Palm oil: Is certificate trading at odds with traceability?

I write this as a question, but some are positing it as a statement.

Being no expert in anything, and not much of a jack of all trades either, I can’t pretend to know that much about palm oil.

I know some of the players, heard it debated at conferences,met a few executives, NGOs and other interested parties to discuss it, but aside from reading about it, that’s as far as it goes.

But I do know that product traceability is becoming ever more important to companies, particularly in the commodities business.

It’s no longer enough to say, in areas such as cotton for example: “It all comes from a big messy pool in the supply chain and we can’t find the source”.

Back in 2005 some companies said cotton couldn’t be traced back to producer nations such as Uzbekistan. Then, under pressure from campaigners and the media, they found it could. That’s not to say it was easy, but it could be done.

In palm oil, it’s been suggested to me by at least one leading figure in the forestry industry that palm oil certificate trading is unhelpful for companies who need to demonstrate they know and care where palm oil comes from.

The person I spoke to, who has a couple of decades experience in the field, reckons certificate trading is at odds with direct tracing of product origins.

According to him, the notion is being pushed by big commodities firms who, as middle men, have no interest in direct corporate supply chain tracing taking hold in the industry. It cuts them out of the loop.

As a result they are pushing certificates hard, and putting obstacles in the way of direct tracing.

Personally, I don’t know enough to form an opinion in this area as to whether that is true.

But it’s an interesting issue to raise, so here I am, raising it. That’s partly what this blog is for, among other things.

I’d be interested in reader comments on the above.

Has my contact got this wrong, or hit the money on the head? Or is it, like other sustainability issues, way more complicated than this?


  1. Phil Rae

    I'm not an expert in the field of palm oil trading either but not sure that you need to be to form an opinion on this one.
    Surely the demand for sustainable palm oil has been driven by consumers and NGOs who are concerned at reports of the issues which arise from palm oil production. This pressure has in turn caused major manufacturers and retailers to make various commitments to sustainable sourcing.
    Do we think those end consumers would be happy to know that the palm oil in their biscuits or soap was sourced unsustainably but someone had bought a certificate to cover it? I seriously doubt it, the actual source of the palm oil is what is important to these consumers.
    Carbon offsets have had their critics but you can make some positive arguments for certain types. I'm not sure that the same can be said for palm oil certificate trading.

  2. Simply as a concerned consumer, I agree with the point of Phil Rae. Once I am informed of the unsustainability in the sourcing of the company, it no longer makes me feel comfortable with buying all products from that company, which is for me the case of the United Colors of Benetton. The certificate telling us about the origin of the source is though a great idea but as far as consumers are already aware of such tricks of certain companies in obtaining certificates, no matter how tranparent traceability it guarantees, it will not be as effective as a provocative Press coverage on their mischiefs. We, as consumers, are more prone to react to a shocking news than a tiny certificate label.

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