Supermarkets' accountability pertaining to palm oil use: an Australian study

This thesis addresses the issue of supermarkets' accountability pertaining to palm oil used within their private-label products. Specifically, it investigates whether the public disclosures being made by Australian supermarkets enables interested stakeholders to assess whether the palm oil being used is being sourced from sustainable plantations.

Chapter 1 provides an overview of the research, identifies motivations for the research and presents the contributions from the research. Chapter 2 starts by discussing the use of palm oil and how it is a very widely used ingredient in a vast multitude of products. The rapid growth of oil palm plantations will be discussed together with a discussion of the many adverse social and environmental impacts (as well as some of the positive social impacts) that have accrued as a result of the proliferation of oil palm plantations. Initiatives created to provide sustainable sources of palm oil will also be explored; and it will be shown that business organisations that use palm oil in their products do have a realistic choice between using sustainable and non-sustainable palm oil.

In addressing the issue of `accountability' for the palm oil used within products being sold, and because of the many different ways in which the idea of `accountability' can be interpreted, Chapter 3 (Phase 1 of the research) addresses the issue of accountability in depth and at a general level, and not specifically as it relates to palm oil accountability. As will be demonstrated, `accountability' itself is a normative concept and one that is based upon personal values and judgements. That is, the accountability expected of an organisation by different stakeholders will not be the same, and the expectations will also tend to change across time. Chapter 3 will propose an accountability model that is then utilised within the following chapters of the thesis.

Chapter 3 identifies highly cited definitions of accountability from a variety of academic disciplines, as well as definitions from the accounting profession and dictionaries. What will be shown is that the various definitions of `accountability' generally have much in common, but the application of the various definitions can create vastly different prescriptions for accountability (and for accounting) depending upon the various judgements being made by those prescribing or assessing organisational accountability. Individuals' own world views will influence what accountability is expected. Chapter 3 will provide and discuss a sequence of steps that arguably are followed in the process of determining what accountability should be demonstrated, and for assessing the accountability that has been demonstrated. A `model of accountability' is presented that highlights the steps, and these steps can be summarised in terms of judgements, or decisions, about:
(1) why accountability should be demonstrated?
(2) to whom should accountability be demonstrated?
(3) for what aspects of performance should accountability be demonstrated? 
(4) how (or where) should the accountability be demonstrated?

Chapter 3 will explain the sequential nature of these decisions and how judgements made in terms of one question will then likely impact the judgements made in the decisions that follow.

Having proposed an `accountability model' in Chapter 3 that will then be applied in the research that follows, Chapter 4 (Phase 2 of the research) will then investigate and evaluate the accountability being demonstrated by Australian supermarkets in relation to the use of palm oil in their products. Any assessment of accountability is necessarily normative and therefore there are no prescriptions that can be made that will be in accord with the expectations or values of all people. Accordingly, in assessing the accountability of Australian supermarkets, the Accountability Model proposed in Chapter 3 will be utilised to explain the basis of the disclosures the supermarkets should be making. That is, Chapter 4 will explain how the judgements made (by the researcher in terms of the issues of why? to whom? what? and how? information shall be disclosed) led to prescribed lists of assessment criteria on what and how accountability pertaining to palm oil use should be demonstrated by Australian supermarkets

Central to the analysis is the belief (based on scientific evidence and the application of the accountability model) that oil palm forest proliferation has had many negative environmental impacts. Hence organisations, such as supermarkets, owe an accountability to interested stakeholders in terms of efforts undertaken (or not) to ensure the use of sustainable palm oil in the products they produce.

In developing the lists of expected/prescribed assessment criteria, the study relies upon work undertaken by various interest groups who have a specific focus upon reducing the environmental impacts from palm oil use. Such organisations provided lists of governance policies they would expect to see in place in organisations that use palm oil in the products they produce. The study synthesised these lists to generate: a prescribed disclosure index on what "accounts" supermarkets should provide; and a list of prescribed disclosure avenues on how (or where) the supermarkets should provide the "accounts".

This is done on the basis that if various `expert' organisations have identified particular governance policies/procedures they expected to see in place, then an organisation should provide information (disclosures) about whether such policies were (or, were not) in place so as to enable interested stakeholders to assess the degree to which an organisation is accepting a responsibility (and an accountability) in relation to palm oil use. In developing the assessment criteria, the study relies upon NGOs and other interested stakeholders' perspectives in a manner that is consistent with the idea of `surrogate accountability' (see Rubenstein 2007).

Whilst Chapter 4 embraced a normative perspective in which the study assesses the disclosures being made by Australian supermarkets against a list of expected/desired disclosures, Chapter 5 and 6 (Phase 3 of the research) embraces a positive perspective in which the study seeks to explain Australian supermarkets' current disclosures, and changes in disclosures across time. Adopting a joint consideration of stakeholder theory, legitimacy theory and institutional theory, this study explains why the disclosures being made by the supermarkets deviate from what the study construed as being appropriate to demonstrate a sound level of accountability (with the `appropriate levels' of disclosure are being determined using the accountability model embraced within this thesis). With the results in mind, the study will identify a number of practical initiatives that the researcher believes could be developed to improve the accountability of Australian supermarkets with respect to the use of palm oil within their `home brand' products.