Palm Products

High standards of sustainability for any palm products in our supply chain.

Fonterra is concerned about tropical deforestation and the carbon emissions to which the establishment of palm oil plantations has contributed.

We also care about the way workers are treated in our supply chain and expect vendors in our supply chain to uphold human rights in their operations.

Since 2009, Fonterra has been a member of the Roundtable on Sustainable Palm Oil (RSPO), which is a non-profit organisation set up by World Wildlife Fund (WWF) to promote the growth and use of sustainable palm oil products through credible standards and engagement with stakeholders.

Roundtable on Sustainable Palm Oil (RSPO)

Find out more about the Roundtable on Sustainable Palm Oil.

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In 2015 we achieved our target to only use palm oil sourced through the Green PalmTM scheme which supports the production of certified sustainable palm oil.

We have also worked with our palm products suppliers and other stakeholders to develop a Palm Products Standard that requires high standards of sustainability for any palm products in our supply chain. We are committed to working with stakeholders to ensure the fair and ethical treatment of suppliers, to avoid deforestation, and to protect conservation values in the palm products supply chain.

Fonterra Group Palm Products Standard - PDF, 170.8 kB

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1 Some palm derivatives for use in specialised products may require additional time to transition.

2 www.rspo.org/certification/supply-chains.

Our Palm Products Standard requires that all vendors of palm products within Fonterra’s supply chain are publicly committed to policies that give equivalent effect to “No Deforestation, No Peatland Development, and No Exploitation” and have business processes in place to enact these commitments.  For more information, see:

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Palm Oil

Fonterra supports the production of certified sustainable palm oil.

Palm oil is a vegetable oil widely used by food manufacturers globally across an extensive range of products. It is used in some products to enhance texture and to bond (emulsify) the ingredients or to provide supplementary fats.

 

As with all inputs into our supply chain, sustainability is a priority for us, and this includes being careful about where we source our ingredients. We support the production of certified sustainable palm oil through the Green Palm™ scheme. Green Palm™ is endorsed by the Roundtable Sustainable Palm Oil (RSPO) and Fonterra is an RSPO member.

 

In 2016 calendar year, Fonterra procured 15,134MT of palm oil ingredients, all of which were from RSPO-certified sources:

 

  • 2.7 percent was from segregated sources where it is kept separate from ordinary palm oil throughout the supply chain

  • 57.0 percent was from ‘mass balance’ sources which are mixed with ordinary palm oil throughout the supply chain

  • 40.3 percent was from ‘book and claim’ sources, where the supply chain is not monitored but credits are purchased from RSPO-certified growers

     

As part of the commitments outlined in the Fonterra Palm Products Standard, Fonterra will move towards sourcing segregated supply palm oil from credible organisations with an aim of 100 percent segregated supply by the end of 2018.

 

All Fonterra Brands New Zealand products fully comply with Australia, New Zealand and international food safety standards.

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Palm Kernel Expeller (PKE)

New Zealand dairy farmers use PKE – a waste product from palm oil production.

This waste product is used as supplementary feed. PKE is a low value by-product of the palm industry and is not the main reason palm fruit is harvested. Most of the value of palm oil production comes from the oil.

PKE plays a role in feeding cows, including during adverse weather such as droughts. Pasture grass is and will remain, the main source of feed in New Zealand – it’s one of our competitive advantages.

 

Since 2016, we have been working with The Forest Trust (TFT) to evaluate the performance of our palm products supply chain and compliance with our Standard.

 

PKE sold by Fonterra’s Farm Source stores in New Zealand is bought through International Nutritionals Ltd (INL), who import it from a single source, Wilmar International. Wilmar has a "no-deforestation, no-exploitation, no peat” policy, respect designated conservation areas and employ wildlife protection experts.

Wilmar International

Find out more about Wilmar International.

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Working with our vendors, we have confirmed 96.7 percent traceability to mill, and 13.1 percent traceability to the plantation for PKE for the year to June 2017.

 

Fonterra believes that protecting New Zealand from foreign bio-security risks is of utmost importance. We fully support the Ministry for Primary Industries (MPI) ongoing actions to strengthen New Zealand’s biosecurity systems.

 

The Wilmar processing plants are located in gated industrial complexes beside export ports and are ISO9002 certified. The PKE is mechanically processed under high temperatures and shipped within a month of production. As an additional precaution, all PKE is fumigated prior to shipment and there are several physical inspections on arrival.

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PALM PRODUCTS

The Fonterra Palm Product Standard

In August 2016, we released the Fonterra Palm Product Standard which commits Fonterra to a higher standard of sustainability and more proactive and transparent monitoring of the palm products that we source globally. This standard was shaped in consultation with our stakeholders:

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The standard requires that:

 

  • Fonterra will move towards sourcing segregated supply palm oil from credible organisations with an aim of 100 percent segregated supply by 2018. 1
  • All vendors of palm products within Fonterra’s supply chain must publicly be committed to policies that give equivalent effect to “No Deforestation, No Peatland Development, and No Exploitation” and have business processes in place to enact these commitments.
  • Fonterra has traceability to mill, with time-bound plans to achieve traceability to plantation.
  • Fonterra will disclose use of palm products and performance of palm products suppliers in relation to this standard.

We have been working with The Forest Trust (TFT) to evaluate the performance of our palm products supply chain and compliance with our standard. Since the end of the financial year we have strengthened this relationship, by becoming a TFT member.

Working with our vendors, we have confirmed 96.7 percent traceability to mill, and 17.7 percent traceability to plantation for PKE purchased through INL for the year to June 2017.

In 2016 Fonterra procured 15,135 metric tonnes of palm oil ingredients, all of which were from RSPO-certified sources2:

  • 2.7 percent was from segregated sources, where it is kept separate from ordinary palm oil throughout the supply chain
  • 57.0 percent was from ‘mass balance’ sources which are mixed with ordinary palm oil throughout the supply chain
  • 40.3 percent was from ‘book and claim’ sources, where the supply chain is not monitored but credits are purchased from RSPO-certified growers.

In Australia, two of our sites also have independent supply chain certification (SSC RSPO), which allows any products we make there containing palm oil to be fully certified.

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