Supply Chain

Cargill, Doughnut Companies Promise Sustainable Palm Oil, But NGOs Say Devil Is in the Details

This week, three more major food companies announced new policies around the sourcing of palm oil.

By Jennifer Elks | Published 10 years ago | About a 6 minute read

This week, three more major food companies announced new policies around the sourcing of palm oil.

On Monday, Cargill — maker of everything from meat to chocolate to salad dressings, and the largest importer of palm oil in the US — announced it is becoming a member of The Forest Trust (TFT), the international NGO that partners with companies to build responsible supply chains. The agribusiness giant says that, with the help of TFT, it has mapped the full supply chain of its Malaysian palm oil refineries down to the individual mill, and can now offer its customers 1 million tons of traceable palm oil from its own refineries. The company says it is continuing its efforts to map third-party suppliers in Indonesia and Malaysia.

But according to the Rainforest Action Network (RAN), this week’s announcement doesn’t include any updates to the company’s latest commitment, released in July. And after years of campaigning by RAN and other groups, the policy still lacks key elements needed to achieve truly responsible palm oil, including:

Clear deadlines for achieving a fully traceable global supply chain by 2015 and independently verified compliance by 2016.
Details on the auditing, verification and due diligence procedures that will be used to identify cases of non-compliance and on the actions Cargill will take to eliminate problematic suppliers from its supply chain.
Details on the establishment of an independent conflict resolution and grievance mechanism that will enable the resolution of conflicts in its supply chain to the satisfaction of workers and local communities.

Gemma Tillack, RAN’s senior forest campaigner, says Cargill must also adopt best practices for transparent auditing, monitoring and reporting on progress.

"Cargill has taken an important first step forward by pledging to build traceable and transparent palm oil supply chains that break the link between the palm oil it produces and trades; and deforestation, carbon pollution and violations of the rights of indigenous peoples, local communities and workers,” Tillack said in an email. "Now the real work begins. Cargill needs to identify and eliminate suppliers that continue to drive these impacts, especially in Indonesia and Malaysia*.* It's partnership with The Forest Trust can help Cargill engage its suppliers and provide its customers with information about the origin of the palm oil that ends up in so many products.

"It is crucial now for Cargill to publicly release a time-bound implementation plan that includes details on the actions it will take to halt deforestation and the development of carbon-rich peatlands; to identify and resolve conflicts with local communities; to prevent the violation of indigenous peoples’ land rights; and to uphold the rights of all workers while eliminating the use of forced and child labor in its supply chain."

As one of the world’s largest and most powerful private corporations, RAN says Cargill has a crucial role to play in building traceable and responsible palm oil sourcing from growers to markets.

Meanwhile on Tuesday, Dunkin’ Brands Group, Inc., parent company of Dunkin’ Donuts and Baskin-Robbins, announced a new commitment to source only 100 percent sustainable palm oil in the US by 2016. Dunkin’ says it will work to source palm oil that is 100 percent fully traceable to the mill by the end of 2015, and to the plantation by the end of 2016 for use in Dunkin’ Donuts US restaurants, and will develop and publish a phased implementation plan, including mapping its international supply chain, by March 1, 2015.

In March, the Union of Concerned Scientists (UCS) scored palm oil commitments from 30 top companies and Dunkin’ Brands received a failing grade, largely because the company did not address palm oil procurement across its global supply chain. Now the NGO says this new commitment is a start, but only applying this commitment to Dunkin’s US operations would cover only half of its stores.

Calen May Tobin, the scorecard’s author and lead analyst with UCS’s Tropical Forest & Climate Initiative, said: “Dunkin’ is clearly feeling the heat from American consumers, but their response is not quite what their consumers are demanding. It’s a good sign that Dunkin’ is willing to improve sourcing for its US locations; it should adopt the same requirements globally. The company says it plans to do so in 2016, but in the meantime, tropical forests are still getting fried. Dunkin’ is taking this issue seriously and more fast food companies should follow in its footsteps. At the end of the day, though, this is literally a half-measure.”

Not to be outdone, Krispy Kreme chimed in with an update to its palm oil policy to the FAQ section of its website this week:

“Krispy Kreme’s responsible palm oil sourcing efforts began in January 2014 with a commitment to only source products for its US locations from suppliers who are certified members of the Roundtable on Sustainable Palm Oil (RSPO), and those who can guarantee compliance with all sustainable palm oil production methods as defined in the RSPO guidelines. Additionally, Krispy Kreme has purchased enough GreenPalm certificates to cover 100 percent of its estimated usage of palm oil in the United States through the end of 2014.”

Krispy Kreme also says it is expanding its commitment to achieve 100 percent responsible and traceable sourcing of palm oil and “will work with its suppliers to meet these commitments as rapidly as possible, with a deadline for full compliance by the end of 2016.” The donut chain also says it will provide a detailed implementation plan with progress reports on its sustainability initiatives, though it does not say when.

Though both doughnut companies’ policies may have their holes (pun intended), May-Tobin acknowledged them as an important starting point:

“These announcements demonstrate the power that consumers can have to move companies," he said in a blog post. "In our scorecard, the packaged food sector scored the highest in part because those companies have been subject to years of public campaigning.”

The two doughnut companies are among at least a dozen consumer brands that have recently adopted such commitments, including General Mills, Hershey, Kellogg and Pepsi. Three major palm oil trading companies — Wilmar, Cargill and GAR — have also committed to sourcing palm oil from deforestation-free sources, ensuring that more than half of the palm oil on the market is covered by the deforestation free commitments.

Palm oil cultivation destroys tropical forests, creating heat-trapping emissions and destroying habitats of endangered species — hence the urgency around the issue and the reason consumers and public interest groups are pressuring companies to source it more responsibly.

As May-Tobin also points out in his blog, other fast food brands, including Burger King, McDonald’s and Yum! (which owns Taco Bell, KFC and Pizza Hut) have yet to commit to responsible sourcing of palm oil. Burger King, which recently merged with Tim Horton’s (known for its doughnuts), has not offered any follow-through to its 2010 promise to review policies regarding rainforests. Similarly, McDonald’s has pledged to evaluate ways to preserve forests, but has made no firm commitments. Finally, Yum! has pledged to phase out palm oil where feasible, but has not committed to deforestation-free sourcing in any capacity.