New Palm Oil Innovation Group set to address haze issue

New group from the Consumer Goods Forum say they are more nimble than RSPO, sets out clearer guidance on growing sustainable palm oil. Greenpeace, WWF, Golden-Agri among handful of founding members

Several environmental organizations and palm oil producers calling themselves the Palm Oil Innovation Group   announced on Friday that they were committed to a set of standards to reduce deforestation that go beyond the requirements of another major industry-led association, the Roundtable on Sustainable Palm Oil, or RSPO.

Unveiled on the sidelines of a meeting of the Tropical Forest Alliance, a coalition of government leaders and companies from the Consumer Goods Forum, the innovation group (POIG) will determine production standards that will help the alliance meet the ambitious goal of eliminating deforestation from the production of soybeans, palm oil, beef and pulp and paper by 2020.

The eight initial members are social and environmental non-profits Greenpeace, Rainforest Action Network, the World Wildlife Fund and the Forest Peoples Programme; while Daabon Organic from Colombia, New Britain Palm Oil, Agropalma and Indonesia-based Golden Agri-Resources represent the producer side.

The RSPO is a very big beast and it’s a multi-stake holder process that involves consensus…That is not always the right vehicle for getting the most aggressive change possible.

Lindsey Allen

Together, they say they are promoting innovation in the palm oil industry by highlighting how companies can reduce deforestation while maintaining revenues. And they hope rising pressure from consumers who do not want products linked to forest loss will drive other producers to join them.

“It offers companies the opportunity to innovate, establish boundaries and raise the bar,” said David McLaughlin, the managing director and vice president of agriculture at the US-based World Wildlife Fund.

The grouping’s announcement came as forest fires tore across much of central Sumatra last week, blanketing Indonesia, Singapore and Malaysia in the worst haze in the region’s history and sending air pollution to record-setting hazardous levels.

The fires have turned a spotlight on an industry with a reputation for illegal land clearing, habitat destruction and conflicts with communities that allege companies have taken their land without their consent.

RSPO was formed in 2004 to address those issues, but critics say it has not gone far enough, in part because producers often resist aggressive conservation standards proposed by green groups.

During a meeting in April, for instance, they voted down changes to the criteria under which companies achieve RSPO certification that would have required them to measure their CO2 emissions with the goal of working toward reduction.

“The RSPO is a very big beast and it’s a multi-stake holder process that involves consensus,” said Lindsey Allen, acting executive director at the Rainforest Action Network. “That is not always the right vehicle for getting the most aggressive change possible.”

Participation in both the RSPO and the POIG is voluntary, but members of the new grouping say by building beyond the standards set out by the Roundtable, they are starting a conversation about the urgent need for action.

“Instead of starting from a place of asking what’s possible, we’re asking what’s needed,” said Allen. “And what’s needed is to stop the human rights violations, give communities their rights and respect them, and minimize the environmental damage from this sector.”

With only a handful of participants, the POIG is a fraction of the size of the RSPO, which includes more than 1,000 members. But Allen says the small and nimble group can set more ambitious goals and hopes to work toward them more quickly.

Unlike the RSPO, it also sets out clearer guidance on how customary lands are recognized. It requires companies to reserve enough land for local communities to continue growing crops, account for their greenhouse gas emissions and not clear peat swamps, which serve as major carbon sinks.

Studies show that around 17 percent of all the palm oil produced in Indonesia is done on peat, a swampy soil that releases huge amounts of climate-changing carbon when upended. As a result, palm oil production accounts for nearly two-thirds of Indonesia’s carbon emissions, which are estimated to be the world’s third largest. Under Indonesian law, companies can exploit peat as long as it is less than three meters deep.

Members of the POIG say the carbon accountability measure is key to setting it apart from RSPO. They’ve also called on companies to establish mechanisms so they can trace the origins of their palm oil. As the recent fires have indicated, attaching responsibility to companies for deforestation becomes difficult as you move down the supply chain, since many producers work with contractors and smallholders who take the blame when land is cleared by burning.

With only a handful of participants, the POIG is a fraction of the size of the RSPO, which includes more than 1,000 members. But   the small and nimble group can set more ambitious goals and hopes to work toward them more quickly.

For a company to manage its carbon footprint, it has to manage its supply chain, says Pavan Sukhdev, an environmental advisor and founder of Mumbai-based Green Initiatives for a Sustainable Tomorrow, which looks at how ecosystems and biodiversity can be monetized to add value to forest loss.

Some companies have started down this path. Unilever, a major buyer of palm oil, has committed to complete traceability in its supply chain by 2020. Golden Agri-Resources, a member of the POIG, and Asia Pulp and Paper (APP) – both subsidiaries of the Sinar Mas Group – have committed to stop clearing natural forests across their supply chains.

In recent days, however, APP has fought allegations that fires had started within its suppliers’ concessions, saying it has enforced a no burn policy since 1996. Company officials say they are currently conducting investigations into the source of the fires, though it is believed they spread onto APP’s plantations from boundary areas, where farmers started them.

“This is a wake up call for the private sector and the government,” Aida Greenbury, APP’s head of sustainability, told Eco-Business. She said the company planned to focus more on landscape management and work with the surrounding community to achieve its zero deforestation target.”

“A three pronged approach is needed to protect the integrity of our forests; a zero burning policy, zero deforestation policy and cross-sector landscape management,” added Greenbury.

Although the fires have abated some, the WWF on Friday renewed its call for companies to enforce zero-burn policies. That message followed a report by a group of environmental organizations that links fire hotspots to concession areas using satellite data.

According to the report by non-profi Eyes on the Forest, nearly 40 percent of the more than 8,000 hotspots mapped in Riau province, where the fires have been fiercest, were burning inside large-scale pulp and paper or palm oil concessions.  

Hotspot analysis has also revealed that hundreds of hotspots are burning inside the Tesso Nilo National Park, indicating that illegal encroachment by palm oil producers, which WWF outlines in a separate report, has continued.

Environmental activists say the satellite data can help pinpoint the sources of the fires and could be used to prosecute companies found to have violated a 2009 law against slash-and-burn land clearing.

In the meantime, enforcing no-burn laws is key, say scientists.

“There’s nothing unusual about the fact that corporations will seek the cheapest most effective means of earning revenue. That’s why enforcement needs to be taken seriously,” said Peter Kanowski, the deputy director of the Center for International Forestry Research in Bogor.

He says a lot of blame so far has been directed at smallholders, but they are not really the problem. “The problem is large-scale conversion of peatland to plantation.”

The Indonesian government is currently investigating eight companies accused of starting fires within their concessions, and the outcome of those investigations could serve as a warning to others.

Knowing groups like Eyes on the Forest and the WWF are watching is also likely to make companies think twice before clear cutting forests. But environmental groups say companies should also take responsibility for the surrounding environment, particularly if they want to avoid future conflicts and controversies that could drive away buyers.

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