Sabah, the producer of 12 per cent of the global palm oil supply, is considering the possibility of producing only Certified Sustainable Palm Oil (CSPO) by 2025.
This proposal will be presented to the State Government for consideration and to weigh the costs and benefits of such an outcome.
Certification in accordance with an internationally recognized standard such as that of the Roundtable on Sustainable Palm Oil (RSPO), will see palm oil and all palm derivatives in Sabah produced in a legal, ecologically sustainable and socially acceptable manner.
Not only will this reassure global markets about how this oil is sourced from a state known for its biodiversity, tapestry of indigenous cultures and diverse landscapes, it will also provide new long-term opportunities for the state’s producers to access premium markets worldwide, grow local manufacturing and attain a competitive edge.
This proposal comes after months of cross-sector conversation about a jurisdictional or state-wide certification, focused around the benefits and practical ways to overcome the challenges including for smallholders and independent farmers who normally find it difficult to secure international standard certification.
Sabah is now laying the groundwork to asses all possibilities, by bringing together all stakeholders – government, industry, civil society and communities – to coalesce and collaborate around a set of principles and criteria that promote best practices, greater efficiency and transparency.
Sabah Forestry Department Director, Datuk Sam Mannan said as a responsible government, looking at the horizon and considering the significance of palm oil income to the state, Sabah needs to strategize and act now to build resilience and ensure its main industry remains relevant in the future and highly competitive. The Sabah Forestry Department indirectly, owns about 100,000 hectares of planted oil palm plantations.
“Both global demand and downstream industries will increasingly pull the supply chain for Certified Sustainable Palm Oil and Sabah must act to be ahead of the curve.” With time, large competitors will inevitably outpace Sabah’s total output of palm oil but with certification, Sabah can build itself as a niche producer of a branded good – i.e. certified palm oil, and compete on the basis of governance and not size.”
“The palm oil sector features large in our landscape and plays a major role both economically and ecologically. Jurisdictional certification will also draw bright lines to protect forest reserves, wildlife corridors, High Conservation Value Forests, riparian reserves and improve connectivity in a more coherent manner,” Mannan said.
Oil palm income has now financed forest conservation and restoration in a big way in Sabah. Oil palm producers on land owned by the department, have already been given notice to be RSPO certified by the end of 2017. Teething problems are inevitable in the beginning like RIL (Reduced Impact Logging) when first introduced for widespread application in 2010, but it has now become the accepted technique on harvesting practices in natural forest management areas.
With just over a fifth of its land under oil palm, Sabah produces 30 percent of Malaysia’s palm oil, while Malaysia and Indonesia collectively supply 85 percent of global needs.
RSPO Secretary General, Datuk Darrel Webber said global markets are demanding certified products with an increasing number of consumer nations and global consumer goods manufacturers, pledging to only use RSPO Certified Sustainable Palm Oil in the next two to five years.
Forever Sabah Director, Cynthia Ong said this move not only makes sense but is also an imperative from both the ecological and economic perspectives.
“Research shows that productivity of producers, especially smallholders, can increase dramatically after certification, allowing Sabah to gain in yield while also making conservation gains.”
A central component to the whole process will be cost effective ways to achieve the certification of smallholders to bolster capacity to establish practices on the ground that increase oil palm productivity while reducing impacts like pollution that damages fisheries. Government agencies will collaborate closely with the RSPO, Forever Sabah, civil society, community organizations, Malaysian and international private sector actors, and international philanthropic foundations, to bring technical and financial support to this most crucial component of the larger process.
Given the challenges that need to be addressed, despite Sabah already producing some 20% of certified palm oil under RSPO and most major producers already RSPO Certified in the state, a step wise approach may have to be adopted in consonance of the 10 year time horizon for full compliance.