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Overview RSPO Supply Chain Certification System

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1 Overview RSPO Supply Chain Certification System
SCCS M1 May 2013 RSPO LEAD AUDITOR SERIES Overview RSPO Supply Chain Certification System The RSPO Supply Chain Certification System, or SCCS, covers the RSPO supply chain certification requirements and control of claims. This training course, which has been developed by Wild Asia, will cover the core requirements of the SCCS. We have developed several training modules to cover the certification requirements, the standard and rules for market claims. These modules are available as public, in-house or as online training modules. Our course has been endorsed by the RSPO to be suitable for Lead Auditors. All participants will be provided with a certificate where they have completed all the online requirements: quizzes, short assignments and an exam. For more information to register or login: visit

2 Chain of Custody of Certified Palm Oil
Claims of use Certified Palm Oil In general, the supply chain certification system covers the use, handling and communication of certified product from source to its end product. This allows confidence amongst the consumers and users that the use and claims associated with the certified product is credible.

3 M3 l Supply Chain System Overview
16-Apr-17 Overview of the RSPO Palm Oil Product Overview Overview of the SCCS systems RSPO Supply Chain Models This training module will cover the following topics. It will serve as an introduction to the RSPO SCCS.

4 Overview 1. The RSPO This module will present an overview of the RSPO. It will cover present a background to palm oil production and the RSPO as an organisation.

5 Oil Palm & Palm Oil The oil palm tree produces a fruit which is the source of palm oil. Human use of oil palms may date as far back as 5,000 years; in the late 1800s, archaeologists discovered palm oil in a tomb at Abydos dating back to 3,000 BCE. It is believed that Arab traders brought the oil palm to Egypt. Modern use of palm oil is as a vegetable oil or is further processed into a range of palm products. Palm oil contains more saturated fats than the other vegetable oils (for example, canola, corn, linseed, soybeans, safflower, and sunflowers) and it can withstand extreme deep-frying heat and resists oxidation. The palm oil tree naturally occurs in the Americas and Africa. The African oil palm Elaeis guineensis (the species name guineensis referring to its country of origin) is the principal source of palm oil, it is native to west and southwest Africa, occurring between Angola and Gambia. The American oil palm Elaeis oleifera (from English oliferous, meaning "oil-producing") is native to tropical Central and South America and is used locally for oil production.

6 Importance of Palm Oil It is said that less than 30% of all global use of palm oil is based around the “vegetable cooking oil”. The rest of the use is from further processing of the palm oil into its fractions, derivatives and waste products; many of which have found commercial uses. This is one of the key reasons why palm oil consumption is inevitable.

7 Vegetable Oil Production
Although commercial production of palm oil has been evident from the early 1900s, it was not until the late 80s that large developments of palm oil production areas began in earnest. By the 90s, palm oil prices had began to rise and coupled with this began a rapid pace for oil palm cultivation. Countries like Indonesia and Malaysia saw some of the largest areas developed. In this figure here, the annual global production between of palm oil, soy oil and other vegetable oils are presented. Out of these it is evident that palm oil has had the highest production growth rates amongst all these other oils.

8 Where is Palm Oil Grown? There are three main tropical regions where palm oil is most suited to growing. These are concentrated in the Americas, West Africa and the Asia-Pacific. These regions based on their climatic conditions are best suited for commercial palm production. The term “rainfed” refers to areas where the crop depends solely on rainfall and does not require constructed irrigation.

9 Biodiversity Hot Spots
It is equally important to note that all the major palm producing regions are also some of the richest biodiversity hotspots in the world; much of it to related to the distribution of tropical rainforests.

10 Transform Markets for Sustainable Palm Oil
Production & Use Global Standard Multi Stakeholder Association By the end of the 90s, and as we saw earlier this was the period of greatest expansion, the palm oil users, the growers and NGOs began to come together to chart a new future for palm oil. One of the results was the formation of the RSPO as a multi-stakeholder initiative which brings the entire palm oil supply chain together to ensure present and future palm oil will be sustainably produced. RSPO has the Vision to “Transform Markets for Sustainable Palm Oil”. The RSPO has built its core mission around developing a credible global standard for palm oil production; to encourage the production and use of sustainable palm oil; to engage with all stakeholders to ensure palm oil production is sustainable and to ensure that impacts of these efforts are monitored to guide its future improvements. Monitor Social, Economic & Environmental Impact Engage Stakeholders

11 Multi Stakeholder Association
oil palm growers, processors & traders manufacturers of consumer goods retailers banks & investors environmental NGOs social /developmental NGOs Multi Stakeholder Association The RSPO is an association that has been formalized in Switzerland. It maintains a secretariat in Malaysia and is expanding its offices to Indonesia, Africa, Europe and Latin-America. As of May 2013, there are currently 842 members from over 50 countries around the world. As a member, there are three main categories for membership: Ordinary Membership consists of the main players in the palm oil supply chain - oil palm growers, processors & traders, manufacturers of consumer goods, retailers, banks & investors, environmental NGOs and social /developmental NGOs. Affiliate Membership is open to any individual or organizations that are not included in the 7 Ordinary Membership sectors and are interested in supporting the objectives and activities of RSPO. The third category, which was introduced more recently, enables the organizations that are active in the supply chain for certified sustainable palm oil, but do not purchase more than 500 MT palm oil products per year, to be Supply Chain Associates. As of May 2013, RSPO comprises 842 member companies from over 50 countries around the world.

12 RSPO Governance Structure
Comprises ALL RSPO members with annual meetings Comprises 16 members designated by the GA for a period of 2 years The Executive Board is the highest decision making body within the RSPO. It is elected by its members and is structured to represent the seven main categories of membership. The Executive Board is comprised of sixteen members, designated by the General Assembly for a period of two years. The allocation of seats for the various sectors of membership is as follows: Oil Palm Growers: 4 1 Representative for Malaysia 1 Representative for Indonesia 1 Representative for the smallholder sector 1 Representative for "Rest of the World" Palm Oil Processors: 2 Consumer goods manufacturers: 2 Retailers: 2 Banks/investors: 2 Environmental NGOs: 2 Social/development NGOs: 2

13 Members Code of Conduct
It is fundamental to the integrity, credibility and continued progress of the RSPO that every member supports, promotes and works towards the production, procurement and use of Sustainable Palm Oil. All Ordinary and Affiliate Members must act in good faith towards this objective and commit to adhering to the principles set out in this Code. This Code applies to all Ordinary and Affiliate embers of the RSPO with respect to their activities in the palm oil sector and its derivatives All Members, are bound by a Code of Conduct. This was developed to ensure that there was equal commitment between all members of the supply chain to meet the RSPO standards and the values it supports. The Code of Conduct emphasizes that growers and users of palm oil should both develop a “time bound plan” to produce or consume certified palm oil. This time bound plan must be communicated on the RSPO website. As of 2013, the RSPO has developed an IT system to track any members that have failed to submit a Time Bound Plan. This will improve commitments towards this basic code of conduct.

14 2. Supply Chain Illustrated
The Palm Oil 2. Supply Chain Illustrated So how the the fruit, enter the market-place?

15 The source of palm oil is the fruit of the oil palm tree
The source of palm oil is the fruit of the oil palm tree. This is cultivated by small farmers, within smallholder schemes or small to large company-owned plantations. The fruits are harvested and collected in the the field for transport to the mill. This is the first major processing point where the fruits are pressed to produce the oils and other by-products.

16 At the mill, the fruits are received, weighed, graded and then enters the mill ramp for processing. This produces crude palm oil (CPO) which are stored in tanks prior to distribution. The kernal nuts are generally sold or crushed in a separate crushing facility to produce crude palm kernal oil (PKO). The crude oil is usually sold to a refiner who refines the oil for further processing or use. As we saw we the utilization chart, many of the palm products are derived from further processing. These are achieved locally or in facilities around the world.


18 Eventually, the palm products and other ingredients are assembled by manufacturers to produce the final product. If this product is to make a claim that it uses RSPO material it will need to be demonstrated that the palm oil content of the product has been derived from RSPO certified material. Verifying this process is credible is the essence of the RSPO supply chain certification system.

19 Overview 3. SCC System This section provides a quick overview of the main reference documents. These are the source documents that makes up the RSPO SCCS and it is useful to be familiarized with its contents.

20 RSPO Certification System RSPO Supply Chain Certification System
2007 RSPO Supply Chain Certification System 2011 RSPO Supply Chain Certification Standard 2011 The RSPO Supply Chain Certification System, or SCCS, covers the RSPO supply chain certification requirements and control of claims. There are a number of key documents that define the system requirements, standard and rules. These are the main key documents the system refers to: The RSPO Certification System The RSPO Supply Chain Certification System The RPO Supply Chain Certification Standard Rules for Market Communications and Claims Rules for Home and Personal Care Derivatives; and Rules of Membership (including Code of Conduct for Members) The certification requirement is also enhanced by reference to relevant ISO system documents on audit principles and standards. The following section outlines some of the main contents of the various system documents. Rules Market Communication & Claims 2011 Rules Home & Personal Care Derivatives 2012 Membership Rules RSPO/GP/UTZ

21 RSPO Certification System
2007 Accreditation on Certification Bodies Procedures for Annual Surveillances This document outlines the basic requirements for certification bodies and annual surveillances, however, specific requirements are already included in the supply chain system document.

22 RSPO Supply Chain Certification System
2011 Supply Chain Requirements Accreditation of CBs Certification Process Certificate Template SC Certification Report Multi-site Certification Yield Schemes Group Schemes New This document outlines the certification system requirements; and generally involves the requirements for certification bodies.

23 RSPO Supply Chain Certification Standard
2011 Chain of Custody Procedures Training Purchasing Specific Requirements for SC Models SC Models Yield Schemes This document outlines the main supply chain requirements for all facilities.

24 Market Communication & Claims
Rules Market Communication & Claims 2011 General terms Corporate Communication Product-related Communication Rules IP, SG & MB Rules Book & Claim Rules for combined SC Trademark Graphic Design Trademark Application The control of market claims in corporate communication and on product communication is covered in this document.

25 Home & Personal Care Derivatives
Rules Home & Personal Care Derivatives 2012 General Terms Scope Calculation Scheme Feedstock Identification Calculation Method Conversion Factors Finally, rules for converting palm derivatives into Greenpalm certificates is outline here. These rules are specific for facilities producing home and personal care products.

26 SCC System 4. General Requirements

27 To physically manage sustainable palm oil products;
SCS Objective To physically manage sustainable palm oil products; or specifically administrate all purchases and sales of certified products 6

28 SCS Coverage Trade of batches of crude palm oil (CPO) or palm kernel oil (PKO) and its derivatives, products Applicable to all LEGAL OWNERS and PHYSICALLY HANDLE (including receipt and storage) RSPO Certified Products 6

29 CPO, PKO & Derivatives

30 CPO, PKO & Derivatives

31 Scope Facility or parent company are RSPO members
All legal ownership or physically handle product (inc. receipt into storage tanks) Multi-site rules allowed (more later) Group Certification (coming soon)

32 Scope First operator: Palm Oil Mill SC Operator: Refinery/Trader/ Etc
Last operator: end product manufacturer –Palm based products designed and intended for consumption e.g. retailers, consumer good manufacturers, biofuel producers

33 4. RSPO Supply Chain Models
Overview 4. RSPO Supply Chain Models A Supply Chain refers to the movement of product from producer to its end-user. For each end-use the actual supply chain will vary as the raw product undergoes processing or manufacturing. The RSPO recognizes a number of different models for the movement or transfer of certified palm oil from the producer to the end-user. The RSPO SCCS allows for a virtual or physical exchange of certified product. This section will introduce the varies models currently allowed in the RSPO.

34 M3 l Supply Chain System Overview
16-Apr-17 Supply Chain Mechanisms Any individual batch of PO or PKO can be traded through one of these 4 SC mechanisms from grower to product. Traceability for physical oil Identity preserved (IP) Segregated (SG) Mass Balance(MB) Trading for virtual oil Book & Claim All RSPO supply chain models are managed by a third-party service provider. These parties ensure that the accounting, traceability and claims of the certified product will be monitored. In the physical trade of certified product there are three options available. These are systems managed by UTZ on behalf of the RSPO. In the virtual trade of certified product only Book & Claim is accepted. This is a system managed by Greenpalm on behalf of the RSPO.

35 Certified CPO Mill and its FFB source
Product is only from Certified CPO Mill and its FFB source The segregation model assumes the RSPO certified product can be traced back fully to one or more RSPO certified mills and supplying source. It requires that the users of this system controls any likelihood of contamination with non-certified material. The use of the RSPO trademark is allowable where at least 95% of the palm product is derived is traceable to its certified sources. Segregation

36 Certified product is uniquely identified to CPO Mill and its FFB source
The identity preserve model it assumes the RSPO certified product can be traced back fully to one RSPO certified mill and its supplying source. The use of the RSPO trademark is allowable where at least 95% of the palm product is derived is traceable to its certified sources. This situation is rather rare and there are few IP certified facilities and products in the market currently. Identity Preserved

37 Commitment to support production of sustainable palm oil within direct trade/supply chain
The mass balance model allows for the mixing of certified and non certified material. It is essentially an accounting system at the facility level that keeps track of volumes of certified products received and produced. There is a specified conversion yield scheme used to guide MB sales. At the end of the day, the product that can demonstrate that it has at least 95% of certified palm oil products will be allowed to use the RSPO trademark logo. Mass-Balance

38 Commitment to support production of sustainable palm oil
Finally, the Book & Claim system allows for certified producers to convert their outputs into tradable certificates. These certificates are then available to end users to purchase and allows only the use of the Greenpalm logo. Book & Claim

39 Overview 6. Market Claims

40 Product must contain >95% of Certified Palm Products or Components
Use of RSPO Trademark Product must contain >95% of Certified Palm Products or Components WE mean … low impact, good for people and communities and high yields! 6


42 Use of Green Palm Logo End-users can claim that they are promoting the production of RSPO verified sustainable palm oil to the extent that they have redeemed certificates for the year of the claim. Redeemed certificates can not be re-sold. 1 Manufacturers who have bought and redeemed GreenPalm certificates are entitled to claim their support of the production of sustainable palm oil. 2 They can make those claims wherever they see fit, on marketing materials, in news releases and on product packaging using the GreenPalm Sustainability logo. 3 Please remember though that GreenPalm certificates relate to palm oil usage in a given calendar year–January to December– or any part of that year. 4 Businesses that wish to continue making claims in support of sustainable palm oil must purchase new GreenPalm certificates each year. 5 Claims must clearly be ones of support for the production of sustainable palm oil. 6 Statements such as “XYZ brand supports the production of sustainable palm oil” or “supporting sustainable palm oil” are fine. 7 Claims must not state or imply that an individual product or products contain certified sustainable palm oil. 8 Retailers may also claim their support of the production of sustainable palm oil through the GreenPalm programme. 9 Retailers of branded products, with the manufacturer’s written permission, can claim their support off product. Retailers of own label products, who may have bought the GreenPalm certificates for themselves or asked their manufacturer to do so on their behalf, can make both on and off product claims.


44 Questions Name 7 ordinary member categories … what if do not fall in this category? Which RSPO System documents will we find references for … SC Models approved by RSPO Yield Schemes approved by RSPO Process for Accreditation of CBs Questions on Scope of SCS Who’s SC certification? RSPO Member? For diff options What are main criteria for use of RSPO Trademark logo RSPO member > 95% physical product

45 SCC System Registration

46 ie Greenpalm and Utz logo
Etrace – for SPO for now (check if PK is now OK. No for PFAD) FAQ Summarise the info here:

47 Audit Process Certificate only by RSPO-Accredited Certification Body
Certificates valid 5 years with annual surveillance Transfer of CB is allowable* E-Trace for all physical trade or Greenpalm for virtual trade Transfer of CBs SCC Sys 5.4

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