12 September 2014

TFT verifies accountability of palm oil procurement


Collaboration with environmental organization The Forest Trust (TFT) that focuses on preserving forests plays its part in ensuring that Neste Oil acts in the way it has promised when procuring palm oil. When the collaboration began, TFT performed a third party assessment of the Neste Oil palm oil supply chain.

Established by Scott Poynton, TFT is an international non-profit organization specializing in the development of raw material supply chains. Neste Oil decided to partner up with TFT in 2013.

"We wanted a reliable third party assessment of our palm oil procurement process," explains Simo Honkanen, Neste Oil Vice President, HSEQ and Sustainability.

TFT comprehensively studied Neste Oil's entire supply chain based on information obtained from public sources and procurement information from Neste Oil. TFT also received information directly from palm oil suppliers.

The Phase One report drafted independently by TFT was completed in late April.

"TFT ascertained that we have been very successful in managing our supply chain. They did not find any immediate high-priority issues related to de-forestation or any other sustainability criteria covered by the study in our direct supply chain. Of course, there might occur critical issues, and we are working with TFT to identify risk areas and address them", says Simo.

Since the completion of the report, Neste Oil has reviewed the results together with the palm oil suppliers.

"These discussions were very open and fruitful. We talked about making our operating principles public, for example."

Next, TFT will visit eight palm oil farms and arrange a series of discussion and participation events with palm oil producers.

"They will study, for instance, whether the producers' instructions and commitment comply with our instructions aiming at preserving forests. We want our suppliers to be as committed to preserving forests as we are."

TFT and Neste Oil also aim at involving smallholders in this accountability work.

"43% of the cultivated surface area in Indonesia is managed by smallholders, and palm oil is a major source of income in this area. The smallholders should apply the same principles as any other suppliers, but they require much more support than large enterprises."