REWE GRoup GuIDELINE FoR palm oil AND palm KERNEL oil products

Transcription

1 REWE Group GUIDELINE FOR PALM OIL AND PALM KERNEL OIL PRODUCTS

2 CONTENT I Objective and area of application 3 II General conditions 4 III Developments to date 5 IV Claim and requirements 7 V Implementation and monitoring 9 Terminology 10 References 11 2

3 I OBJECTIVE AND AREA OF APPLICATION A number of store brand products are produced for REWE Group using a varying quantity of palm (kernel) oil. 1 As a retail company, REWE Group considers itself to be responsible for future generations and advocates the sustainable cultivation of oil palms. For this reason, REWE Group is committed to sensitising its employees, suppliers and customers about the issue of sustainable oil palm cultivation and to include appropriate products in its range. This should increase the proportion of more sustainably cultivated palm (kernel) oil in REWE Group s store brand products. The objective is for all palm (kernel) oil products used for manufacturing store brand products to originate from a more sustainable and responsible production structure. The area of application of these guidelines comprises all conventional store brand products of REWE Group with recipes containing palm (kernel) oil. These guidelines do not apply to organic store brand products. 1) A description of different palm kernel oil products is graphically displayed in the attached depiction 1. 3

4 II GENERAL CONDITIONS Nearly 80 per cent of palm oil and palm kernel oil used around the world come from the leading export countries of Indonesia and Malaysia. 2 Some 50 million tonnes of palm oil and 6 million tonnes of palm kernel oil were produced in total in This represents a surface of 12 million hectares of palm oil in the world. 4 However, the cultivation of oil palms often entails ecological and social problems such as the irretrievable destruction of rain forests, which are a vital habitat for countless endangered plants and animals. The cultivation area in Indonesia alone is expected to expand to 20 million hectares by On top of that, a large amount of the greenhouse gas carbon dioxide was released through fire clearance and the cultivation on peat soils. The indigenous population living in rain forest areas is being continuously robbed of its traditional land rights and displaced so that all the more oil palms can be cultivated to meet growing demands. In order to counter these problems, various key players from the entire supply chain of palm (kernel) oil created the Roundtable on Sustainable Palm Oil (RSPO) together with social and ecological non-governmental organisations in The RSPO s principles and criteria for a more sustainable oil palm economy came into force in November The first palm (kernel) oil certified according to RSPO was available on the market at the end of Further certification systems for more sustainable palm (kernel) oil have since been established, such as ISCC (International Sustainability and Carbon Certification) and Rainforest Alliance. About 15 per cent of the global crude palm oil production is currently certified according to the RSPO system: this represents about 8.2 million tonnes of palm oil and about 2 million tonnes of palm kernel oil. 6 Despite these positive developments, criticism is still forthcoming from consumers and NGOs, even after the principles and criteria of the RSPO have been revised in this year s review process. The use of hazardous pesticides and chemicals is still permitted, for example. Even oil palm cultivation on peat soils and the associated release of large amounts of carbon dioxide is still allowed and requirements for a binding reduction of greenhouse gases are missing. Furthermore, landgrab, the expulsion of indigenous populations and the destruction of primary rain forests are also on the cards because the requirements of the RSPO are too weak and no sufficient sanctions have been established. In contrast, producers in the leading cultivation countries in South-East Asia criticise the fact that, so far, only around 50 per cent of the cultivated and certified palm (kernel) oil is sold. But it is widely recognised that there has been an increase in certified palm (kernel) oil transported separately to Europe. However, not all derivatives and fractions of palm (kernel) oil are available in certified quality. 2) WWF, 2012, page 9 3) FAS / USDA, 2013, page 6 4) WWF, 2012, page 8 5) WWF, 2012, page 8 6) RSPO, 4

5 III DEVELOPMENTS TO DATE This second version of REWE Group Guidelines for palm oil and palm kernel oil products replaces the first version from February REWE Group is revising these guidelines because the former targets have already been achieved and there is a need for new objectives. Based on the first version, the purchasing department of REWE Group, together with the concerned store brand suppliers, implemented comprehensive measures to make the relevant ranges more sustainable. The following results were noted by August 2013: For store brand products destined for the German market, REWE Group replaced palm (kernel) oil products as far as technically and sensorially possible with other vegetable fats and oils such as sunflower and rapeseed oil. As a result, the total demand for palm (kernel) oil was reduced by about 15,000 tonnes to just over 10,000 tonnes a year, whereby over 7,000 tonnes is used for the food sector and just 3,000 for the non-food sector. 5

6 In the food sector, 90 per cent of the aforementioned quantity was already converted to certified, more sustainable palm (kernel) oil products through mass balance and segregation compared with just 30 per cent in the non-food sector. The lower proportion in the non-food sector is explained by the wider use of palm kernel oil, which is difficult to trace because of the different processing and refining steps. Together, both the mass balance and segregation models for the food and non-food sectors represent 70 per cent. For the remaining 30 per cent of the necessary palm (kernel) oil products, REWE Group purchases the equivalent share of certificates according to the certificate trading model in REWE Group makes sure that it acquires preferential certificates from selected, more sustainable palm oil producers to guarantee targeted support. 6

7 IV CLAIM AND REQUIREMENTS In the first version of the guidelines from February 2011, REWE Group had already established the clear target of upgrading all store brand products in the medium term through the exclusive use of segregated, RSPO-certified palm (kernel) oil products. In order to achieve this requirement, short-term sub-objectives need to be defined. This means initially converting 75 per cent of the palm (kernel) oil required for REWE Group store brand products to RSPO-certified products, whereby the first priority will be the segregation model and the second priority will be the mass balance. This share will be increased to 80 per cent by the end of The respective difference quantities should always be covered through certificate trading by purchasing from exemplary palm oil producers. Further sub-objectives need to be defined for the coming years based on the current market situation in order to reach the 100 per cent segregation target in the medium term. In 2013, REWE Group founded the Forum for Sustainable Palm Oil (FONAP) together with other partners. The forum is partly aimed at reducing the complexity of the separate raw material procurement and processing of local and certified palm (kernel) oil. This target can only be achieved if the members of the forum who are also relevant key players in the supply chain of palm (kernel) oil agree to use only segregated, certified palm (kernel) oil in the future. This strategy helps to reach a so-called sectoral tipping point. The tipping point refers to when there is more segregated, certified palm (kernel) oil on the market than conventional oil. From this point onwards, it is more cost-effective for all economic operators if, on a sectoral level, exclusively certified palm (kernel) oil is traded and processed and the different flow of goods separating conven- 7

8 tional and certified palm (kernel) oil no longer exists. For this reason, REWE Group advises its store brand suppliers to use 100 per cent segregated, certified palm oil as a member of the Forum for Sustainable Palm Oil (FONAP). But as previously explained, the current RSPO principles and criteria do not yet satisfy relevant stakeholders. This refers particularly to the following points: Blocking the cultivation on peat soils and other surfaces with a high concentration of carbon Exclusion of hazardous pesticides (which have been classified by the World Health Organisation in the hazard classes 1A or 1B or listed as such in the Stockholm and Rotterdam Conventions) as well as Paraquat Application of strict regulations to reduce greenhouse gas emissions on the oil palm plantations and mills Direct disclosure of greenhouse gas emissions which emerge from the cultivation, transport and processing of palm (kernel) oil Guaranteeing that the certified palm oil mills source non-certified raw materials (Fresh Fruits Bunches) exclusively from established and legal cultivations A united and strong voice is required in order to integrate these pending issues into the principles and criteria of the RSPO in the future. REWE Group is convinced that its voice will only be heard if it and other companies exclusively use segregated, certified palm (kernel) oil products and represent their interests in light of their RSPO membership and also through the FONAP. Until the principles and criteria of the RSPO have been further developed and improved, the store brand suppliers of REWE Group are requested to respect the previous measures when buying palm (kernel) oil products but particularly to actively ensure that the oil palm plantations and mills respect the aforementioned points and to choose partners along the supply chain who already best fulfil the aforementioned additional requirements. 8

9 V IMPLEMENTATION AND MONITORING We can deduce from the content of these guidelines that the purchasing of certified palm (kernel) oil for the store brand products of REWE Group must in the future occur either according to the segregation model or mass balance model with clear focus on segregation. This presupposes that the store brand suppliers of REWE Group join the RSPO and are subject to the independent supply chain certification according to the RSPO regulations. Evidence of their RSPO membership and supply chain certification must be provided to REWE Group. The use of certified palm (kernel) oil products is stipulated in the product-related specifications as agreed between the store brand suppliers and REWE Group. Furthermore, the suppliers report once a year on the developments of the conversion to certified palm (kernel) oil. The requirements defined in the product specifications relating to the use of more sustainable, certified palm (kernel) oil are monitored by supplier audits. 9

10 TERMINOLOGY Mass Balance With mass balance, certified palm (kernel) oil is physically available, but may be mixed with conventional palm (kernel) oil in a controlled manner throughout the supply chain. It must be ensured that the movements of goods are defined for a specified area of application in terms of space and time. Palm oil- and palm kernel oil derivates Palm oil derivates and palm kernel oil derivates are olechemical products that are mainly used in the cosmetics and detergent industry. Palm oil- and palm kernel oil fractions Solid or liquid parts (fractions) of refined palm oil and palm kernel oil are separated by means of cooling, crystallisation and filtration. The solid fractions are referred to as stearines and the liquid fractions are oleates. Refined oil Crude oil on palm oil and palm kernel oil basis is processed to standardised oil by means of refining (neutralisation, bleaching, deodorisation). Crude oil Palm oil is gained from the flesh of the fruit and palm kernel oil from the fruit s kernel. The crude oil is produced by predominantly mechanic processes in mills that are close to the plantations. Segregation Segregation means the physical separation between the supply chain of certified palm (kernel) oil and conventional palm (kernel) oil. The purchaser of certified palm (kernel) oil can be sure that the delivered palm (kernel) oil product originates from a sustainable cultivation and has not been mixed with conventional palm (kernel) oil throughout the entire value chain. Processed and refined products on palm oil and palm kernel oil basis Products on palm oil and palm kernel oil basis are produced through manifold moulding and refining processes, e.g. mixture, transesterification, hardening, to achieve the desired physical characteristics. Certificate trading (Book and Claim) With certificate trading, producers with certified oil palm plantations receive a marketable certificate for the relevant quantities which can then be sold to the further processing industry, whereby the certified palm (kernel) oil merges directly with conventional palm (kernel) oil. 10

11 REFERENCES Foreign Agricultural Service (FAS) / United States Department of Agriculture (USDA) (Ed.) (2013): Oilseeds: World Markets and Trade Accessed on 27 August 2013 RSPO Accessed on 26 August 2013 WWF Germany (Ed.) (2012): Palm oil: curse or blessing? (Summary) How a natural resource is threatening the climate and rain forests but still restores hope in a greener future. Accessed on 27 August

12 Printing Publisher: REWE Group I Corporate Communications I Cologne Phone: I Fax: Contact Person: Martin Brüning I presse@rewe-group.com Discussing the issue of sustainable palm (kernel) oil is important to us. For all suggestions and questions, please contact us at: nachhaltiges-palmoel@rewe-group.com Status August 2013