Iceland Bans Palm Oil from its Own Brand Products

By palm-oil|June 14, 2018|Blog|0 comments

The British supermarket chain Iceland has reacted to the continuous environmental scandals in the global palm oil industry announcing this April to remove palm oil from its own products by the end of 2018. Iceland’s managing director Richard Walker stated in the interview that RSPO-certified (multi-stakeholder initiative Roundtable on Sustainable Palm Oil) ‘sustainable’ palm oil does not exist due to continued deforestation of some of RSPO members and the persisting growth focus of the initiative. The RSPO was founded as a response to increasing criticisms against palm oil production relating to issues including deforestation, biodiversity loss, CO2 emissions (due to peatland conversions), land grabbing, food security vs. bio-fuel debate, and labor (conditions, migrant labor, child labor). However, the RSPO remains itself a point of contention due to continuous scandals. For instance, the RSPO-founding member IOI Corporation Bhd (see Greenpeace Report) was temporarily suspended from the RSPO due to continued deforestation and clearing of carbon-rich peatlands. IOI Corporation Bhd is part of an international value chain, supplying large retailers such as Unilever, Kellogg’s and Mars.

By dropping all palm oil (including sustainable palm oil) from its own brand products, Iceland has created a media furore, putting larger retailers under pressure to implement similar policies. The move is largely symbolic, since Iceland is a relatively small player, and its decision to ban palm oil from its products will not significantly affect global palm oil production. For comparison, Iceland buys around 500 tons of palm oil per year whereas the UK currently buys 400,000 tons of palm oil per year. Companies like Sainsburys and Tesco buy 13,056 tons and 24,405 tons respectively.

Iceland’s management decided that the only way to curb palm oil-related deforestation is by cutting it out of its own brand value chain. Does Iceland’s policy make sense? I don’t think so. By banning palm oil from products, or avoiding the consumption of products containing palm oil, all attention is drawn to the fetishized commodity of palm oil (i.e. an obsession with the commodity itself, including the solutions), ignoring the structural, political, and social issues that lead to the controversies in the first place (such as industrial monocultures, corporate power etc) (see Pye 2018). It is not palm oil that is killing the orangutans, but the deforestation that is making way for new oil palm plantations. In other words, banning palm oil is a sham solution, because the unequal and exploitative structures underlying its production would transfer to other industrially produced crops such as soybean oil (think of deforestation in the Amazon), and it is hardly imaginable that this improves overall global sustainability.

What is then the alternative for a retailer such as Iceland?

The answer is not easy and straightforward. I would like to stress two necessary steps here, that is value chain transparency and consumer awareness. First, one of the most pressing issues in the global palm oil industry is value chain transparency. The majority of large branded retailers purchasing palm oil such as PepsiCo, Kellogg’s, and Ferrero do not disclose from which mills and producers they source their palm oil (latest Greenpeace report). Only in February this year did Unilever and Nestle reveal their entire supply chain, after repeated pressure by NGOs such as Greenpeace. To be fair, mapping out the palm oil value chain is in itself an arduous task since after the refining process palm oil can enter a variety of sectors, i.e. foods, feed, fuel, and industrial products (e.g. soaps, detergents). A large producer selling a variety of products has to grapple with numerous supply chains and thousands of traders, millers, and producers. Only value chain transparency can ensure that the sourced palm oil is actually ‘sustainable’ (at least according to the corporate definition of it). However, then we still need to discuss whether the corporate definition of ‘sustainable’ actually implies long-term sustainability (which I doubt is actually the case).

Second, it is necessary to increase consumer awareness about the controversies around palm oil and other agricultural crops, also for retailers such as Iceland. This does not just relate to the endangerment of the orangutan and deforestation, but also to lesser-known issues such as land grabbing, labor exploitation, migration, and gender. Again, it is important to stress that these issues are not inherent to the palm oil industry but are prevalent in all industrial agricultural systems (similar issues are present in the industrial production of bananas, cotton, wood products etc.). Increasing consumer awareness about the contents of the products that are being consumed and its value chains, is an important step toward holding large retailers, branded manufacturers, and other value chain participants accountable for environmental and social malpractices.

As a consumer, if you want to consume more sustainably, it might be a good idea to refrain from buying processed products altogether. This is relatively simple when relinquishing products such as chocolate and cookies (relatively, I said). You could replace these with other delightful comfort foods such as fruits, dried fruits and nuts etc. However, they come with their own controversies, to complicate things some more: For instance, Fairtrade does not equal fair trade. I suppose the best way then is to grow your own fruits!

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