Cargill to supply Unilever’s sustainable palm oil

Posted by Nicole Eckersley on 3rd August 2010

Oil palm plantation on the slopes of Mt CameroonEdible oils giant Cargill has entered into a supply agreement to provide Unilever’s European operations with 10,000 tonnes of sustainable palm oil.

Cargill will provide the company with segregated oil, certified by the Round Table for Sustainable Palm Oil (RSPO), the production and supply chain of which is entirely separate from other non-sustainable products.

Cargill said its new offering will strengthen its ability to provide sustainable palm oil products to meet customers’ requirements and will complement its existing certified RSPO Mass Balance palm oil offering.

“Our agreement with Unilever is the result of both companies’ strong commitment to supporting responsible supply chains”, said Paul Naar, head of Cargill’s food business in Europe. “As the demand for certified sustainable palm oil continues to grow, we are combining our supply chain expertise and industry knowledge to provide customers with choices to meet their particular requirements. We are very pleased to partner with Unilever and see this as a big step forward in the drive towards palm oil sustainability.”

“Unilever is ahead of plan to achieving 100 percent sustainable palm oil by 2015 with over 35 percent already being RSPO certified this year”, said Marc Engel, Chief Procurement Officer at Unilever. “Today’s announcement marks another important milestone in our journey to 100 percent sustainable palm oil, as Cargill’s physically segregated certified oil will be delivered in our factories and used in our products. We are very pleased that Cargill, as one of our strategic partners, is sharing our vision on sustainable palm oil and enabling this for us.”

Cargill’s offering of fully segregated refined palm oil follows the RSPO certification of the company’s European and Malaysian oil refineries. PT. Hindoli in Sumatra, Indonesia received its RSPO certification in February 2009 and Cargill is currently working to certify its other palm plantation in Indonesia, Harapan Sawit Lestari.

Cargill said that it fully supports the RSPO process to promote the growth and use of sustainable palm oil throughout the supply chain. The company announced that it has set a goal of buying 60 per cent of its total crude palm oil from RSPO members by the end of 2010. Cargill also said they are encouraging their third-party suppliers to join RSPO and attain certification, with an eventual goal of a 100 per cent RSPO certified supply chain.

The palm oil industry has suffered a serious public relations blow in recent months, with campaigns by a wide variety of green groups criticising the destruction of rainforests and animal habitats by palm oil producers.

Campaign group Rainforest Action Network welcomed the move by Cargill, and expressed hope that the move would lead to further steps in creating a sustainable palm oil industry.

“We’re encouraged to see that Cargill and Unilever are teaming up to show the industry that certified sustainable palm can be achieved,” said Leila Salazar-Lopez, Rainforest Agribusiness Campaign Director. “Cargill is showing that it is capable of providing fully traceable palm oil from RSPO certified sources and Unilever is showing that customers will follow through on their commitments to purchase palm oil at a higher cost, if assured that it is certified sustainable by the RSPO. We remain concerned, however, that the RSPO’s standards are not yet strong enough to assure customers that this palm oil is entirely free from forest destruction or other environmental damage.”

“We encourage Cargill to clean up its entire supply chain, and to make certified segregated palm oil available to all of their customers, particularly those in the U.S. This is particularly important because today’s Unilever commitment accounts for only 10,000 metric tones, a tiny percentage of the total volumes of palm oil that Cargill trades every year.”