Palm oil conference delegates call for sustainability action from governments, buyers, and producers

Delegates meeting at the Roundtable on Sustainable Palm Oil (RSPO) annual gathering in the Malaysian capital Kuala Lumpur have called on governments to do more to ensure that forests are protected from oil palm expansion.

The RSPO gathering brought together some 800 delegates from 30 countries. Oil palm growers, palm oil processors, traders and buyers, and NGOs met to discuss subjects ranging from complaints and compensation procedures to the use of satellite and drone data for High Carbon Stock (HCS) assessment.

In the past 25 years, the total plantation area of oil palm has tripled, with current global estimates of more than 15 million hectares. According to the United Nations Environment Programme (UNEP), oil palm plantations are the leading cause of rainforest destruction in Indonesia and Malaysia, who together produce close to 90 percent of the world’s palm oil.

Alain Rival from the French research centre CIRAD says governments need to transform the standards established by certification organisations into laws, and make those laws applicable.

“Now that the principles and criteria have been around for a couple of years, and are improving all the time, it’s time to bring the governments in,” said Rival, who has co-authored a book about palm oil, ‘Palms of controversies: oil palm and development challenges’. “It’s time,” Rival said, “for these principles and criteria to become laws in each country, and for there to be proper enforcement.”

It’s governments – whether locally, regionally, or nationally – who give permission for forests to be cut down, and concessions to be established, Rival points out. “It’s good to have a push-pull system between the customers and the NGOs and the companies, but, at the end of the day, it’s the governments who are the decision makers. It’s the governments who bring in the laws, and enforce them.”

Rival senses that the recent merging of Indonesia’s forestry and environment ministries by the new president Joko Widodo could be a positive move. “From our point of view as researchers, it has been difficult to get people from different ministries and departments around the same table. We are hoping that this bigger, more inclusive ministry will work out to be a good thing.”

The director-general of the Forest Stewardship Council (FSC), Kim Carstensen, also says governments need to be part of the sustainability process. Speaking during a debate entitled “Sustainability – What’s Next?”, he said the FSC was born out of frustration with the lack of government effort on environmental issues, particularly at international level.

“This is still the case overall on most of the big issues. Governments are not where they should be, but at national, provincial and local levels, they are increasingly getting there.”

Government, Carstensen says, has to be part of the solution. There was no way that certification schemes could solve such problems and challenges as deforestation or achieving a sustainable future for Africa on their own. “We provide a set of tools that can be used, and are increasingly being used, but we need to find new ways to have a conversation with governments about how to deal with the wider issues.”

The secretary-general of the RSPO Darrel Webber said a “happy, unintended consequence of the RSPO” was that it had inspired governments to come up with their own standards.

P1090667Darrel Webber

Sceptics would say, however, that those standards – the new MSPO¹ in Malaysia and the ISPO² in Indonesia – are not effective tools for protecting forests. The voluntary RSPO system is itself much-maligned and the organisation has been criticised for moving too slowly, and being too soft on rogue members.

Talking about Africa, Webber said the RSPO could inspire governments there to help ensure that there was responsible development of palm oil.

He said great care had to be taken in the development of palm oil production in Africa. “We have to be really cautious in the way we move forward. Everybody knows that Africa is in need of socio-economic development, but everybody also knows that it is important in terms of bio-diversity and all the global services that it provides.

“We must make sure that we do not exhaust these natural resources just for the sake of one crop. I think the RSPO has a framework that can inspire governments; that can inspire international government agencies to help us make sure that this commodity develops in a truly sustainable way in Africa.”

The executive director of the Sustainable Agriculture Network (SAN), Andre de Freitas, said: “What we haven’t done yet is use the convening power of our systems to engage with governments. If you think about all the industry, the civil society, and the social movements that are involved in our systems, we would have a huge platform to talk to governments and we haven’t done that.”

Both the executive director of the UTZ Certified sustainability programme, Han de Groot, and the programme coordinator for the Great Apes Survival Partnership, Douglas Cress, think governments may be jealous of the dialogue and processes that are occurring outside of their remit.

“There’s a fluidity to this process,” said Cress, who also works with the United Nations Environment Programme, “and there’s a speed that neither governments nor the UN could possibly match.

“I do believe that all governments, even the best governments, have their own self interests at heart; they want to keep their jobs. This market has the ability to move governments because a market and consumer demand can force change.”

Producer frustrations

During a debate about traceability, the commercial and sustainability director of the Agropalma Group in Brazil, Marcello Brito, highlighted the problem of buyers not purchasing the segregated oil he produces.

P1090649Marcello Brito

Agropalma is a founding member of the Palm Oil Innovation Group (POIG), which was set up in June 2013. The group describes its focus as “environmental responsibility, partnerships with communities, and corporate and product integrity” and says the RSPO principles and standards are inadequate.

Brito says there is not enough segregated palm oil available to meet the entire global demand, but there is enough for all of Europe, the United States, and many more countries. “We suppliers are ready. Why are our buyers never ready? I think it’s because they are afraid; they are afraid they will not have enough suppliers or will be in the hands of just a small number of suppliers and have to pay a little bit more.”

Because of the lack of buyers willing to pay the premium for Certified Sustainable Palm Oil (CSPO), 49 percent of it is being sold as conventional oil or what is being termed “sustainable biofuel”.

Many buyers prefer not to even attempt to purchase physically traceable oil, but instead opt for GreenPalm certificates because this works out cheaper and the purchasers can still say they are buying sustainable oil.

Under the book-and-claim system, RSPO-certified palm oil producers are awarded one GreenPalm certificate for each tonne of palm oil that has been sustainably produced. They can put the certificates up for sale on the GreenPalm web-based trading platform then manufacturers or retailers can bid for and buy the certificates on line. Companies can then state that they have supported the sustainable production of palm oil, but there is no guarantee that all of their palm oil comes from sustainable sources.

GreenPalm is a highly controversial subject. There are those who say the system is a disgrace and should be done away with, but others say the certificates are helping to increase the amount of sustainable oil on the market.

Of the 49 percent of Certified Sustainable Palm Oil not sold as CSPO,‎ a large volume is sold as “sustainable biofuel”, using the additional International Sustainability and Carbon Certification (ISCC). Unlike CSPO, these volumes are not traced in a central database, so it is not known how much is being sold.

Malaysia, Brito says, is the world’s second biggest producer of segregated palm oil. “Why are those multinationals not using segregated palm oil in Malaysia. And Indonesia is the number one producer. Why aren’t they using it there? It’s all going abroad. Why is Unilever not producing segregated palm oil margarine in Indonesia?

“The segregated oil is only going where there is pressure from NGOs or consumers. They are not producing segregated oil it because it is the right thing to do. They are doing it because it is a business pressure.”

Brito says he is frustrated by the situation. “All the burden came on top of us from the beginning, and we moved; and we moved fast. Today we are ready to supply more than 18 million tonnes of certified palm oil to the market, but unfortunately we don’t have the procurement.”

He recently asked one multinational why Agropalma was asked to produce segregated oil in Brazil for export to Europe when the multinational wasn’t using the segregated oil in its facilities in Brazil as well. “Do we have a first-class consumer in Europe, the US and Japan, a second-class consumer in some countries in Latin America, and then the others – in India, China, and Africa?

“The response is always the same: the companies say they have time-bound plans from now up to 2020 and soon – whatever this means – they will be using segregated palm oil all over the world.”

Brito has little faith in such deadlines and says they can be easily shifted forward. He cites the French cosmetics and beauty company L’Oréal, whose commitment to no-deforestation has a 2030 deadline. “The volume of palm oil and palm kernel oil they use is so small, I wonder why they need another 16 years to commit to that.”

The sustainable sourcing director for Unilever, Cherie Tan, said the situation was very complex for buyers using derivatives and not crude oil. The industry, she said, needed to work with suppliers to ensure that products and derivatives are segregated when buyers receive them.

Brito says buyers should be paying a lower price to non-sustainable producers. “This is the way those producers will understand that they have to move – because money talks. This would change the market completely.”

It is the obligation of RSPO members, Brito says, to look at the organisation’s infrastructure and try to reduce the certification bureaucracy. The RSPO, he adds, is not the end of the process. “It’s just the train that we are taking. We cannot expect everything from the RSPO; we have to expect more from our stakeholders, and from the NGOs and consumer groups to put on the pressure in the right places.” This, Brito says, could speed up what the RSPO is doing.

The senior vice-president of the Rainforest Alliance, Richard Donovan, says the RSPO has not solved the problem of members who have minimum engagement: “The challenge that the certification systems have today is that people who are not the leaders will engage at the lowest level that gains them entry and, unless there are incentives in the system for them to move up the ladder, they may not move up the ladder. I don’t think any certification system has completely solved this yet.”

The Rainforest Alliance has its own certification system. According to the standards set by the SAN, a plantation can be certified by the Rainforest Alliance if no deforestation has occurred on it since November 2005. The alliance also demands that all damage since November 1999 is mitigated through reforestation, ecological preserves, and biodiversity offsets.

Donovan said he was encouraged to see the wide range of discussion at this year’s roundtable meeting. Delegates from the FSC, the SAN, and UTZ Certified were involved in the debate about certification systems. It was to the RSPO’s credit, Donovan said, that the discussion encompassed different systems in seeking a way forward for certification. “That is not something that we have seen before at the RSPO. There has been a positive shift.”

One of the invited speakers was the award-winning Canadian scientist, environmentalist, and broadcaster David Suzuki, who spoke about the challenge of achieving a balance between economic development and conservation.

RSPO weaknesses

Laurel Sutherlin from the Rainforest Action Network says the RSPO can be a wonderful tool, and should be stronger in its standards and enforcement, “but it’s never going to take the place of a company’s own responsibility”.

Some would argue that, with company pledges multiplying at such a rapid rate, it is now time to go beyond certification. “There is no question that the RSPO has to catch up to stay relevant,” Sutherlin said. “The standards need to be more robust, especially in the areas of carbon pollution and labour issues, and they need to be enforceable. One of the RSPO’s most promising features – its complaints resolution system – has a spotty track record.”

The RSPO could show it has more teeth, Sutherlin says, but this is a matter of will. “There has historically been a disproportionate influence by the companies within the RSPO and that’s not going to work.”

The weakness of the RSPO complaints procedure was highlighted by Adelbert Gangai and George Baure, who travelled to the RSPO to speak on behalf of the tribes of Collingwood Bay in Papua New Guinea.

Gangai and Baure came to KL to protest over the lack of resolution of a complaint about the palm oil company KLK, which was filed with the RSPO more than a year and a half ago.

“The land KLK intends to develop is roughly 85 percent primary forest,” Gangai and Baure said in a statement. “Our people have repeatedly and unequivocally declared our united opposition to any foreign palm oil development on our land. With the strength of the national laws of Papua New Guinea behind us, we have stated in the strongest of possible terms that neither KLK nor its agents have permission to enter Collingwood Bay without our express consent.

“There is no way that KLK can develop this parcel of land while obeying the standards of the RSPO, yet the company continues to keep land-clearing machinery on site in Collingwood Bay, and has expressed no intention of leaving our land.”

Momentum gathers, but crisis continues.

Laurel Sutherlin says that, with huge companies like Wilmar and GAR making lofty sustainability commitments, a new benchmark has been set for what is acceptable. “There has been a remarkable accomplishment over the past 18 months. A corner has been turned and there is momentum, but we now need to see how earnestly such pledges will be implemented. There are still many companies, including Pepsi, who need to change their policies.”

Over the past few decades, Indonesia has seen the conversion of more than five million hectares of primary forest to oil palm cultivation, and Malaysia more than four million.

Sutherlin says there is still a major distance to go yet in the battle to save the forests and protect those working on oil palm plantations. “The scale of the crisis is so extreme – the millions of acres that have already been lost and the millions of workers who are suffering under unacceptable conditions – that there really needs to be a true transformation from the ground up.”

2011-12-21T084224Z_01_JAK01_RTRIDSP_3_INDONESIADeforestation in Indonesia; photo by Roni Bintang.

1) The Malaysian Sustainable Palm Oil standard is due to be launched in January 2015. It is a voluntary standard that is considerably weaker than the RSPO principles and criteria. It may later become mandatory in stages. The government says the standard’s principles and criteria have been finalised and field trials have been completed.

2) The ISPO is a mandatory national sustainability scheme introduced in 2011. It is based on Indonesian national laws and regulations. All palm oil companies and planters in Indonesia must comply with the ISPO rules by December 2014. Companies not in compliance by the deadline will have their plantation class downgraded. There are 98 indicators which elaborate seven sustainability principles and criteria. The Indonesian Palm Oil Council and the Indonesian Palm Oil Producers Association have called for the deadline to be extended. By the beginning of 2014, only 40 palm oil companies had secured ISPO certification.

This article was updated on 29/11/2014.