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Preventing deforestation in third party palm and rubber supply chains

In the development of Olam’s own plantations, we have always been committed to no deforestation of high carbon stock and high conservation value forests. 

Mapping our palm and rubber supply chain

As a new entrant to the sector, Olam has the advantage of learning from the sustainability journey that the industry and the various stakeholders have travelled. We have a gestating plantations business in Gabon (see previous section) for which we were the first company in Africa to achieve the RSPO New Planting Procedures, a refining business in Mozambique and a trading business sourcing palm oil from third parties.  In June 2015, we updated our Sustainable Palm Oil Policy, with its Commitment to Forest Conservation, to include targets for ensuring that our third party supply chain is traceable and sustainable:

  • All palm oil suppliers to Olam will have signed the Olam Supplier Code by the end of 2015 (achieved)

This commits our suppliers to ensuring that the palm oil they supply to us can be classed as not impacting on natural resources or the environment.  However, we are also undertaking our own full traceability mapping as follows:

  • Palm oil supplies will be traced back to the sourcing mill of production through information verified from our suppliers
  • We will complete the work we started in 2014 on full traceability of our sources of Crude Palm Oil and Palm Kernel Oil (CPO and PKO) by the end of 2018. This will be based on verified targets for the following years: 2016 – 30%; 2017 – 50% and 2018 – 100%
  • Traceability of Palm Oil derivative products will be completed by the end of 2020. This will be based on the following verified targets: 2017 – 30%; 2018 – 50% and 2020 – 100%
  • We will progressively work with our suppliers to eliminate uncontrolled and unsustainable sources by the end of 2020, including sources that do not conform to our Commitment on Forest Conservation.

In the absence of a globally accepted standard for the new development of rubber plantations, Olam is applying its internal Plantations, Concessions and Farms Code based on FSC®, RSPO and IFC performance standards.

For the supply chain, we have begun our journey to engage rubber suppliers – at least 70% of our rubber suppliers have committed to Olam’s Supplier Code. For sourcing from small-scale farmers at farmgate, we are using the Olam Farmer Information System (OFIS) which is a proven tool to map the supply base and is an interactive platform for yield improvement (see section below for more information). We aim to complete OFIS mapping with 850 farmers in Côte d’Ivoire by the end of 2016.

Collaboration with WRI’s Global Forest Watch Commodities Programme

In 2015 we developed a Memorandum of Understanding to help detect and reduce tropical forest deforestation in our third party supply chains.  This MoU was signed in February 2016.  Key elements include helping Olam to further develop and refine supplier risk assessments as well as helping us to build supplier capacity and understanding of the issues by using the Global Forest Watch platform. GFW also includes a satellite alert system that tracks deforestation in near-real-time. In as little as 8 days after a tree has been felled, Olam would receive an email alert enabling us to investigate and take appropriate action.

Next section: Understanding the smallholder landscape