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:
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.
Palm Kernel Expeller (PKE)
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.
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.