Palming it off? What palm oil restrictions mean for foodservice

The stand off between Malaysia and the EU over palm oil is a new dimension of a conversation about social responsibility in the industry

Palm oil is doing nothing for diplomacy. The Malaysian government has called for recent upgraded relations with the European Union (EU) to be deferred, while a mutual trade dispute over palm oil rages on. The EU is moving to ban the use of the oil in biofuels, and since Malaysia and Indonesia together produce around 85% of the world’s palm oil, the Southeast Asian nations foresee a pretty tight pinch on their agricultural sector.

Boycotts: bold statement or box ticking?

The main point of tension here is over palm oil in fuel, but it’s also a key ingredient across a huge range of food products. British supermarket chain Iceland kicked off a conversation about palm oil by banning it from its own-label products in April 2018. It stirred its own pot at Christmas with a Greenpeace-run advert showcasing the environmental impact of deforestation by the palm oil industry, and turned Iceland into a dissident hero overnight, after the ad was banned by a regulatory watchdog.

Marketing benefits aside, have Iceland’s moves against palm oil in their products (a move that has not been entirely successful from a PR persepctive) made a pioneering statement? It does raise questions over the kind of social responsibility that supermarkets can wield, but it’s not a new movement. The UK committed to sourcing 100% credibly certified sustainable palm oil (CSPO) as early as 2012 – and every major UK supermarket has a CSPO policy for their own-label products.

Boycotts along Iceland’s line may have a basis in environmental issues, but there is also the unfortunate possibility that alternative but less productive oil crops (like sunflower or rapeseed) might use up to ten times more land than palm oil. Rather than an outright ban, perhaps a commitment to CSPO is a more likely way forward.

It may be that the most viable way for foodservice providers to engage with the issue over palm oil is to maintain a relationship with their supply chains, and oversee full control over the sustainability of the product they use. That method has its dissenters, too: Greenpeace considers it near impossible in practical terms to know whether or not a supply of palm oil was grown on deforested land.

Not in my Nutella

Ferrero Corporations, the company that owns the Nutella brand, once faced a boycott on its palm oil-based spread. The former French Minister for Ecology, Segolene Royal, called the boycott but ultimately it was met with challenges. Greenpeace reiterated their view that a blanket ban would not stop production line issues; and Ferrero was defended all round as being one of the more sustainability-focused suppliers.

Their progressive credentials come largely from being part of the RSPO (the Roundtable on Sustainable Palm Oil), and from maintaining full transparency throughout their supply chain. There are downsides to the consensus-based model of a roundtable organisation, however, as this 2013 article outlines. The pace of change can be slow and the bar can be set deliberately low to achieve results: prompting some questions over the efficacy of such large-scale corporate measures.

Call to action?

The foodservice industry, from manufacturers to retailers, have faced backlash over their ingredients and social responsibility before. From the sugar tax to allegations of unethical practice in the meat industry, it’s not unfamiliar territory. However, when dealing at the same time with regulatory bans and potential disruption to supply chains, foodservice providers have every reason to keep track of the palm oil in their business. The question is how best to do so, and how far the foodservice industry itself needs to take on the responsibility for that task.

Frances Ball


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