10 Jul 2018 --- Louis Dreyfus, the global merchant firm involved in agriculture and food processing, notes that the soy industry is now growing so rapidly that managing its supply chain sustainably is becoming “increasingly urgent.” That’s why it has just launched a new policy geared towards protecting biodiversity, preserving natural resources and habitats while also generating a fair wage for farmers.
As the second most widely used oil in the world, global production of soybean oil is predicted to grow significantly to provide edible oil and livestock protein feed. Its use is also boosted by the biofuel sector which uses the crop to produce an alternative to fossil energy. But soy production comes with other types of costs, namely for the environment and local communities.
Some of the main soybean production areas include Uruguay, Bolivia, Paraguay, Argentina, Ukraine, India, China and Canada.
Louis Dreyfus Company (LDC) is working with its partners across the supply chain to minimize adverse impacts and help the industry to grow sustainably. The challenge is to generate income for farmers and the industry, providing employment and valuable earnings, but also protect biodiversity and preserve ecologically valuable natural resources and habitats.
“As a leader in agribusiness, LDC has a key role to play in addressing this challenge,” said Gonzalo Ramírez Martiarena, CEO at LDC.
LDC’s new Soy Sustainability Policy sets out the company’s intentions with regards to human rights, its environmental impact, worker practices and anti-bribery and corruption in relation to soy production. LDC’s policy also underlines its commitment to comply with the eight fundamental conventions of the International Labor Organization (ILO), the United Nations agency dealing with labor problems, particularly international labor standards and social protection.
LDC says it’s focused on collaboration because government, business and civil society all have a stake in these issues as do farmers, business partners and LDC’s customers.
“We really believe that working together towards [these] goals is most important. Because just as we all face the same challenges, we can only address them if we work together,” added Ramírez Martiarena.
Through this policy, LDC commits to:
- Influence and engage with stakeholders to eliminate deforestation throughout its supply chain and conserve ecologically valuable biomes, aiming to discourage and eliminate conversion of native vegetation.
- Uphold the rights of local communities and/or indigenous people.
- Comply with all eight fundamental conventions of the International Labour Organization (ILO).
- Respect protected areas, national and international
- Not endanger species classified as threatened, nationally or internationally
- Abide by rigorous anti-corruption and anti-bribery standards.
As with palm oil, soybean oil is often in the spotlight for the wrong reasons. Namely, it’s adverse environmental impact and corruption problems commonly associated with the supply chain.
LDC’s move to strengthen its sustainability of soybean oil comes at a time of greater consumer awareness about exactly what ingredients goes into food. It also comes when watchdogs and environmental campaigners are paying close attention to the moves of big companies that dominate supply chains and calling them out on environmental and other issues.
In May 2018, Brazilian authorities fined five-grain trading houses, including Cargill Inc. and Bunge Ltd., as well as dozens of farmers, a total of US$29 million for activities connected to illegal deforestation.
IBAMA is Brazilian Institute of the Environment and Renewable Natural Resources, the Brazilian Ministry of the Environment's administrative arm imposed the fines.
In June, Cargill introduced a soybean oil made from identity-preserved, conventionally-bred soybeans for customers interested in exploring a non-GMO claim on their product label. The oil is refined in Cargill's Des Moines, Iowa, plant in a process certified by SGS, a global inspection, verification, testing and certification company.
And just last week, ADM and Cargill completed the agreement for their soybean joint venture in Egypt, after receiving all relevant pre-closing regulatory clearance and formally launched SoyVen, their new project to provide soybean meal and oil for customers in Egypt.
André Roth, Senior Head of Oilseeds & Value Chain Platforms at LDC, outlined how LDC’s new policy addresses the challenge to produce enough food for a rapidly growing global population while protecting the society and environment in which we all live.
“The challenge is to use limited resources efficiently and responsibly – this is part of our day-to-day, and as any business will tell you, doing so successfully is a clear indicator of strong performance,” said André. “In this sense, preserving increasingly scarce resources – including land, water and forests – is not just a matter of sustainability – it makes business sense, and it makes common sense.”
By Gaynor Selby
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