17 F&B businesses in Singapore commit to sourcing for sustainable palm oil

(From left) Herve Simon, group marketing director of Ayam Brand, Mike Barclay, CEO of Mandai Park Holdings, Andrew Tjioe, CEO of TungLok Group and Andrew Kwan, Group Managing Director of Commonwealth Capital, at the announcement of new members for th
(From left) Herve Simon, group marketing director of Ayam Brand, Mike Barclay, CEO of Mandai Park Holdings, Andrew Tjioe, CEO of TungLok Group and Andrew Kwan, Group Managing Director of Commonwealth Capital, at the announcement of new members for the South-east Asia Alliance for Sustainable Palm Oil.ST PHOTO: SEAH KWANG PENG

SINGAPORE - Singapore has been free from the scourge of haze for the past two years, but at least 17 food and beverage companies here are not taking the clear skies for granted.

The 17 - including major brands such as Crystal Jade, F&N and TungLok, as well as smaller businesses such as Veganburg in Eunos and NomVNom in Tai Seng - have recently committed to sourcing for sustainable palm oil.

Of these, 10 of them made the commitment to do so this year. They include TungLok Group and Commonwealth Capital, whose portfolio includes brands like PastaMania and Baker and Cook.

On Monday (Feb 26), they officially joined the South-east Asia Alliance for Sustainable Palm Oil (Saspo) - an initiative led by the World Wide Fund for Nature (WWF) Singapore.

The alliance, formed since 2016, champions the use of sustainable palm oil in business supply chains, and now has a total of 15 member companies.

The other two F&B businesses that use sustainable palm oil are Veganburg and NomVNom. They are not part of the alliance but told The Straits Times that they have committed to sourcing for sustainable palm oil since last August and September respectively.

Ms Elaine Tan, WWF Singapore's chief executive, said Saspo is the first private sector-led initiative in the region to address the need for sustainable palm oil, in relation to the haze.

She added: "The addition of the 10 companies to Saspo raises the bar for corporate responsibility to the environment and puts the Singapore business community ahead of the region."

Mr Masagos Zulkifli, Minister for the Environment and Water Resources, who was guest of honour at Monday's Saspo event, said that with demand for palm oil projected to grow by another 50 per cent by 2020, sustainable production must take root in the industry.

"This underscores the significance of Saspo... Being the first of its kind, this industry-led initiative provides a platform for localised insights and shared resources for companies that source for sustainable palm oil," said Mr Masagos.

THE ENVIRONMENTAL HARM OF PALM OIL

The cultivation of oil palm in countries such as Indonesia has long been pointed out as a major contributor of air pollution in the region, due to drainage of carbon-rich peatland, deforestation and slash-and-burn tactics used by plantation companies and farmers to prepare land for crops.

But as palm oil is found in many products, from food items to cosmetics, banning it is a near impossible task.

Environmental groups are touting sustainable palm oil as an alternative. This refers to palm oil from plantations which adhere to strict standards set out by the Roundtable for Sustainable Palm Oil (RSPO). Among other things, certified plantations are not allowed to burn to clear land, and the rights of local communities must be respected.

Ms Zhang Wen of volunteer group the People's Movement to Stop Haze (PM.Haze) said that other important criteria under RSPO include not planting new crops on extensive areas of peat soil, maintaining water levels in existing plantations on peat, and conserving primary forests, as well as secondary forests, with high conservation value.

COSTS INVOLVED

Companies said the added costs of sourcing for sustainable palm oil were manageable, although an obstacle to more firms making the switch is a lack of awareness on the issue.

Dr Ng Wai Lek, founder of vegetarian company NomVNom, told ST that the price difference between sustainable and unsustainable palm oil is about $3 per tin.

Members of Saspo - such as TungLok Group, Wildlife Reserves Singapore and Commonwealth Capital - said during Monday's event that sustainable palm oil adds just less than 10 per cent to total operating costs.

 

Commonwealth Capital's group managing director Andrew Kwan said that there are audit costs involved, which can be reduced if more companies come on board and the use of sustainable palm oil is made the norm.

Businesses are also divided on whether or not to pass on the extra costs to consumers. Some, such as Veganburg and NomVNom, said they would not. "We strive to keep our food prices as reasonable as possible so we can make our sustainable and plant-based burgers accessible to everyone," said Veganburg's founder Alex Tan.

TungLok's chief executive Andrew Tjioe said it has not increased the selling price of its products even after using more expensive sustainable palm oil, although he suggested that consumers here would be willing to pay for sustainable products. "In the same way as people are willing to pay more for organic products... this (added cost) is not a problem in Singapore."

WWF's Ms Tan said that Saspo's 15 members, being prominent businesses in Singapore, could prompt smaller businesses to come on board. The alliance also plans to conduct outreach efforts to raise awareness of palm oil here.

HISTORY OF PALM OIL CAMPAIGNING IN SINGAPORE

The latest additions to Saspo follows a campaign launched by WWF last year pressuring firms here to use sustainable palm oil. WWF surveyed 27 Singapore firms from April to June using a global Palm Oil Buyers' Scorecard that the group does each year to track what companies are doing to prevent the negative impacts of palm oil production.

Among the 27 Singapore organisations contacted were Ayam Brand and Wildlife Reserves Singapore. Only 10 companies responded.

Following the release of the score card, four of the 17 companies which did not respond earlier - TungLok, Commonwealth Capital, Super Group and Bee Cheng Hiang - pledged that they would work towards using sustainable palm oil.

But there are some eateries flagged in the report that have yet to respond to WWF's latest call to switch to sustainable palm oil, including BreadTalk.

Mr Andrew Kwan, Commonwealth Capital's group managing director, said on Monday that his company was surprised by the results of the scorecard when it was first made public, citing the lack of awareness of sustainable palm oil in Singapore.

"The lack of awareness could have contributed to the poorer take-up rate... Events like these and the press could help get more industry players on board," he said. "In this regard, we count it a privilege to help raise awareness among consumers and (those) in the market on the importance of growing businesses sustainably," he said.

Correction note: The article has been updated for accuracy.