Tensions are still running high between Iceland and the palm oil industry, following the retailer's decision to axe palm oil from its own label products last year.

The move caused "unnecessary confusion" for consumers, according to the chief executive of the Roundtable for Sustainable Palm Oil (RSPO), who told BusinessGreen that Iceland's managing director Richard Walker did not consult the RSPO before making its palm oil pledge public.

Datuk Darrel Webber accused Walker of jetting in to Borneo in 2017 for three days and making a snap decision on palm oil use - a charge Iceland denies. Webber said he was not surprised Iceland's Christmas advert - which was went viral on social media after advertising body Clearcast refused to allow it to air on television last year - gained traction, but argued it served to "simplify a very complex story".  

"I was not surprised by the attention - because orangutans are a cute animal, and it had a nice story about the CEO [Richard Walker] who flew to Borneo in his jet to see the sad situation over there," he told BusinessGreen. "So it's a compelling story.

"But unfortunately, I find it a little bit sad. Because you simplify a very complex story. I've worked in palm oil for quite some time, and I still don't understand a lot of it. So someone who flies in for three days - I don't know if he can understand it, but has now caused, in my opinion, such a big problem."

Webber argued Iceland could have had a more significant impact on improving palm oil's supply chain by working with the RSPO. "You [Iceland] walked away from 500 tonnes of palm oil, and you made a point on YouTube," he said. "But in the grand scheme of things, what did it matter? Instead you could have leveraged that 500 tonnes to change the whole supply chain. That would have been a more responsible thing, I thought. So it was a missed opportunity for Mr Walker."

Palm oil plantations account for 10 per cent of permanent global cropland, and are thought to be responsible for the loss of 5.6 million hectares of forest between 1990 and 2008.

But some studies have suggested alternatives to the crop would require more land to produce the same volume of oil, and as such some commentators have argued that switching away from palm oil could only serve to drive up deforestation rates.

The RSPO has been working since 2004 to raise environmental and social standards in the palm oil industry via its voluntary certification scheme, which is focused on curbing deforestation and delivering wider sustainability benefits. It claims to have helped set aside hundreds of thousands of hectares of land for conservation, driven transparency in the sector, and "touched the lives" of more than 100,000 smallholders.

But its critics say its standards have failed in the past to take a tough enough stand against violations of its standards by members and has struggled to halt deforestation in areas where palm oil production is continuing to expand.

In response to Webber's comments, Iceland's Walker stressed the decision to remove palm oil was an attempt to drive higher standards from brands and the RSPO itself. He accused the industry of mounting a "smear campaign" against Iceland in response to its stance.

"It's interesting that so many comments from the industry, including its organised smear campaign, are so personal," he told BusinessGreen. "I didn't fly in on 'my jet' - I took a scheduled flight and met lots of people, including local communities, on the back of several years of research and discussions with campaigners."

"Iceland resigned its membership of the RSPO a few years ago but we continued with our policy of using certified and segregated palm oil in our own label food," he continued. "However, I was increasingly convinced that this approach was failing to prevent deforestation."

Walker said he promised to remove palm oil from Iceland-branded goods in the hope the RSPO would tighten its standards on deforestation and press brands to deliver on 2020 deforestation commitments.

"We had three options - to rejoin as one of 4,000 members of the RSPO with little leverage; to ask our 150 suppliers to use the limited POIG supply chain - which was technically impossible; or to make a strong statement to the industry," he explained. "We always made it clear we were removing palm oil until a truly sustainable supply was available on the mass market, and never used the words ban or boycott."

The RSPO has strengthened a number of its policies and enforcement mechanisms in recent years and in November 2018, following consultation with its stakeholders, the group adopted a zero deforestation policy for all its members, applicable to virgin and secondary forests.

"We are pleased to have added our voice to the action that saw such positive moves by the RSPO and Wilmar at the end of last year," Walker said, adding that "we are not against palm oil - we are against deforestation."

The exchange is only the latest flare up in months of bubbling tensions within the sector over Iceland and others' arguing for a hiatus in palm oil use until it can boost its sustainability credentials. 

In November Teresa Kok, minister of primary industries in Malaysia - whose remit covers palm oil - accused Iceland of "shamelessly assuming a combative stance" against the ingredient. 

Meanwhile, over the weekend the EU and Malayisa looked to be engaged in the latest phase of a long-running diplomatic row over the Union's decision to phase out the use of palm oil for biofuels in the bloc. Malaysia warned retaliatory actions against European exports would be likely if the EU pressed ahead with the new rules.

At the same time, Iceland reportedly found that fully phasing out the use of palm oil across its own brand products was more challenging than first expected with a BBC investigation alleging that the company missed an end of 2018 deadline for stopping the use of the ingredient. 

On the company's website it said "no Iceland own label products containing palm oil as an ingredient have been manufactured since last year. We have 100 per cent achieved our goal".

But it added that there were 17 frozen, chilled and ambient Iceland own label products which have proven exceptionally difficult to reformulate. "We have taken the Iceland own label off those products on a temporary basis," the company said. "They will be back on sale under our Iceland own label by April 2019."