Why traceability is important
Traceability is a key tool for increasing transparency in supply chains. We view traceability as a means to an end, not the end in itself. We map our supply chain in order to:
- Better understand our sourcing areas and where suppliers operate.
- Assess the risk of unsustainable practices associated with palm oil production – such as deforestation, peatland clearance and fires – enabling us to prioritize engagement.
- Monitor deforestation, fires and land development to mitigate risk, demonstrate compliance with NDPE requirements and inform our interventions related to noncompliance.
Our approach to meeting traceability goals
Cargill’s goal is to have all palm oil volumes we produce, trade (ship and physically handle) and process traceable to plantations in high-risk supply chains by 2020. Our own plantations and mills in Indonesia are fully traceable, but most of the palm oil we trade and process comes from third-party refiners, aggregators or mills. We achieved full traceability to the mill level in 2015 and continue making progress in traceability to the plantation level.
Our strategies for achieving our traceability-to-plantation goal are based on the following factors:
- Traceability to plantations is a resource-intensive process, so Cargill prioritizes the collection of data in high-priority landscapes where the risk of noncompliance is greater.
- We focus on collecting traceability-to-plantation data in origins where we buy directly from mills (primarily in Malaysia and Latin America, where most of our volume comes from Brazil, Colombia and Guatemala).
- For indirect purchases from traders and refiners, we request plantation-level information from our direct counterparts and support them to collect this data over time.
- We collect data using a risk-calibrated approach. This approach is based on the principle that NDPE-related risks vary among production regions and more detailed data is needed on plantation locations where risk is higher than where it is low. For high-risk areas, palm production should be traceable to the individual production unit (e.g., the farm); for low-risk areas, palm can be traceable to the level of a village or municipality.
- The risk-calibrated approach is based on defining high-risk land and mill locations as areas with forest, uncultivated peat and protected areas including a 1 kilometer buffer.
- In all cases, we encourage our suppliers to disclose concession boundary maps to improve tracking, monitoring and responding to deforestation or other non-compliance and grievances in our supply base.
Measuring our performance
We measure our transparency progress against the following key performance indicators:
- 100% traceability to the plantation level in high-priority landscapes