EDWIN VAN DER HOEK Supply Chain and Buying Options 091208

RSPORoundtable on Sustainable Palm Oil

Supply chain & Buying options

RSPO certified Sustainable Palm Oil

RSPO

www.rspo.org


• Code of Conduct: “Every member supports,

promotes and works towards the production,

procurement and use of sustainable palm oil”

Commitment


AgendaAgendaAgendaAgenda

1. Making choices

2. Supply chain options

3. Claims and requirements

4. Conclusion and questions


1. MAKING CHOICES1. MAKING CHOICES1. MAKING CHOICES1. MAKING CHOICES


Intention

Reputation risks

Legal requirements

Costs

Making Choices


2. SUPPLY CHAIN OPTIONS2. SUPPLY CHAIN OPTIONS2. SUPPLY CHAIN OPTIONS2. SUPPLY CHAIN OPTIONS


The palm oil supply chain

Plantations

Refiners &

Blenders Ingredient

Manufacturers

Retailers

Mill

Product

Manufacturers

Transport & Shipping

Unit of certification

Palm oil supply chain

Smallholders

Trade


‘Book and Claim’:

Certified palm oil is not kept apart. Suppliers sell/

consumers buy certificates; claimed volumes are

matched

‘Mass Balance’:

Mixing of sustainable and conventional oil allowed,

if monitored administratively

‘Segregation’:

Mixing of sustainable palm oil batches is allowed

‘Identity preserved’:

Sustainable oil kept apart, traceable to plantation

Supply chain certification

systems


3. CLAIMS AND REQUIREMENTS3. CLAIMS AND REQUIREMENTS3. CLAIMS AND REQUIREMENTS3. CLAIMS AND REQUIREMENTS


Claims

Book & Claim/Mass Balance

“... advances the production of RSPO-

certified sustainable palm oil (equivalent

to ..% of the palm oil utilized)

“... advances the production of RSPO-

certified sustainable palm oil (equivalent

to ..% of the palm oil utilized)

‘Mass Balance’‘Mass Balance’

RSPO-certified

+ conventional

plantations

RSPO-certified

+ conventional

plantations

CertificatesCertificates

RSPO-certified

plantations

RSPO-certified

plantations

‘Book &

Claim’


Claims

Segregated/Identity preserved

“This product contains [only/..%]

RSPO-certified sustainable palm oil”

“This product contains [only/..%]

RSPO-certified sustainable palm oil”

‘Identity

Preserved’

‘Identity

Preserved’

Specific RSPO-

certified

plantation

Specific RSPO-

certified

plantation

‘Segregation’‘Segregation’

Several RSPO-

certified

plantations

Several RSPO-

certified

plantations


Book & Claim

requirements

Buyers need to become GreenPalm member

Certificate purchases through the on line GreenPalm

system

Claimed volumes cannot exceed certificates obtained


Segregation & Mass Balance

requirements

All players in the chain

need to be RSPO member

All processors need to be

RSPO supply chain certified

All deliveries up to final

refinery to be reported in

UTZ online monitoring

system

Mass balance

Segregation


Membership fees

RSPO Membership fee

�Usage > 500 ton -> €2000/year

Regular Membership fee

�Usage < 500 ton -> €100/year

Supply Chain Associate membership

GreenPalm membership

� Free for RSPO members

� $500/year for non-RSPO members




– Short-term: self-declaration/assessment

• Until March 31st 2010

– Longer term: independent third party certification

• As of April 1st 2010

Ensures ‘secured pipeline’ through check of

volume in/ volume out

If Segregated model is used: ensures segregation


UTZ reporting

Only pre-refinery (ends at refinery at destination)

Each seller that wants to deliver a consignment needs to report to UTZ (number assigned)

Each buyer that wants to confirm his purchase needs to confirm his receipt including the UTZ number

Avoids double counting


Summary key requirements

Certificate trading

– No supply chain organization: end user buys certificate

directly from plantation

– Managed and registered by GreenPalm

Systems with link to the physical flow

(Segregated/IP and Mass Balance):

– RSPO membership

– Supply chain certification

– UTZ system - only until refinery at destination


CONCLUSION & QUESTIONSCONCLUSION & QUESTIONSCONCLUSION & QUESTIONSCONCLUSION & QUESTIONS


Conclusions

RSPO has approved four supply chain mechanisms

All can be used depending on companies choice

In order to work towards the production of

sustainable palm oil, it is important to see demand

materializing



Relevant documents

www.RSPO.org:

Summary Factsheet: RSPO Supply Chain Systems

Overview

RSPO Supply Chain Certification systems

Communications and claims guidelines

www.Greenpalm.org

www.Utzcertified.org

http://www.UTZcertified.org/index.php?pageID=225&showdoc=225_1_21


Thank You!

RSPO Secretariat

Kuala Lumpur, Malaysia

WWW.RSPO.ORG

Telephone : +60 3 6203 5969

Email : [email protected]

RSPO EU Communicatons

[email protected]


Back up slides


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Where we are

Source: Certification Summaries

Supply of RSPO-certified sustainable palm oil growing rapidly

Annual production capacity of certified crude

palm oil & palm kernel oil (in million tonnes)


Where we are

Sales of RSPO-certified sustainable palm oil growing but volatile


RSPO-certified planted area (as of May, 2009)

350.000 hectare, or 60 km x 60 km

Indonesia,

Sumatra

Malaysia,

Sabah

Malaysia,

PeninsulaPapua New

GuineaIndonesia,

Kalimantan

Where we are

Source: Certification Summaries


Where we go from here

By end of 2009:

Capacity to supply 3

million metric tonnes

per year

(±±±± 8% of production)

Ultimately,

RSPO aims to see

all the world’s palm oil

produced in a

sustainable way

Documents

EDWIN VAN DER HOEK Supply Chain and Buying Options 091208