Big job ahead for sustainable palm oil group

Palm oil sustainability
The demand for palm oil will only get bigger, so the industry needs to become more sustainable fast. Image: Bremen Yong, RSPO

A greener palm oil industry has become an imperative given that worldwide demand for the commodity is set to spike in the years ahead, said industry players and policymakers in Singapore on Wednesday.

Speaking at the opening of the 10th annual roundtable meeting on sustainable palm oil, Singapore Deputy Prime Minister and Minister for Finance, Tharman Shanmugaratnam, said that as the world’s highest yielding oil crop, oil palm was gaining “widespread adoption in favour of other crops” for use as food and biofuel.

The Roundtable for Sustainable Palm Oil (RSPO) is an industry-led multi-sector initiative that aims to make palm oil production and consumption more sustainable. The not-for-profit has signed on nearly 900 members – which include growers, processors, traders, manufacturers, retailers, NGOs and financial institutions - since non-government organization WWF conceived of the idea in 2001.

Oil palm plantations produce five to 10 times more oil per hectare than other edible oil crops, but they have been widely acknowledged as a significant driver of deforestation and its related environmental and social problems.

Eliminating palm oil production is not viable, said Mr Shanmugaratnam, explaining that it would increase take up of less efficient oil crops and possibly lead to additional environmental problems.

With global demand for palm oil growing rapidly - analysts predict that global demand for palm oil will double from its 2001 levels to over 40 million tonnes each year by 2020 – finding sustainable ways to produce and source the commodity will be key, he noted.

The RSPO, with its systematic approach to improving industry practices and involving all related sectors, remains the “most suitable platform for all stakeholders to work together to tackle the environmental and social challenges surrounding palm oil production”, he said.

Such challenges include greenhouse gas and haze emissions from deforestation, land-use conflicts, loss of biodiversity, indigenous rights violations, pollution of waterways and the disruption of eco-systems.

RSPO’s certification, which provides a uniform global assessment standard and ensures integrity in the trading process, has come a long way – but there is still a long way to go, he added.

He encouraged RSPO to “intensify its work with buyers and consumers” to improve the market for certified sustainable palm oil, and noted that “all of us have a role to play” in creating a more sustainable industry.

Singapore has a substantial role despite having no growers or processors, because its close proximity to the world’s largest exporters – Indonesia and Malaysia – has turned the Republic into an active trading hub for palm oil. About 20 trading companies are based in Singapore.

That role has room for growth, say some.

Singapore’s Ambassador-at-Large from the Ministry of Foreign Affairs, Professor Tommy Koh, said he was disappointed that none of Singapore’s banks were among the financial institutions that had become members of the RSPO and encouraged the banks to consider joining the effort.

The participation of the finance industry, along with other related sectors that together are responsible for the entire oil palm supply chain from growing to consumption, is one of three factors needed for the RSPO to succeed over the next ten years, said Professor Koh.

The other success factors that will help the RSPO succeed are cooperation between the industry and the environmental movement and the RSPO’s pragmatic, step-by-step approach to certification, he added.

He noted that in the first 10 years the industry had managed to certify 1.5 million hectares of palm oil plantations that collectively produce nearly 7.7 million tonnes of certified sustainable palm oil (CSPO). This indicates “very significant and substantial progress”, he said.

However, CSPO production represents only 14 per cent of global palm oil output.

“I hope that when we meet again in 10 years’ time, the whole or nearly whole of the global production would have come under RSPO’s certification,” he added.

“It will take a gigantic effort to raise the bar but, with determination, I am confident that it can be done,” said Professor Koh.

Over 800 industry professionals, NGO representatives, policymakers, academics and scientists are attending the three-day meeting at the Resorts World Convention Centre to discuss the RSPO’s progress and tasks ahead. This year’s meeting features a review - undertaken every five years - of the RSPO’s principles and criteria, which will be voted on at the end of Thursday’s sessions.

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