant expansion in the Sarawak palm oil sector.

Documentary on soy in Argentina

An interesting documentary on soy in Argentina. The film makers highlight problem of GM soy, using large amounts of pesticide. Argentine doctors interviewed worry that this has resulted in birth defects and childhood cancer in local populations living near soy fields. Soy growers say they are using pesticides the government has approved. Violent encounters over land also a concern.View here: http://www.aljazeera.com/programmes/peopleandpower/2013/03/201331313434142322.html

45% area usable for Kalimantan plantations?

Khor Reports: HCS implies net area of 45% for Kalimantan plantations?

This morning, GAR and SMART made an announcement on its implementation of its pilot on High Carbon Stock (HCS) forest conservation. Here is Khor Reports’ quick review of GAR/SMART’s HCS issues and implications for the palm oil industry.

For the pilot, “HCS is defined as comprising BT, HK1, HK2 and HK3 areas”. Thus, all types of forest (high, medium and low density) as well as old scrub lands cannot be developed. Only “young scrub” and “cleared / open land” can be utilized. Thus, despite industry rumours of a higher ceiling that would be less of a constraint for oil palm development, it appears that the NGO-preferred 35tC/ha ceiling still applies. GAR/SMART’s preliminary study in June 2012, which was done together with certification facilitator The Forest Trust and Greenpeace, found the weighted average carbon stock in four Kalimantan concessions in degraded lands in tC/ha: 17 in cleared / open land, 27 in young scrub, 60 in old scrub, 107 in low density forest, 166 in medium density forest, and 192 in high density forest.

The indicative numbers for GAR/SMART’s pilot in eight concessions areas:

a)      In unplanted areas, 19,103 ha to be set aside for HCS (highlighted with yellow marker on slide #18). Add on 25,567 ha unplantable for reasons of HCV, peat and government regulations (slide #17). Total of 35% set-aside area of total concession.

b)      Add on (minimum) 20% area for smallholder / plasma schemes. The net area for the plantation / nucleus could be 45%?*

* And this is in partially developed concession areas; area usable in “new” concession areas could be lower assuming some HCS inadvertently cleared in the past.

source: "GAR and SMART implement pilot on High Carbon Stock forest conservation"  

With this ground-truthing of satellite image mapping for Kalimantan degraded areas, NGOs may be more confident to make advanced (and even historical) studies to inform plantation companies on estimated HCS set asides they should have (or might have had) in place. As we have mentioned before, we think this is a pre-cursor to a push for rural land use planning which has been generally lacking in Southeast Asia. NGOs appear well advanced in using satellite imagery for studying oil palm developments. Other issues arising would be connectivity of HCS areas and the need for 100 meter connectivity buffer corridors (see slide #31 below).

 

source: "GAR and SMART implement pilot on High Carbon Stock forest conservation" 

The HCS ceiling is fundamental to arresting deforestation. It seems a low key issue, but it will be a thorny question for plantations on the usability of their land banks. Elsewhere, Norway (population 4.9 million) has also been highlighting concerns about palm oil’s impact on deforestation, perhaps in less impactful but highly symbolic ways; weblink:http://khorreports-palmoil.blogspot.com/2013/03/norway-goes-cold-on-palm-oil.html

Also refer to Khor Reports on details of preliminary HCS report findings in GAR/SMART-TFT-Greenpeace report: Khor Reports Palm Oil Strategic Analysis #7, 11 June 2012, "Carbon Stocks Study Presages Problems for Plantations." Ask for a copy if you don't have it yet.
 

Info source: Golden Agri-Resources Ltd: "GAR and SMART implement pilot on High Carbon Stock forest conservation," 13 March 2013.

Norway goes cold on palm oil

Khor Reports: Norway says "no way", with (i) a key pension fund selling down all plantation equities except for Sime Darby at end-2012 and (ii) a successful NGO campaign slashing palm oil consumed by two-thirds on fears of deforestation.

There has been a symbolic sell-down of plantation company equity holdings by the Norwegian Government Pension Fund Global (GPFG). Pressured by activists, the hydrocarbon exporting nation decided to become “more green” by selling off all holdings, while raising its stake in Sime Darby (the largest plantation company) by end 2012. This move relates to the “Fund’s policy on risk related to climate change and tropical deforestation.”(1) Experts question its methodology of selection and analysts worry about whether other fund managers in developing countries might be pressured to do the same.

Other news from Norway is of a highly successful campaign by Rainforest Foundation Norway to cut by two-thirds its 2011 level of consumption of palm oil from 3 kg to 1 kg per capita (Norwegian food producers used 15,000 tons of palm oil in 2011). “Producers were asked to disclose details about their use of palm oil, and whether the palm oil was sourced from sustainable sources. Norwegian law obliges companies to provide such information, if it is considered relevant for environmental concerns. The results of the investigation were published in a “palm oil guide”, a unique web-based tool where consumers can check the occurrence of palm oil in Norwegian food products. Previously, this information was unavailable, and the use of palm oil concealed as “vegetable oil” or “vegetable fat”.” (2) The palm oil guide is worth a look as it gives details on palm oil content in different products (850 food products by October 2012) (3). Apparently, all food producers except for General Mills made disclosure or were compelled to. As it is not a Norwegian company, the US food producer could not be made to do so. The pressure group reports that in trying to educate the Norwegian public on deforestation issues, they often found journalists and others distracted by concerns on saturated fats.      

News sources:

(1)    http://www.regnskog.no/languages/english/worlds-largest-sovereign-wealth-fund-divests-from-palm-oil-companies

(2)    http://www.regnskog.no/languages/english/norway-palm-oil-consumption-reduced-by-two-thirds

(3)    http://ezpalmeolj.server125.wdc.webdeal.no/vis/printlist

The Sabah-Sulu crisis and palm oil supply chain risks

KHOR REPORTS: THE SABAH-SULU CRISIS & PALM OIL. You can view our annotated map of the crisis that started in February and erupted in violence in early March 2013, resulting in risk concerns for the palm oil supply chain in Sabah (the biggest producer of palm oil in Malaysia).

View here: http://tinyurl.com/bj2bvp4  and download here: http://tinyurl.com/a82npu5

Instead of emailing a downloaded report, please share with your friends and colleagues by asking them to go this link: http://khorreports-palmoil.blogspot.com/2013/03/the-sabah-sulu-crisis-and-palm-oil.html (we would appreciate getting some info on hit stats)

I have also prepared an info briefing with working title “Sabah Palm Oil Supply-Chain Concerns, a socio-political analysis of the Sabah-Sulu Crisis” Please contact me if you are interested to get a copy when it’s ready.

 

Khor Reports' Palm Oil newsletter #1: sustainability, food labels, bio-diesel, CPO price expectations

We are very happy to announce the launch of the Khor Reports' Palm Oil newsletter. It will be published once every two months.  

You may view Issue #1 online here: http://tinyurl.com/aaodq4g 

If you wish to download a copy, please proceed to this link: http://tinyurl.com/bcjax6d

As this is a subscription-free ad sponsor-supported publication, please ask to be included in our mailing list, or please access our newsletter via this blog link (so that we can collect some view / download statistics). To share with your friends and colleagues please ask them to go this link: http://khorreports-palmoil.blogspot.com/2013/03/khor-reports-palm-oil-newsletter-1.html  

You can find out more about Khor Reports and download other reports by visiting us at: https://sites.google.com/site/khorreports2011/home  

KHOR REPORTS' PALM OIL, March / April 2013, ISSUE 1, contents:

• Indonesia minimum wage hikes of up to 49%. 
• Malaysia finally regularises duty structure vs. Indonesia. 
• China food safety and more. 
• Biofuels – US aims to get its cars out of oil “for good.” 
• Food sector labelling. 
• China popular product claims. 
• EU-RED ILUC may block all but waste for biodiesel. 
• HCV grassland criteria soon? 
• FEATURE: Sustainable palm oil – heating up. “Palm oil free” and super tax get short shrift in France. 
• Key vegetable oils. 
• Weather outlook. 
• CPO technical view. 
• Price charts. 
• Our CPO Price Expectations Survey