Food sector news (update 7): European Agency for Food Safety warns on contaminants in palm oil in its May report, insights into processed food reformulations and sustainability

We've been keeping an eye on the food and processed foods sector, and shall try to post up some on some interesting trends or shifts here. Note the billion dollar snacks! Some reckon Hot Pockets and its spin-offs are a $2 billion business. By comparison, Unilever's Magnum is over EUR 1 billion in annual sales.

Also check, Khor Reports' Food Watch http://khorreports-palmoil.blogspot.my/p/khor-reports-food-watch.html

31 Jan 2017: EU food safety body to look again at palm oil health risks

EU food safety body to look again at palm oil health risks, Jan 27, 2017 -- Barilla, Italy's largest producer of baked goods, eliminated palm oil after EFSA's opinion, but Nutella maker Ferrero mounted an advertising campaign to defend its use. EFSA scientists will take into account a report the World Health Organization (WHO) and the U.N. Food and Agriculture Organization (FAO) published in November....http://www.reuters.com/article/us-health-palmoil-eu-idUSKBN15B1YP

24 May 2016: European Agency for Food Safety warns on contaminants in palm oil in its May report, insights into processed food reformulations and sustainability

Editor's notes: 

  • The measure against palm oil shown in the EFSA report is much higher than any I've seen on the same issue from the industry. At a recent talk on food safety at MPOB several weeks ago, the differential was shown was much closer, about 3x (also having improved over time). There is a clear need to reconcile such a wide range of indicated measures on the 3MCPD issue. It would also be good to find out what the real story is on trace contaminants in processed oils and fats. Are there also other trace contaminants arising form the chemical (including hexane) processing of soybean and other oils? Palm oil is different in being physically (rather than chemically) processed, and it clearly needs to address the EFSA position.
  • Russia has removed the palm oil tax idea on concerns about raising prices.

For palm oil, the moment of truth has arrived written by Marta Strinati May 17, 2016... On May 3, the European Agency for Food Safety (EFSA) published a substantial report warning that the contaminants in palm oil are cancerous and genotoxic, meaning it causes damage to DNA that can be transmitted to children. For one of those toxins, 3-mpcd, the EFSA set a threshold of 0.38 micrograms per kilogram of body weight, a dosage which, today, has been largely exceeded by the population, especially by children, teens and even infants. According to EFSA’s opinion, the food industry made a last attempt to misinform, claiming that the processing contaminants have also been found in other refined vegetable oils. But the report is clear: Palm oil contains six to 10 times more.... Big Food has known for 12 years that the palm oil used in food carries with it toxic and cancerous contaminants. Documents from the authorities and multinational food producers clearly show that the risks connected to consumption of low-quality vegetable fat were known. Those parties discussed possible solutions, but never offered up a remedy....But the rainforests are far away, and saturated fats aren’t very scary. Knowing that a food eaten so much by children contains substances that cause cancer has set, again, the spotlight on the battle against palm oil.... http://ilmanifesto.global/for-palm-oil-the-moment-of-truth-has-arrived/

Big brands are pushing up on reformulations - Nestle reports for 2014 6,973 products with reduced sodium, sugars, trans-fat, total fat, calories or artificial colourings (up from 3,317 and 4,221 number of products changed in 2012 and 2013). Reducing sugar and fat in ready-to-drink products (product example: 54% total sugar reduction, 45% total fat reduction, 25% more protein), substitute partially hydrogenated oil with high oleic soybean oil (product example, 45% SFA reduced, 25,800 tonnes oil substituted and 9,900 tonnes trans fat removed), full fat ice cream case study (new mix recipe: -28% fat, increased protein content, no starch), instant noodle case study (15% sodium reduction whilst improving taste, 50% SFA reduction through pre-drying and oil blend optimization), micronutrients (example, biofortification of maize, cassava, what etc). 

Source: Nestle presentation, December 2015

18 April 2016: Food safety issues in veg oils, Russia mulls tax on sugar and palm oil?

Editor's note: In AmBank news update, "Putin said that Russia should consider labelling palm oil products. As an alternative, Russia may consider an excise duty on palm oil products." A reader who checked with Russia trade specialists said that is not true. At an annual televised call-in, a question on putting cigarette-style health warning on palm oil products, Mr Putin replied that it not clear that palm oil is quite as bad as tobacco.

Vladimir Putin: $2bn linked to Panama Papers was spent on expensive classical instruments - and what else we learnt from Russian President's phone-in by Roland Oliphant, moscow  14 APRIL 2016; .... Intermission II: Cows, sanctions and unhealthy palm oil: Another intermission, this time to a cattle farm. The farmers have two questions: first, what happened if Western sanctions against Russia are cancelled, and consequently Russia's retaliatory embargo on Western food. That measure has been a boon for Russian farmers, allowing them to squeeze into sectors, including cheese, that had been dominated by foreign imports..... The second question is a request to put cigarette-style health warnings on palm oil products. Mr Putin says he doubts sanctions will be cancelled soon, but that "other support" may be considered for farmers when they are. And it is not clear that palm oil is quite as bad as tobacco, he adds. http://www.telegraph.co.uk/news/2016/04/14/vladimir-putins-phone-in-with-russia/

Russian Government to Introduce Tax on Sugar and Palm Oil The Moscow Times Feb. 05 2016; ... The list of goods subject to the new tax include palm oil and sugary drinks. The list may also include electronic cigarettes, potato chips and other products with high levels of fat and sugar, two unidentified federal officials told Vedomosti. The idea was supported by Russian President Vladimir Putin, both officials said..... According to an unidentified representative of the Ministry of Economic Development, the issue is already being developed. “We have the instructions from the government on this subject and in the near future (within a few weeks) will present suggestions and calculations,” he was quoted by the newspaper as saying. The representative pointed out the new measure is aimed not only at bringing money into the federal budget but also at reducing the consumption of products with high levels of sugar and fat.... http://www.themoscowtimes.com/business/article/russian-government-to-introduce-tax-on-sugar-and-palm-oil/558796.html

At MPOB PAC Forum, 14 April 2016, a presentation by Prof Dr Aishah on food safety issues, and a useful slide on edible crud oil risk matrix - pesticids, PAH, mineral oil, dioxins and PCBs and heavy metal (lead):

22 June 2015: India  PepsiCo to cut down salt, sugar content in packaged foods and FSSAI setting up an expert committee to regulate salt, sugar and fat in foods

PepsiCo to cut down salt, sugar content in packaged foods By Ratna Bhushan, ET Bureau | 22 Jun, 2015; NEW DELHI: PepsiCo has stepped up work on reducing salt and sugar in the beverages and snacks it sells in India amid growing public concern over high levels of some ingredients in packaged
foods available in stores.  The US-headquartered food and beverage giant is likely to roll out the refined products ahead of schedule, executives aware of the development said. Last week, the Food Safety & Standards Authority of India (FSSAI) had said that it is setting up an expert committee to regulate salt, sugar and fat in foods ..

28 May 2015:  The rising distrust of Big Food (largest 25 companies saw their control slip from a combined 49.4% share in 2009 to 45.1% share in 2014) and the beef-leather consumption divergence

Big Food's Big Problem: Consumers Don't Trust Brands - Industry Giants Shift Strategy To Win Back Health-Focused Americans By E.J. Schultz.   Published on May 25, 2015;
This rather unappetizing statement was tucked into a request for proposals recently sent to ad agencies: "Most of our food supply comes from factory farms, is dependent on GMOs and chemicals, and is not sustainably grown or raised." The inflammatory language sounds like the typical musings of a fiery activist ready to take on Big Food. But it actually came from the Kashi brand owned by industry giant Kellogg Co. The brand is seeking ideas to "re-establish our identity in the natural foods movement." The RFP, which was recently obtained by Ad Age, is a small but telling example of how the food industry has been shaken from its core, forced to reinvent itself in the face of shifting consumer demands. Families once reliably heaped their plates with products such as Stove Top stuffing from Kraft Foods, Hamburger Helper from General Mills and Kellogg cereals, along with similar products from other processed food titans. But now those consumers are increasingly migrating to smaller, upstart brands that are often perceived as healthier and more authentic.....The rapidly shifting tastes have forced executives into taking some dramatic steps. They are racing to reformulate iconic products like Kraft's Mac and Cheese, while acquiring smaller brands in hopes of reinventing themselves to appeal to today's finicky consumers. But their search for growth comes amid intense pressure to cut costs as bottom-line focused private equity firms such as 3G Capital lurk.
Some $18 billion in sales have shifted from large to small companies from 2009 to 2014 across all consumer packaged good categories, according to report by Boston Consulting Group and IRI. Credit Suisse recently isolated the changes in market share among food and beverage companies and found that the largest 25 companies saw their control slip from a combined 49.4% share in 2009 to 45.1% share in 2014. Their "dominance of the core U.S. market seems to be slowly eroding," Credit Suisse stated in a report..... http://adage.com/article/cmo-strategy/big-food-falters-marketers-responding/298747/

Your Salad Lunches Are Killing American Leather - Diets and droughts have made cattle hide more expensive, creating a leather shoelace crisis May 27, 2015 by James Tarmy; “Two years ago the hides cost me $50, and that didn’t seem so bad. But now they’re $112,” Howlett sighs. “Twelve bucks starts to feel like a pretty raunchy deal.” As a middleman between cattle ranchers and shoe sellers, Howlett has limited ability to pass along her rising costs. Auburn’s sales have begun to decline, to $19 million in 2014 from $20 million the year before, and net profit has been cut in half.
Leather has always been a byproduct of the meat industry, and as Americans’ beef consumption grew over the 20th century, the leather industry grew with it. The past three decades, though, have seen a decline of about 28 percent in Americans’ appetite for beef, and the supply of hides has dwindled accordingly. At the same time, drought in the Midwest has pushed up feed prices. The result is that America has fewer and more expensive cows. Meanwhile, the world’s consumers still want leather goods.... http://www.bloomberg.com/news/features/2015-05-27/your-salad-lunches-are-killing-american-leather?cmpid=BBD052715

19 April 2015: Fight for $15 minimum wage and unionization may raise fast food prices; zero food price inflation may trigger supermarket price war and more according to Citi Research, Majority of Australia sold packaged foods found to be unhealthy, Coles fined A$2.5 m for 'fresh' bread claims

Burger King Founder Says Higher Wages Could Kill Off ‘Dollar Menus’ by Nolan Feeney @NolanFeeney   April 15, 2015  “I see a lot of $10 hamburgers arriving on the scene,” David Edgerton says. Burger King co-founder David Edgerton says fast food workers pushing for higher wages could spell the end of the “dollar menu,” and usher in an era of higher-quality, more expensive convenience restaurants. Edgerton, 87, spoke to TIME on Wednesday as fast-food workers around the world staged protests and strikes—some at Burger King locations—as a part of the “Fight for $15” campaign, which calls for a $15 per hour minimum wage and the right to unionize. “What’s going to happen, really, is you’re going to see less and less of the quick and dirty kind of places,” said Edgerton, who founded the fast food giant with James McLamore in 1954 and now serves on the board of Avantcare, a company that makes nutritional products to help treat addiction. “You’re not going to be able to run these places [paying workers] $15 an hour or whatever it will be.”... http://time.com/3823384/burger-king-founder-minimum-wage-mcdonalds-protests/?xid=newsletter-brief

Next blow for Woolies, Coles: zero food price inflation Apr 15 2015| BRISBANE TIMES| Stalled prices for goods such as wheat, sugar and dairy are likely to cost Australia's supermarket giants more than a price war, according to Citi Research.... http://www.afr.com/markets/commodities/agriculture/next-blow-for-woolies-coles-zero-food-price-inflation-20150414-1mkh5e

Majority of packaged foods found to be unhealthy Down Under 13 April 2015 http://mobile.foodnavigator-asia.com/Markets/Majority-of-packaged-foods-found-to-be-unhealthy-Down-Under/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=14-Apr-2015&c=g5U1F%2FHXoYolJTQnOm2tj2KnTMZZv3qc#.VTMgcJ2wqTN
Coles fined A$2.5 m for 'fresh' bread claims 10 April 2015 http://mobile.foodnavigator-asia.com/Policy/Coles-fresh-bread-claims-Fined-A-2.5m/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=14-Apr-2015&c=g5U1F%2FHXoYoCEJZoZiNQwvxcC%2Bf8IObS#.VTMgbZ2wqTN

14 March 2015: Ferrero plans first factory in China

Ferrero plans first factory in 'strategic' Chinese market 11-Mar-2015; Mars holds a 39% value share of the Chinese chocolate market, but lost some ground in 2014 to Ferrero and Hershey, both of which grew their share to 12%, according to Euromonitor International.... Local news reports claim the Xiaoshan factory will produce 30,000 metric tons of chocolate and candies annually... According to Euromonitor, Ferrero has doubled chocolate sales in China over the past five years ot reach $190m in retail value sales in 2013...the firm currently manufactures toys for its Kinder brand in China, but products are imported from outside the country. Ferrero operates 20 plants worldwide including ones in India, Russia and Australia...Euromonitor expects a further $1bn of sales in chocolate confectionary in the next five years, representing a compound annual growth rate of 7%... Euromonitor recently wrote: ".. seasonal products and a culture of gift giving are prevalent in the Chinese market, which makes it a particularly conducive market for both Lindt and Ferrero.... "

16 February 2015: Ferrero patriarch - "the richest candy man on the planet" - dies at age 89; Milka-Cola premium milk beverage

World’s Richest Candy Maker and Nutella Founder Died on Valentine’s Day by Maya Rhodan @m_rhodan   1:15 PM ET; Owner of Italian chocolate company Ferrero dies at age 89. Michele Ferrero was the patriarch of the Ferrero family, whose company spawned Ferrero Rocher chocolates
Ferrero’s father created what would later be widely known as Nutella during World War II when cocoa was in short supply. He used hazelnuts to stretch the little chocolate he had. Years later, Nutella is among one of the most beloved treats in Italy and across the world. Forbes described Michele as the “richest candy man on the planet.”.... http://time.com/3710479/michele-ferrero/

Got Coke? Soda maker starts selling 'premium milk' by Associated Press February 3, 2015, 4:02 PM
Coca-Cola is coming out with premium milk that has more protein and less sugar than regular milk. And it's betting people will pay twice as much for it..... The national rollout of Fairlife over the next several weeks marks Coke's entry into the milk case in the U.S. and is one way that the world's biggest beverage maker is diversifying its offerings as Americans continue turning away from soft drinks.... It also comes as people increasingly seek out some type of functional boost from their foods and drinks, whether it's more fiber, antioxidants or protein. That has left the door open for Coke to step into the milk category, where the differences between options remain relatively minimal and consumption has been declining for decades.... "It's basically the premiumization of milk," Sandy Douglas, president of Coca-Cola North America, said at an analyst conference in November. If developed properly, Douglas said, it is the type of product that "rains money.".... Fairlife, which Coca-Cola formed in partnership with dairy cooperative Select Milk Producers in 2012, says its milk goes through a filtration process that's akin to the way that skim milk is made. Filters are used to separate the various components in milk. Then more of the favorable components are added, while the less desirable ones are kept out. The result is a drink that Fairlife says is lactose free and has 50% more protein, 30% more calcium and 50% less sugar than regular milk.... The same process is used make Fairlife's Core Power, a drink marketed to athletes that has even more protein and calcium than Fairlife milk..... http://www.latimes.com/business/la-fi-coke-milk-20150203-story.html

11 February 2015: PepsiCo and Coca-Cola show North Am growth to offset ROW slowdown; news links on food sector giants - Coke, Pepsi, McD, Unilever, General Mills, Mondelez/Kraft, Nestle... headlines on USD impact, earnings drag on demand in recent months

 PepsiCo’s Fourth-Quarter Profit Tops Analysts’ Estimates 'By' Duane Stanford 8:11 PM AWST  February 11, 2015 (Bloomberg) -- PepsiCo Inc., whose stable of brands includes beverages and the Frito-Lay snack division, posted fourth-quarter profit that topped analysts’ estimates even as currency headwinds eroded sales.... PepsiCo generated organic sales growth of 5 percent last quarter, helped by gains at its snack and beverage businesses. While currency fluctuations turned that increase into a 1 percent drop, the results showed overlying strength at the company. It also pledged to return $8.5 billion to $9 billion to shareholders through dividends and share buybacks in 2015..... PepsiCo right now has a lot of momentum,” Chief Financial Officer Hugh Johnston said in an interview. The company has increased U.S. sales by $1 billion, lifted by new products such as Naked Juice Kale Blazer and Mountain Dew Kickstart, Johnston said..... New products now account for 9 percent of sales, compared with 7 percent earlier years ago, a sign the company’s innovation push is paying off.
Chief Executive Officer Indra Nooyi also has forged a truce with activist investor Nelson Peltz’s Trian Fund Management LP, who had insisted she split the company’s snack and beverage businesses.....  Coca-Cola also beat estimates with its fourth-quarter results on Tuesday, saying that North American growth was helping offset a slowdown in the rest of the world..... That’s the case with PepsiCo too, Johnston said..... Overall, currency will reduce earnings growth by 7 percent this year, PepsiCo said. The company expects organic sales growth in the mid-single digits.... http://www.bloomberg.com/news/articles/2015-02-11/pepsico-profit-tops-estimates-after-growth-offsets-currency-woes

Unilever Profit Rises Despite China Sales Slump - Consumer-Goods Group Reports 6.8% Rise in Full-Year Net Profit on a 2.7% Fall in Revenue, By  Peter Evans; LONDON—Unilever PLC said weakening demand in emerging markets, especially China, has showed no sign of firming up this year even as the consumer-goods group reported a rise in profit in 2014... “There are still huge amounts of uncertainty in the world,” Jean-Marc Huët, Unilever’s chief financial officer, said Tuesday. “We’re not going to be too bullish at this time.”... http://www.wsj.com/articles/unilever-profit-rises-despite-china-sales-slump-1421739275

Coke Says 2015 Will Be a ‘Challening Year’ - WSJ

55% - The decline in Coca-Cola’s fourth-quarter profit, which was pulled down by weakening foreign currencies and one-time charges. The company warned that overseas business conditions could worsen this year. .. http://tk.wsjemail.com/track?type=click&enid=ZWFzPTEmbXNpZD0xJmF1aWQ9Jm1haWxpbmdpZD01NjkyNDMxJm1lc3NhZ2VpZD04Njg5MDAmZGF0YWJhc2VpZD02ODIwMDAmc2VyaWFsPTE2OTY1MzQ1JmVtYWlsaWQ9eXVsZW5na0BnbWFpbC5jb20mdXNlcmlkPXl1bGVuZ2tAZ21haWwuY29tJnRhcmdldGlkPSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&1012011142&&&http://www.wsj.com/articles/coke-says-2015-will-be-a-transition-year-1423572751?mod=djem10point

Pepsi Traders Brace for Dollar Impact on Overseas Sales: Options  Earnings -  Feb 10, 2015; 
rating on the stock, said by telephone Feb. 5. “Pepsi in particular has large exposure to volatility in Russia.” PepsiCo Earnings Analysts forecast PepsiCo on Wednesday will say fourth-quarter net...

What McDonald's Problems Say About American Taste  industries -  Jan 30, 2015  
invented the concept of fast food. It promised meals that were inexpensive and convenient, that could be eaten on the go and even with one hand while driving. The food wasn't necessarily healthy...

Unilever Sees No 2015 Improvement; Sales Miss Estimates  Jan 20, 2015; Unilever, whose detergents and deodorants are used by 2 billion consumers daily, said full-year performance will be similar to last year after posting quarterly sales growth that trailed analysts’...

General Mills Falls as Slump Prompts Company to Cut Forecast; General Mills Inc., the maker of Cheerios, Bisquick and Yoplait, fell 3.6 percent after slow growth in emerging markets and a lingering slump at home forced the company to cut its forecast. Earnings...

Mondelez’s Cost Cuts Fuel Profit Gains Amid Sluggish Demand  - Earnings -  Nov 5, 2014  
pressure for cutbacks at the company. Mondelez named Peltz to its board in January after Peltz’s Trian Fund Management LP abandoned a proposal for Mondelez to merge with PepsiCo Inc. to spur growth... http://www.bloomberg.com/news/articles/2014-11-05/mondelez-tops-quarterly-earnings-estimates-increases-forecast

Nestle’s Shocking Miss Puts 5% Growth at Risk: Cox  Asia -  Oct 16, 2014; Jon Cox, head of Swiss equities at Kepler Cheuvreux, examines results from Nestle as nine-month sales failed to meet expectations and looks at the economic factors in Asia and Europe that may...

Nestle Revenue Misses Estimates Amid Price Pressure  Europe -  Oct 16, 2014  
Nestle reported nine-month sales that missed analysts’ estimates as deflationary pressure eroded revenue in Europe, providing a setback for the world’s biggest food company in reaching its full-year... http://www.bloomberg.com/news/videos/2014-10-16/nestle-revenue-misses-estimates-amid-price-pressure

Low Oil Is a Help to Consumers: MacDonald  Oil -  Jan 15, 2015  
Allianz Global Investors CIO Global Equities Lucy MacDonald discusses the consumer goods sector in Asia, India's surprise rate cut, and the strengthening U.S. dollar with Bloomberg's Stephen...

23 October 2014:  MCD regionalism, Hot Pockets  & food stamps

McDonald's Discovers Its Inner Locavore and Learns to Love Regionalism By Venessa Wong, October 22, 2014; "McDonald’s (MCD) is taking a new approach to its menu, and it’s all about you... “Customers want to personalize their meals with locally relevant ingredients,” McDonald’s Chief Executive Don Thompson said on Tuesday, after the fast-food giant again posted disappointing earnings. Starting in January, he said, McDonald’s will simplify the core menu to highlight popular items, cut back on items that don’t sell well, and begin to allow regional groups of franchisees to offer more localized versions of burgers, beverages, and chicken and breakfast items...." http://www.businessweek.com/articles/2014-10-22/mcdonalds-discovers-its-inner-locavore-as-sales-struggles-continue?campaign_id=DN102214

Every Food Trend Goes Against Slumping Hot Pockets, Even Government Spending By Venessa Wong, October 22, 2014; "Just about every major food trend is working against Hot Pockets, and Nestlé (NSN:VX) clearly knows it has a problem brand on its hands.... The company tried to revive its line of microwavable meat pouches last year with a foodie makeover, boasting of “premium cuts of meat” and “real cheese” in the new and improved version. But even these quasi-gourmet touches can’t mask the fact that Hot Pockets are processed food sold at a time when consumers are seeking freshness at the expense of frozen options. A beef recall earlier this year also hit Hot Pockets, putting the product at odds with increasing consumer focus on food safety.... Now executives at Nestlé are pointing to another factor in the long-running Hot Pocket cold streak. A temporary boost in federal food-stamp assistance that was introduced in 2009 was allowed to expire in late 2013. Recipients of the Supplemental Nutrition Assistance Program (SNAP) benefits are ”a big part of the consumption of this particular product,” said Chris Johnson, executive vice president of Nestlé Business Excellence, during a sales call last week.... “For our Hot Pockets brand, it was not surprising to understand the value our products offered to the SNAP consumer,” said Molly Fogarty, Nestlé vice president for government relations, wrote in an e-mail. A two-pack of Hot Pockets costs about $2.50, she said, and the 12-count package, for around $11, is even more economical.... Reductions in the food-stamp program haven’t just affected Hot Pockets. Such large grocers as Wal-Mart Stores (WMT), which gets roughly 4 percent of its revenue from food stamps, have also said the SNAP reductions have hurt their U.S. business...." http://www.businessweek.com/articles/2014-10-22/behind-the-hot-pockets-slump-nestl-battles-every-food-trend#r=lr-sr

Nestle: Inside the Hot Pocket Plant; http://www.youtube.com/watch?v=23Tn1kOlyR8

Factoids: Hot Pockets Nutrition, http://caloriecount.about.com/hot-pockets-nutrition-m1493 
Calories in Pepperoni Pizza, 290 calories with 99 calories from fat; http://en.wikipedia.org/wiki/Hot_Pockets cites this: Hot Pockets were invented by Paul Merage and David Merage in the 1970s. They founded the company Chef America Inc. and began producing Hot Pockets in 1983. In 2002 Chef America was sold to Nestlé, and (as of 2012) Hot Pocket products are "now a $4.5 billion category of frozen sandwiches and snacks."

RSPO RT13: Reader feedback on HCS+ HCSA and RSPO convergence and more. RSPO Next "commensurate effort" and floor price efforts are no-go? Link for presentation downloads. Members terminated / suspended. EU’s Product Environmental Footprint (PEF) initiative.

RSPO Roundtable annual meeting was held in KL over three days, 17-19 November 2015 (well, there was also a reception on 16th evening).

24 Nov 2015: Reader feedback on HCS+ HCSA and RSPO convergence and more

Editor: Thank you for various reader feedback on several topics. One segment immediately below and incorporated into text further down.

Reader feedback on issue of HCS+ and convergence with HCSA and RSPO: By the way, HCS+ is proposing the Palm Oil Welfare Index (POWI). Is this required when growers are asked to do comprehensive SEIA /SIA / FPIC before any new development? Or is it the same data to be re-packaged under POWI? Some highly regarded new planting developments use the “simplified template for PalmGHG”. If growers feel the results from the simplified palmGHG is the answer to new development, then we can just forget about HCSA and HCS+?
Please also refer to other Reader feedback below in the relevant sections below:
  • A subtle shift with NGO support to push buying / take-up of certificates....
  • Lots of talk of smallholders.
  • Floor price?

23 Nov 2015: RSPO Next "commensurate effort" and floor price efforts are no-go? Link for presentation downloads. Members terminated / suspended. EU’s Product Environmental Footprint (PEF) initiative.

Editor: Have heard from RSPO observers that RSPO Next "commensurate effort" and floor price efforts are delayed and may end up no-go. Also note that EU’s Product Environmental Footprint (PEF) initiative: Fratini Vergano report
You can look at RSPO RT13 presentations here: http://rt13.rspo.org/c/rt13-presentations/
Other highlights from RSPO website:

Day 2 & 3: Market uptake problem, RSPO Next calls for "commensurate effort" but can quasi-matching get through legal compliance? Quality of audits. Floor price. Smallholders focus. Jurisdiction approach. Sec-Gen wrap up. A tame GA13? (updated 20 Nov morning to add what's new and data at top)

Below are abridged notes on selected talks and panel sessions at RSPO RT13. They are not comprehensive!

Editor's notes on what specialists say is new at RSPO RT13, includes:
  • A subtle shift with NGO support to push buying / take-up of certificates already in production and for RSPO Next to have take-up commitments. The acceptance of the idea of "commensurate effort" is novel. And something that CGM and Retailer sector would find new in the 13 years plus of RSPO. [Reader feedback: The first RSPO certificates were only available from year 2008 onwards, United Plantations was the 1st company in the world to receive the cert].
  • Call for comprehensive smallholder plan more or less acknowledges that trickle-down from corporate sector centric policies has been dissatisfactory. Will this find jurisdiction approach as sufficient? Audience was lackluster when asked on jurisdiction approach helping smallholders.
  • RSPO alignment-convergence with other (higher) voluntary pledges mooted and some details suggested. But do other NGOs really want to converge? Market share tussles have been quite apparent. If policy innovation effort is any indicator (but data indicators this year not good, see below) the question is: Is RSPO gaining back its mojo? This is helped by buyers and producers readjusting and realigning after the big changes triggered by the trader-processors sub-sector to pull to non-certification traceability.

Editor's notes for the data minded:
  • In LMC reports (http://www.lmc.co.uk/Oilseeds_Oils_and_Oleochemicals; including presentation at MPOB PIPOC on cost of certification compliance driving the push toward non-certification traceability), this year's RSPO market share of global palm oil seen by some specialists as stuck at about 20pct. It has been increasing at 2pct-age points per year in recent years. So the slowdown this year raises many questions. Editor: This data point might explain the innovative moves on jurisdiction approaches to attract new membership volume, including for smallholders.
  • RSPO panelist notes the need for a lot of buying in the last 6 weeks of the year. There are many CGM and Retailer buyer pledges set for end 2015!
  • GreenPalm experts point out the drop in PKO certificates price and volumes. They reckon that the push up of PKO certificates to $80 plus has diminished demand volume. Worth checking this out.


Day 2. Opening ceremony for RSPO RT13.

Zainal Abidin rendered two hit songs. Hijau - Zainal Abidin  https://www.youtube.com/watch?v=BnoYNt-f2UE

Biswirajan Sen of Unilever, RSPO head. Talked of Haze Crisis pointing to need for sustainable palm oil not avoiding palm oil. Focus on jurisdiction approach to simplify admin (ed: and cost?) and include smallholders and government. RSPO Next voluntary add (ed: help get back mind and market share?). Coalition of capable and willing with inclusiveness

Bakke of Sime Darby. Sustainable Palm Oil Manifesto spent RM12 million on HCS and socio-economic development studies. To varying degrees, there are commitments to sustainable development. RSPO has reached 20pct of global production and Sime Darby has reached 99pct. But only half is sold as certified product. He calls on buyers not to wait, but to buy. Calls on working on the rest of agriculture (palm oil as a small land use footprint). Step away from propaganda, and work openly and honestly. Small farmer are important. Developing countries lack the funds to subsidise. Developed countries don't have much natural forest left. We need equitable development. Sime Darby initiatives: a) A new platform - Open Palm - traces high proportion of FFB, CPO, PKO to mill and estate and b) To assist small farmers, look and act beyond boundaries for fire safe zone up to 5km.
Oil palm versus primary forest. University of York study for RSPO. Reporting oil palm at half of biodiversity and quarter of carbon versus primary forest. Fragments need to be over 10,000 ha to recover.

Quality of audits. Answering strong questions on credibility of RSPO audits. A panelist suggestion to break link the between company that hires the auditor by allocating the auditor at random. No other concrete answer. Resolution for GA later on this issue. RSPO says it will fix the situation.
Link: Dodgy auditors undermine palm oil group’s ‘sustainability’ claims 16 November, 2015 https://eia-international.org/dodgy-auditors-undermine-palm-oil-groups-sustainability-claims

RSPO Next. Some worries about its take up rate and cannibalise demand for regular CSPO but RSPO reps strongly assure audience this will not happen! Look also at "free and fair labour" and "commensurate effort."  

Jurisdiction approach.
  • Sabah says it has to be competitive and needs to attract investors including for POIC project. Why would buyers focus on Sabah product. If palm oil market collapses, Sabah can still sell if it goes branded. Sabah confirms that its goal for 100pct CSPO is entirely RSPO.
  • Seruyan in Central Kalimantan. Its Bupati/Regent worries that deforestation has not benefited locals peoples. Sees palm and other commodity certification has the only way to help smallholders. Fears for loss of market access. Not sure yet which brand to adopt.
  • South Sumatra. It's Governor reports 200,000 smallholders for oil palm. It will work with assistance from IDH in a program that covers palm oil and other commodities.
  • RSPO explains that the jurisdictional approach is to reduce transaction cost for smallholders. Save on HCV assessment, HCS and SEIA by doing all this at landscape level as shared cost with government and NGOs. This will also remove need for HCV set-asides and allow land swaps. With such scale, individual smallholder transaction cost can fall. Question was asked to audience if the jurisdictional approach will help smallholders. Response perhaps less than half certain?
 Including smallholders.
  • Lots of talk of smallholders. A panel leader asked if there is a need for "RSPO Light" for smallholders as there has been a lot of talk of smallholders but few of them. [Reader feedback: Instead of making the requirements easier for smallholders, it was tightened further. They are certified under Group Certification. The first draft review was rejected by stakeholders (mainly grower) and the RSPO WG came up with the 2nd draft - still not yet approved. The requirement for smallholders is not much easier or simpler compared to what a large company has to do. There has not been much voice or bargaining from the smallholders all this while, in spite of having a seat. I am sure strong representation can do this more justice].
  • Editor: past promotion of smallholders has centered on talk of increased yield including startling big claims e.g. 50pct yield increase.
  • This time a RM150,000 study done by UPM on Keresa and Sapi mills taking into consideration tree age and other key factors. Editor: But questions remain on key issues: i) on cost of certification - not asked, ii) no clear presentation of before-after time periods for the changed outcomes, iii) with "to be certified" status included, perhaps not an unsurprising to see some focus on perceptions instead of hard data (more of the latter better?), and iv) clarification on who paid for what - did palm oil mills pay for smallholder groupings and extension services or was it MPOB?
  • From question from the floor on funding of reports, ISEAL panelist noted their efforts to encourage studies without directly paying for it. Panelist also raised question of RSPO transparently looking at possible negative outcomes of its programmes. Editor: Indeed, on the side-lines an NGO complained to me that one presenter was too concise about sources of funding: "That study was actually mostly paid for by xxxxx! Why wasn't that mentioned?" But I do think that if you do need a specific study, you may need to fund it - but that does means that the study has to be more rigorous than ever!
Floor price? Ceres asked about floor price on certificates set at smallholder costing. MPOA notes that asking smallholder to make a "leap of faith" to achieve only a 20-50c premium is a problem! There needs to be buy in from smallholders i.e. there need to be solid financial benefits. Committee is being set up to look at the floor price question. Editor: Some very senior agriculture specialists worry that a floor price would become the traded price and would end up distorting the economics of certification. [Reader feedback: For many years the RSPO ex-president (Jan Kees Vis of Unilever) has made it clear that there should be no discussion on premiums for CSPO etc. This is apparently against competition rules. I thought premiums are based on willing buyer,willing seller basis?]

RSPO Sec-Gen's wrap-up comments. Includes:
  • "Beli yang baik" consumer campaign in Indonesia.
  • Singapore's "Axe the Haze" consumer campaign. He notes that buying RSPO products is one part of the solution, but that alone cannot save the haze problem.
  • Markets. CFNA participation about China market and looking to sustainable guidelines for China investments overseas. UK collaboration via Infit (fact check needed). Editor: Attendees point out that China and UK say they will commit to RSPO and other credible programmes. Link: RSPO statement on UK progress report News, 18 November 2015 http://www.rspo.org/news-and-events/news/rspo-statement-on-uk-progress-report
  • EU has goal for 100pct sustainable. Latest national alliance (to drive uptake) is for Italy.
  • Remediation and HCV Compensation Procedure policy has been endorsed by the Executive Board. This was 4 years in the making. (Editor: Specialists note that NGOs were surprised by relatively low level of compensation funds generated by the RSPO companies. but this policy is regarded as being a limiting factor in new grower membership sign-ups).
  • Those not submitting ACOP reports will be taken to task. 15 members have been terminated and 20 suspended with due process. Action taken last year too.
  • RSPO members need to band together to mitigate the haze. RSPO will convene the best on this. Certified areas are safe haven from rampant fires. How to help outside concessions? Concession map disclosure is important (Editor: legal position is that information may be voluntarily released by the company in Indonesia and many countries but Malaysia map release legality not checked yet?). Look and act beyond boundaries. In 6 months, to come out with something concrete on this.
RSPO GA13. Includes financial report. RSPO update on its smallholder fund - noting slow disbursement trend. Proposal from Oxfam, something long needed - a comprehensive smallholder focus (voted for strongly at 186). Code of conduct resolutions to strengthen action on members not promoting palm oil. Committee set up to look at floor price. Editor: Broadly, no major contentious resolutions as some in audience says RSPO issues are in maturity (and specialists also say some contentious issues were taken off!).

Post GA ruminations. Editor: RSPO Next expected to generate some legal compliance worries resulting in time out for possible reconsideration of committed ratios / volumes matching approach.


Editor's notes for Day 1.

Editor's notes and items noted by industry: a) "Free and fair labour" concept which includes living wage and industry note on problems of casual labour, b) apparent dial-back on RSPO HCV Compensation which has been challenging RSPO membership growth - specialists note simplifications of the matrix into two columns (instead of three which previously differentiated members with certified units and members without) and provision for certificates even after a tough Compensation status (not entirely surprised given the halt in production capacity market share growth at 19-20% this year and uncertainty driven by HCV Compensation?), c) Convergence talked of for HCS methodologies of RSPO GHG Calculator, HCS+ of Sustainable Palm Oil Manifesto, and Greenpeace's HCS Approach (which does notes it is different in protecting young regrowth trees), d) Marketing efforts in China and India - RSPO promoters continue to ask for tariff differential to favour CSPO in India, e) Side-lines chatter about the relative silence on the Haze crisis, f) intriguing to see how mills market themselves for traceable-to-mill GreenPalm certificates, g) oleochemicals wondering about traceable oleo amidst frank views by L'Oreal that its buyers only really care about safety and animal testing issues, h) Lots of talk of including smallholders and government, both of which lacked clear focus for quite a while but now to receive more attention and i) the related shift to jurisdictional marketing (sub national units eg. South Sumatra with IDH and Sabah with RSPO?).
I am attending RSPO RT13. First talk attended on social and labour issues. Prevalence of casual plantation workers, lack of independent unions, need for living wage, problem of forced labour and female workers issues discussed.
HCS+ study sets 75tC/ha hard threshold within carbon neutral approach and seeks more benefits to smallholders and fairer model. Looking to converge with Greenpeace's HCS Approach.
Greenpeace HCS Approach for landuse planning. Reports Asian Agri and BASF to join. Not just palm oil but also for pulp and paper, rubber and soya. Geographic expansion to Africa and Lat Am.
At RSPO RT13 talk on FFB supply chain issues. Talk by WWF Indonesia.
Traceable Greenpalm certificates coming January 2016!

On attendance, organizers report 800 plus. Still strong despite switch from Bangkok venue plan. Expert observers reckon on 1/3 new faces including lots of apparent non Asia origin young executives and many NGOs new to palm oil scene.

Palm oil alternative or a new business model? Solazyme to supply Unilever 3 million gallons of algae oil for soaps and toileteries

19 October 2015: Palm oil alternative or a new business model? Solazyme to supply Unilever 3 million gallons of algae oil for soaps and toileteries

Editor's note: The peat smog haze is driving up palm oil's coverage in international media  and online. Is the solution a new business model? Better certification? Banks acceding to sustainability rules? Or algal oil? Is 3 million gallons = 13,600 tonnes?
Yes, palm oil is destructive — but scientists are creating compelling alternatives September 19, 2015 · 11:30 AM EDT  By Shannon Kellehe; ...Palm oil comes from the clusters of brilliant orange fruit of the tree Elaeis guineensis. It’s grown in plantations that span millions of acres across southeast Asia; companies often clear-cut forests that are home to endangered orangutans and Sumatran tigers to plant these trees. Between 1990 and 2010 an area of forest the size of 2 million football fields was cleared to make way for oil palms. Doug Boucher, director of the Union of Concerned Scientists’ tropical forest and climate initiative, says palm oil presents uniquely sinister problems because “substantial areas of southeast Asia have very carbon-rich soils, peat soils, with sometimes quite thick deposits of peat."..... These dangers of palm oil have caused companies to seek out substitutes. Scientists at the University of Bath in the UK are developing an oil from a common type of yeast that can grow on almost any feedstock. And the California company Solazyme has begun extracting an oil with similar properties from microalgae. Jill Kauffman Johnson, Solazyme’s Global Sustainability Director, says they prepare the oil in much the way other companies brew beer. “We feed sugar to the algae, and then put that all into a large fermentation tank,” Johnson says. “The algae then convert the sugar into oil, and it allows us to produce large amounts of oil in a matter of days.” Solazyme has a contract to supply the sustainability-minded company Unilever with 3 million gallons of this algae oil for its soaps and toiletries. “We’re also finding in a recent study that we’ve had done that has been third-party reviewed,” says Johnson, “the greenhouse gas emission profile with the algae oil produced at our plant based in Brazil, where  he sugar source is sugarcane, has a lower carbon footprint than that of palm oil and palm kernel oil.” But despite palm oil’s problems and the promising alternatives, Boucher says the crop does have some advantages. “It actually accumulates carbon dioxide from the atmosphere in the process of growing. So if you produce it in areas that are not forested, but rather you use already-cleared land, you can actually have a positive benefit from it.”...http://www.pri.org/stories/2015-09-19/yes-palm-oil-destructive-scientists-are-creating-compelling-alternatives

Sustainability: Paying farmers and preserving forests 9/16/2015 -  by Jeff Gelski; Barry Callebaut, Zurich, Switzerland, issued its own sustainability report for 2013/14, which found 60% of cocoa farmers in Cóte d’Ivoire are living below the poverty line. Barry Callebaut pays a premium for “sustainable beans,” which it defines as being produced either according to a certification scheme such as Utz Certified or Rainforest Alliance or to Barry Callebaut’s own Quality Partner Program.  Under the Cargill Cocoa Promise, farmers receive a premium by selling Utz, Rainforest Alliance and Fair Trade certified cocoa beans, said Taco Terheijden, sustainable cocoa manager for Cargill Cocoa and Chocolate. Under the Cargill Cocoa Promise, $19 million was paid to farmers in Cóte d’Ivoire, Brazil, Cameroon, Ghana and Indonesia in 2014....As of April, 35% of the palm oil sourced by IOI Loders Croklaan was certified by the R.S.P.O. and traceable to the mill and plantation level, according to the company, a palm oil supplier and R.S.P.O. member with a North American office in Channahon, Ill. IOI Loders Croklaan added 96% of the palm oil and 65% of the palm kernel oil that it sources is traceable to the mill level.   Archer Daniels Midland, based in Chicago and an R.S.P.O. member, issued a commitment to no-deforestation this year. The commitment includes no deforestation of high carbon stock or high conservation value areas, no development of peatlands, and no exploitation of people and local communities. .... Bunge has a global palm oil sourcing policy that involves the protection of high conservation value areas, the protection of peat areas, and the prohibition of forced and child labor.   Cargill provided an update on supply chain traceability for the first half of 2015. Cargill has completed 9 of 11 planned supplier field assessments in its palm oil supply chain. The Forest Trust conducted the field assessments. The goal is to achieve 100% traceability to the mill by December of this year and to provide palm oil that is 100% traceable to sustainably managed plantations by 2020....http://www.foodbusinessnews.net/articles/news_home/Supplier-Innovations/2015/09/Sustainability_Paying_farmers.aspx?ID=%7B035B2B6E-A7D2-46E1-A19F-0415FAC28B71%7D&cck=1

A new business model for palm oil? The recent haze in Southeast Asia has sparked renewed calls for alternatives to palm oil products. In this interview, Forum for the Future founder Jonathon Porritt tells Eco-Business why the industry - which is also provides thousands of livelihoods worldwide - needs a new business model, not boycotts.  By Vaidehi Shah Friday 16 October 2015 http://www.eco-business.com/news/a-new-business-model-for-palm-oil/

Why Sustainable Palm Oil Is Possible by The Nature Conservancy Posted: 10/14/2015 2:36 pm EDT   Updated: 10/14/2015 2:59 pm EDT http://blog.nature.org/conservancy/2015/10/14/why-sustainable-palm-oil-is-possible/

Can REDD save Indonesia’s peatlands from burning?   By Chris Lang 14 October 2015  http://www.redd-monitor.org/2015/10/14/can-redd-save-indonesias-peatlands-from-burning/

Hit companies where it hurts by Henry Barlow Oct 1, 2015, 5:58 pm SGT The contributors to the haze appear not primarily to be the larger oil palm plantation operators but relatively small estates, owning perhaps only one or two mills, or independent mills depending largely, if not exclusively, on fruit submitted from smallholders. Many such operators and smallholders have no wish to comply with sustainability principles. Could the Monetary Authority of Singapore instruct banks operating in Singapore not to extend financing and trading facilities to companies linked to mill owners who are not in compliance with agreed sustainability principles as required by the Indonesian Sustainable Palm Oil (ISPO) or Roundtable on Sustainable Palm Oil (RSPO) standards? These companies should also be required to provide independently certified reports that they have assisted all mill owners and smallholders submitting fruit to their mills in complying with the sustainability principles of ISPO or RSPO. Other central banks in he region could also adopt similar measures. http://www.straitstimes.com/forum/letters-on-the-web/hit-companies-where-it-hurts


RSPO Roundtable (RT12) 2014 (update 6): WWF welcomes RSPO move to expel and suspend members over annual reporting

RSPO hosted its 12th Roundtable annual meeting, marking 10 years since its creation as a Swiss entity. The RSPO sponsors in The Guardian of the UK -  "The palm oil debate is funded by the Roundtable on Sustainable Palm Oil. All content is editorially independent except for pieces labeled advertisement feature..."  (see links below). On the agenda were numerous topics. - listed here: http://rt12.rspo.org/c/rt12-programme/.

10 December 2014:

Thanks to a reader for pointing this out. RSPO has faced some issues in getting all its members to report on their annual data and progress. Some also ask about incomplete reporting.

Palm oil sustainability body to expel non-compliant companies, Posted on 21 November 2014  |    Kuala Lumpur, Malaysia:  "WWF has welcomed a move by the Roundtable for Sustainable Palm Oil (RSPO) to expel member companies that have failed to keep even their most basic promises to the sustainability body.... At the organizations’ 12th annual meeting, the Chair of the RSPO Board announced that member companies who have ignored annual reporting requirements for the last three years will be expelled within six weeks and those failing to report over two years will be suspended.  Member companies are required to report annually on progress towards time bound plans to reach sustainability milestones.... This is a sign that the RSPO has finally lost its patience with those members who have been bringing the organization into disrepute by failing to make commitments, never mind keep them,” said Adam Harrison, WWF’s lead on its work on palm oil.... http://wwf.panda.org/wwf_news/?233592/Palm-oil-sustainability-body-to-expel-non-compliant-companies

26 November 2014: what was missing from RSPO RT12 - post-event notes

Thank you to readers for pointing these out....

The Big Question: Will RSPO Officially Condemn 'No Palm Oil' Labels at RT12? 18 November, 2014;  http://palmoilfactchecker.org/2014/11/the-big-question-will-rspo-officially-condemn-no-palm-oil-labels-at-rt12/

Stop ‘no palm oil’ labelling; Updated: Sunday November 23, 2014 MYT 8:15:44 PM
 have not seen enough support for Malaysian small farmers from the Sustainable Alliances, especially in regard to the “No Palm Oil” labels. Whilst denigrating palm oil with these labels, the companies that use them such as Galler and Delhaize are risking the trade relationship between Belgium and Malaysia. They could also harm the image of Belgium in Malaysia. In my opinion, Belgians must respect Malaysian products if they want to preserve a good trading relationship at a time when we all need it. It is now a question of how Malaysia will choose to defend their small farmers against these attacks...."

NGO reactions to RSPO RT12:
20 November 2014: The General Assembly is always the exciting part after the RSPO Roundtable and this proved to be so to the end. The resolution to promote traceability within certification was a fascinating shift with possible deep impact on preferences and balances. Keep an eye on this!

Note: traceable GreenPalm, a winner?

UNEP-RSPO collaboration in the news:

Great apes facing 'direct threat' from palm oil farming; Updated: Thursday November 20, 2014 MYT 6:21:27 PM; "KUALA LUMPUR: The destruction of rainforests in Southeast Asia and increasingly in Africa to make way for palm oil cultivation is a "direct threat" to the survival of great apes such as the orangutan, environmentalists warned Thursday.... They said tropical forests were continuing to tumble at a rapid rate, with palm plantations a key driver, despite a decade-old drive by the industry's Roundtable on Sustainable Palm Oil (RSPO) to encourage sustainable cultivation.... The concerns were voiced on the sidelines of the annual meeting of the RSPO, held this year in Malaysia and which concluded Thursday.... "Orangutan and ape habitats are being destroyed," said Doug Cress, Kenya-based programme coordinator with the UN Environment Programme's great ape protection campaign.
........The problem is most acute in leading palm oil producers Malaysia and Indonesia, which account for 85 percent of world production, conference participants said. But it is now also a looming threat in even more poorly regulated Africa, where the industry is set to "explode", according to Cress.... Harrison cited as an example Tesso-Nilo National Park in Indonesia, which was set aside as a preserve for tiger and elephant habitats. "Half of the national park was cleared for palm oil by small-holders. The small-holders then sold the fruits to RSPO members. This is unacceptable," he said.
Harrison said if deforestation continued at current rates, tiger and elephant populations in Southeast Asia could be wiped out within in a decade. -AFP..." http://www.thestar.com.my/News/Regional/2014/11/20/Great-apes-facing-direct-threat-from-palm-oil-farming/

19 November 2014: the smallholder inclusivity problem, more on UNEP deal, Unilever pledge, Cargill status
Good chat with rep from Better Cotton Initiative (cousin of RSPO in the WWF Roundtables stable). This Roundtable was explicitly designed to be highly inclusive of smallholders; the converse of RSPO as many specialists note its big corporation focus (about half percent of RSPO certified output is from smallholders). In four years BCI has a 4 percent global production market share and target 33 percent by 2020. It is not designed to generate a premium but large buyers pay a volume based fee to support ancillary services to support cotton farmers yield improvement and cost efficiency. The agriculture outreach was initially funded by donors. BCI looks to adapt its standard for corporate cotton farms.
RSPO reports $4 million funds to develop smallholder certification. Many NGOs are looking to assist on this. Smallholders represent at mid-2014 some 0.6 percent (with just over 14,100 hectares) of the total RSPO certified area. RSPO is in its tenth year of operation. Keep an eye on this!

News links:

Sustainable palm oil enters the UN environmental agenda by Vincent Lingga, The Jakarta Post, Kuala Lumpur | Business | Wed, November 19 2014, 12:16 PM; "The development program for socially, environmentally and economically sustainable palm oil is poised to accelerate following the signing of a cooperation agreement between the United Nations Environment Programme (UNEP) and the Roundtable on Sustainable Palm Oil (RSPO)... UNEP senior executive Douglas Cress noted on Wednesday that cooperation should be a model for the sustainable development of other farm commodities, as the RSPO engaged all representatives from the whole spectrum of the palm oil supply-chain.... He added that the UNEP-RSPO engagement aimed to raise global awareness about sustainable palm oil and generate market demand for an important commodity that has the potential to play a key role in preserving the earth’s biodiversity...."

Unilever to Use Only Sustainable Palm Oil in European Foods by End of Year
Company Pledges to Use Only Traceable, Sustainable Palm Oil World-Wide by 2020

Cargill Publishes First Palm Oil Progress; Cargill today released its first progress report on sustainable palm oil. The report lays out the company’s action plan to achieve a fully sustainable supply chain. "Sustainability has long been part of our palm ... http://wc4.net/t?r=1453&c=3870773&l=36989&ctl=4C3B20C:FCB2C9F06EB032236D766D156048A097F0CE68744B36A4D6&

18 November 2014: Food labeling context, UNEP deal and RSPO RT12 in the news
RT12 to look at preparing for sustainability and what comes next by Bernama. Posted on November 10, 2014, Monday; KUALA LUMPUR: "The 12th Roundtable Meeting on Sustainable Palm Oil (RT12), organised by the Roundtable on Sustainable Palm Oil (RSPO), will look at trends pointing towards the evolutionary path of sustainability and how to prepare for it... The annual meeting, set to take centre stage here on November 17 to 20, was previously held in Medan, Indonesia.... RSPO Secretary General, Darrel Webber, said the RT12, themed ‘Sustainability: What’s Next?’, would discuss current challenges faced by members and stakeholders such as multiplicity of standards and constant change in demand from the market.... “This year’s meeting will consist of four types of formats – small intense group sessions, plenary sessions, panel discussions as well as a more interactive session called World Cafe, where we go around the table and ask questions... The highlight of this year’s event is a keynote address and panel discussion led by award-winning scientist, environmentalist and co-founder of the David Suzuki Foundation, Dr David Suzuki...RSPO now have over 1,791 members from from 72 countries including Germany, UK, the Netherlands, Malaysia and Indonesia. — Bernama..."  http://www.theborneopost.com/2014/11/10/rt12-to-look-at-preparing-for-sustainability-and-what-comes-next/#ixzz3JQHGzvM2
UN to promote RSPO-certified palm oil as conservation solution mongabay.com November 14, 2014; "The United Nations Environment Programme (UNEP) has signed an agreement with the Roundtable on Sustainable Palm Oil (RSPO) to promote eco-certified palm oil as part of the broader effort to conserve biodiversity.... The move, announced Thursday, commits UNEP and RSPO to work together to uphold standards for certified palm oil and encourage uptake in global markets. UNEP says RSPO-certified palm oil could contribute toward UN development goals...." http://news.mongabay.com/2014/1114-unep-touts-greener-palm-oil.html#sthash.UZ2BfqWc.dpuf
Borneo's industry-environment balancing act - Deforestation in Indonesia has led some to demand tighter standards for the multi-billion-dollar industry. Kate Mayberry  Last updated: 17 Nov 2014 06:30; "Kuala Lumpur, Malaysia - The island of Borneo is on the front line of an ongoing struggle to find a balance between the environment and commerce.... At one time, Sanchez was hopeful that the Roundtable for Sustainable Palm Oil (RSPO) would succeed in its goal to make plantation companies more responsible and slow the pace of deforestation. But orang-utans continue to be driven from their treetop homes.... Still, some industry insiders argue RSPO is dominated by Western NGOs and big buyers, and its stricter benchmarks are too demanding and expensive for smaller producers to implement... The RSPO's not just about a standard," Webber said. "We are about transparency. We add credibility. We are an avenue to seek recourse. We have global maps of our certified members that you can see online www.rspo.org now, check where they are, whether they've deforested in the past.... "We do terminate and we do suspend," he said. "But we try our best to mediate. Conflicts do not stop if we terminate a member. Conflicts will stop if a member operates within our framework and starts engaging with affected parties..... No other commodity, I think, has done the same. It's only palm oil that's done it and it's palm oil through the RSPO that's done it," he added...." http://www.aljazeera.com/indepth/features/2014/11/borneo-industry-environment-balancing-act-201411167578572422.html
Campaign for sustainable palm oil becomes more vigorous by Vincent Lingga, The Jakarta Post, Kuala Lumpur | Business | Tue, November 18 2014, 10:50 AM; "Some 800 delegates from 30 countries began a three-day meeting here on Tuesday to discuss the latest developments in the campaign for socially, economically and environmentally sustainable palm oil... The discussions within the 12th annual conference of The Roundtable on Sustainable Palm Oil (RSPO) are taking place against the backdrop of some positive developments as industries in the UK, France, Germany, Sweden, Netherlands, Norway, Denmark and Belgium have all pledged to buy 100 percent RSPO-certified palm oil by 2015.... This pledge will coincide with Europe leading up to the entry into force of the new food labelling regulation at the end of this year, when palm and other vegetable oils will appear on product packs, RSPO Secretary General Darrel Webber noted.... The principles of sustainable management promoted and assessed under the schemes of RSPO, ISPO (Indonesia) and MSPO (Malaysia) for their respective certification are by and large similar: covering such elements as transparency, legal and regulatory compliance, best production practices, environmental responsibility and commitments to local community development, human rights, land rights etc....  Webber said efforts are now underway to develop synergy between the certification programs because their primary goal is the same: to develop palm oil as a major source of vegetable oil in socially, economically and environmentally sustainabe practices..." http://www.thejakartapost.com/news/2014/11/18/campaign-sustainable-palm-oil-becomes-more-vigorous.html
12 November 2014: RSPO sponsored palm oil debate in The Guardian:
From rainforest to your cupboard: the real story of palm oil - interactive by Laura Paddison, Jenny Purt, Josephine Moulds, Oliver Balch and Yosef Riadi and Ulet Ifansasti in Riau province, Indonesia
Monday 10 November 2014 13.00 GMT; "You wash with it, you brush with it, you toast it, it’s in 50% of what you buy – but what’s the real story of palm oil? Use the interactive below to trace the journey of palm oil from the rainforest through to your kitchen cupboard... Does the story of palm oil affect your buying habits?... Put your palm oil questions to a panel of experts in our online live chat.. Produced for the Guardian by Nice & Serious..." http://www.theguardian.com/sustainable-business/ng-interactive/2014/nov/10/palm-oil-rainforest-cupboard-interactive
Palm oil: the secret in your shopping basket - have your say; "Implicated in deforestation, the destruction of natural habitats and climate change, the ubiquitous oil is in 50% of what many buy - from shampoo and lipstick to bread and margarine - but do consumers care?... But where does this deeply controversial yet hidden ingredient come from? Our interactive tracks the journey of palm oil from the rainforests of Indonesia, Malaysia, and increasingly Latin America and Africa, to your kitchen cupboard.... It explores the complicated story of a commodity which has undeniably negative effects. Millions of hectares of virgin rainforest have been cleared in some of the world’s most biodiverse countries to make way for palm oil plantations. In the process people have been displaced, livelihoods undermined, endangered animals such as orangutans have lost their natural habitat and sometimes their lives, and the draining of peatland has released millions of tonnes of CO2 into the atmosphere exacerbating climate change...." http://www.theguardian.com/sustainable-business/2014/nov/10/palm-oil-secret-in-your-shopping-basket-have-your-say

Manifesto 5 stepping up efforts (update 5): The tussle over HCS and 35tC/ha

7 October 2014: The tussle over HCS and the 35tC/ha policy step down

Khor Reports: The HCS issue is now at the forefront via two major studies, one rooted in academia (the Manifesto or SPOM group) and one lead by TFT-Greenpeace which first used a provisional 35 tC/ha or tonnes carbon per hectare ceiling based on a pilot study at GAR / PT SMART's Kalimantan degraded estates. However, TFT since says that's  no longer the ceiling; stating that 35 is a "non-existent mirage" used by those not committing to stepped up pledges to fear monger (i.e. 35 is too restrictive of development?).

So what was the 35tC/ha ceiling? In our talks to specialists, that is the life-time average carbon of the oil palm tree (it is referred to in a key RSPO working group document too); thus NGOs said that to be carbon neutral in some sense, oil palms should not be developed in forested areas with more than its own above ground carbon value. Of course, even the oil palm carbon measure is contested - do you include the fronds, fresh fruit bunches and ground cover etc? You may also ask why a crop is compared to trees - some say that may have been inadvertently abetted by some in the industry claiming that the oil palm is as good as a (forest) trees in the first place. Thus, solidifying the tree basis of comparison (which does not apply to other oilseed crops?).

So what will be the basis of "no deforestation"? A higher ceiling? Earlier, some spoke of 100tC/ha as a possibility. Some stepped up pledges have added parameters, such as Wilmar's (via a TFT traceability program) which has a multi-year no human use caveat. Individual B2B traceability programs may have varying parameters compared to the multi-stakeholder efforts such as the RSPO-based.

The details of HCS will emerge soon, as the pressure is on for the two HCS studies to find their conclusions and gain global buyer acceptance.

More reading:
Thanks to a reader for highlighting this, the TFT perspective on high carbon stocks which climbs down from the 35 tC/ha ceiling, http://between2worlds.com/short-history-of-hcs/; 35 tons of aboveground biomass is increasingly the number used to define high conservation value forest for greener palm oil initiatives. Image from Greenpeace:
TFT's Scott Poynton writes: "A key question emerged from Greenpeace: “If the accepted threshold is 35tC/ha above- ground biomass and field work reveals that 70% of a given concession is off-limits, what will GAR do? Throw the 35tC/ha threshold out the window and develop anyhow OR respect the threshold and protect the forested areas?”...The noise around 35 really is just that, a noisy mirage created by the communications teams of those companies and industry bodies that want no constraints placed on the amount or ecological condition of land that they can develop.... Brand Palm Oil does have a serious deforestation problem and the sooner it can stop fretting about a non-existent mirage called “35”, the sooner it might solve it."
Khor Reports blog posting on HCS and related topics (more recent at top, going back to landmark GAR-TFT deal in 2011):

6 October 2014: Green Tigers pans SPOM (Manifesto) group

Report rates palm oil companies on sustainability commitments by mongabay.com; October 05, 2014; "A new report published Forest Heroes, an advocacy campaign pushing for an end to deforestation, ranks global palm oil companies on their sustainability commitments.
The Green Tigers, authored by Glen Hurowitz, reviews the recent history of environmental policies in the palm oil sector.... The report notes that most of the companies that are signees to the Sustainable Palm Oil Manifesto (SPOM), a commitment established this year, are on the yellow or red lists, while Palm Oil Innovation Group (POIG) companies are on the green list. Environmentalists have criticized SPOM as having weaker criteria than POIG, although several SPOM members just committed to a one-year moratorium on clearing of potential high carbon stock areas while they work out a definition of what constitutes forest...." http://news.mongabay.com/2014/1005-palm-oil-sustainability-rankings.html#YbvjysWgkr8SCwBM.99; Glenn Hurowitz, Forest Heroes Campaign Chair / Managing Director of Climate Advisers (advisor to Wilmar alongside TFT in its 5 December 2013 commitment).

21 September 2014: More slowdown in new plantings? Moratorium on deforestation by Manifesto 5.

Palm oil giants announce deforestation moratorium -- effective immediately by  mongabay.com, September 20, 2014; "On Friday, Asian Agri, IOI Corporation Berhad, Kuala Lumpur Kepong (KLK) Berhad, Musim Mas Group and Sime Darby Plantation said they will suspend forest clearing until they have completed a year-along study that aims to establish a threshold for defining what constitutes high carbon stock (HCS) forest.... The move comes after intense campaigning by environmentalists pushed dozens of major palm oil buyers to establish zero deforestation sourcing policies for palm oil, which is one of the top drivers of forest conversion in Malaysia and Indonesia. At the time of the announcement, several major palm oil producers and traders — including Golden Agri-Resources, Wilmar, and Cargill — had already established zero deforestation commitments based on a definition of 35 tons of carbon per hectare, effectively barring conversion of old-growth forests, secondary rainforests, and peatlands.... The moratorium may provide a temporary reprieve from green groups, which have portrayed the five companies — dubbed the Sustainable Palm Oil Manifesto Group for the name of their sustainability initiative — as laggards in the sector for continuing to chop down forests. NGOs that ran campaigns against the firms — including the Union of Concerned Scientists (UCS) and Rainforest Action Network (RAN) immediately welcomed the announcement, as did Green Century Capital Management, an investment advisory firm that a week earlier called for a deforestation moratorium...." http://news.mongabay.com/2014/0920-palm-oil-deforestation-moratorium.html#U0ZeOH0a1J6Fx7mU.99
13 September 2014:
In late August, two high carbon stock study group meetings for palm oil were underway. One was in Kuala Lumpur and the other in Singapore. Interestingly, several companies straddle both efforts and programs - including Wilma and Cargill (correction: not Unilever at this point).
In KL was the Manifesto Group that is building on RSPO certification. Its website is here: http://www.carbonstockstudy.com/Home, and the Sustainable Palm Oil Manifesto can be read here: http://www.carbonstockstudy.com/The-Manifesto/About. Its HCS study is co-chaired by Sir Jonathon Porritt and Dr John Raison of CSIRO Australia. Dr Raison shared the Nobel Peace Prize in 2007 with many other IPCC scientists and Al Gore. It appears that a scientific route is the hallmark of this effort.
We'll look out for more information on these.