17 July 2014

100% certified palm oil – what does it mean?


“When people come here, it opens their eyes. The situation is different from what they thought,” tells Neste Oil’s Rolavia Intan. 100 percent of palm oil Neste Oil purchases is certified. Intan and her colleague Jimmy Tan make the initial audits. They reveal how the certification work is done and what is achieved.

Most of the world’s palm oil is produced in Indonesia and Malaysia. Oil palm produces 4–10 times more oil than other oil-bearing crops per unit of cultivated land. Replacing palm oil with other kind of vegetable oil would mean that much larger areas would be needed for agricultural land. Cultivating palm oil is, therefore, an efficient way to grow food for world’s population and to meet the ever increasing demand for oil and fats. Palm oil also gives work to millions of people, and reduces poverty.

Unfortunately, palm oil cultivation can be done in a very irresponsible way. It has caused deforestation. If a tropical forest is cleared to make space for palm oil plantations, it can accelerate climate change and destroy habitat for endangered species. Some plantations have even been responsible for forcibly displacing people from their land.

Neste Oil takes these issues very seriously. Palm oil is used as one of the raw materials for Neste Oil’s renewable diesel. To prevent problems Neste Oil buys only certified palm oil. Initial audits are made by Jimmy Tan and Rolavia Intan in Neste Oil’s Singapore office.

Some plantations are 100 years old

“All our oil is traceable. We know where it comes from,” says Rolavia. Important part of the RSPO (Roundtable on Sustainable Palm Oil) certification is to ensure that no deforestation occurs. Regulations aim to ensure that no new primary forests or high conservation value areas have been cleared for palm oil production since November 2005. Many of the plantations have been in operation for decades.

“Palm oil production can certainly be sustainable. Some of the plantations have been there for 100 years,” says Jimmy Tan.

“We ensure that our suppliers use sustainable practices to make sure that the environment and biodiversity are not harmed by the cultivation of the crop. Indeed, the Malaysian oil palm plantations have adopted a set of Good Agricultural Practices (GAPs) to minimize the impact of their activities on the environment,” says Jimmy.

“We also make sure that there is no exploitation of people or local communities,” he explains. Certification covers things like workers’ rights as well as social and environmental issues. How the operation is carried out?

“We help small farmers get certified”

“If a potential supplier is not yet certified, we start from a baseline check,” tells Jimmy. “Then we know how far they are from getting a certificate, and what corrective action is needed.”

One has to remember that most of the farms are quite small. Neste Oil purchases crude palm oil from over 54 000 smallholders. “They often don’t know how to get certified. We teach them and help them to do it,” Rolavia says.

“After initial checks we make a visit to the plantation to see that everything is in order,” says Jimmy who is responsible for on-site audits.

“For me it is nice work because I worked in plantations for over 30 years before I joined Neste Oil. I know plantation management very well.”

After signing a purchasing agreement audits continue. “Suppliers are checked every year by a third party auditor during a surveillance audit. We make additional audits if we suspect that something is not right,” explains Jimmy.

“100 percent difference in lives”

Last year Neste Oil achieved its goal of purchasing only certified palm oil, two years in advance of the target. What made it possible? “It was a group effort. Everybody contributed to the project,” says Rolavia.

Certifications are also continually improving. “They are good compared, for example, to rubber production,” she says.

Many farmers were earlier cultivating rubber trees. “Switching to oil palm can make a 100 percent difference in their lives,” says Rolavia. “They can educate their children, construct a house, or buy a car. Palm oil really helps farmers.” Certification adds to this because certified palm oil can be sold at a premium.

“People need to see the real situation,” says Rolavia. “When they come here, it opens their eyes.”