Palm Oil Buyers Scorecard

APPENDIX 1: SUPPLY
CHAIN OPTIONS
Companies can buy palm oil and its
derivatives certified by the RSPO
through three main supply chain
systems: segregated and identity
preserved; mass balance; and book
and claim.
All three options have the same starting point – a plantation is successfully audited
against the RSPO principles and criteria and the total volume of CSPO that it can
produce a year is established. Each option has strengths and weaknesses – but each
also has a particular role to play in transforming the global industry.
Segregated
and identity
preserved CSPO
What is it? As the name suggests, segregated CSPO is certified palm oil that is
physically separated from non-certified palm oil all the way from the palm oil mill
to the end user. Identity preserved CSPO, a sub-category of segregated CSPO, can
be traced back to a single certified estate and mill. Segregated CSPO may include a
mixture from different certified mills, but is not mixed with conventional palm oil.
All the fresh fruit bunches (FFBs) entering a segregated or identity preserved mill are
verified as having come from plantations that have met the RSPO standard.
Benefits: This option guarantees that the end product contains 100 per cent CSPO
unmixed with oil from other sources, meaning the oil used is not contributing to illegal
or unsustainable practices. It also requires companies along the whole supply chain
to understand where they are sourcing from and to make sure that both suppliers and
customers are using sustainable palm oil. This builds a relationship and trust between
the different companies and fosters collaboration between supply chain actors.
Ultimately, it will be much easier for the entire global industry to achieve sustainability
when palm oil is traded transparently, rather than anonymously as a bulk commodity.
Disadvantages: Segregated and identity preserved CSPO can be expensive because
the two streams of certified and non-certified oil or derivatives need to be kept
physically separated throughout the entire supply chain.
Mass balance
CSPO
What is it? This option allows companies along the supply chain, such as traders
or refiners, to mix CSPO with non-certified palm oil. Companies at each stage of the
supply chain must clearly record what proportion of the total palm oil they are selling
is CSPO. A strict administrative tracing system prevents more palm oil being sold at
the end of a mass balance CSPO supply chain than the total volume of CSPO bought at
the start.
Benefits: Mass balance is cheaper than segregated CSPO, as it avoids the costs of
keeping certified and non-certified palm oil entirely separate. It requires the middle
52 WWF PALM OIL BUYERS SCORECARD 2016