Crunch time for sustainable palm oil

A controversial European Commission decision this week to allow the use of certified sustainable palm oil to meet biofuel requirements for the European Union’s transport sector comes just as the major global initiative that oversees the scheme struggles to scale up its progress.

The Roundtable on Sustainable Palm Oil (RSPO) is in the final days of a public consultation on the RSPO standard, and both industry players and NGO participants say time is running out to address the issues.

Critics of the EC decision say that the palm oil industry causes massive emissions of greenhouse gases by driving the deforestation of tropical forests and peat lands, and also contributes to biodiversity loss and land use conflicts with local communities. Meanwhile, RSPO members note that while certified sustainable palm oil (CSPO) has come a long way, increasing the pace of progress is a challenge.

“There is little time…to prevent the tipping point from which damaged natural systems will never recover. We have only decades to turn things around,” said RSPO president Dr Jan Kees Vis at the annual RSPO roundtable meeting held earlier this month in Singapore.

Other participants of the RSPO initiative, which sets the standard for CSPO, told Eco-Business on the sidelines of the meeting that the time frame was more urgent than that.

Greenpeace project leader Suzanne Kruger said that with forest clearing accelerating over the past decade, the RSPO had “no time to spend another year or two debating issues”.

This week, the RSPO will wrap up a month-long public consultation process as part of a five-year review of its principles and criteria for member companies and organisations. The review will finish next spring and a revised standard is expected in the middle of next year.

The 10-year old RSPO is a collaboration of nearly 900 palm oil growers, processors, traders and investors, as well as environmental NGOs and the manufacturers or retailers that purchase the widely-used commodity. Its members commit to a set of eight voluntary guiding principles and 39 criteria aimed at making the industry environmentally and socially responsible.

The annual production of certified palm oil from RSPO members is just over 7 million tonnes, a 250 per cent increase over 2009, and currently 14 per cent of annual global volume of palm oil production.

Despite this progress, advocates like Greenpeace – which produced its own scorecard of palm oil companies - say the RSPO needs to do much more.

“The current review is a very real opportunity for the RSPO to step up,” said Ms Kruger. But, she added, the RSPO is sometimes “hijacked by slower members”.

As a result, industry members are not taking the steps they need for truly sustainable palm oil production, she noted. “At the moment, the RSPO cannot guarantee that CSPO is not contributing to deforestation. Consumers are not getting what they expect,” she explained.

No clear signal on peat

One example of the RSPO’s unresolved issues is palm oil expansion into peat forests, which store vast amounts of carbon if left untouched but become significant greenhouse gas emitters when cleared or burned.

“Even after four years of RSPO debate (on banning peat), there is no clear signal to producers to stay away,” said Ms Kruger.

In Indonesia, where land-use conflicts involving the world’s largest palm oil companies have dogged the industry, the government has issued a two year moratorium on clearing forests with peat layers that are more than three metres deep.

One of the RSPO’s principles is to abide by local regulations, meaning member palm oil producers have committed to avoiding planting on peat lands. However, RSPO members have not agreed to a definition for peat land for the purposes of CSPO.

Forest programme director for NGO Rainforest Action Network Lindsey Allen said, “The science is very clear: The climate can’t handle peat deforestation. Politics is the only thing keeping the RSPO from saying no to peat.”

The RSPO is supposed to hold industry to a higher standard than government regulations, she noted, adding, “I think we can agree that palm oil is not sustainable when natural forest is cleared and community needs are not met.”

Meeting community needs

While the RSPO may not have provided clear direction on peat and greenhouse emissions thus far, it does provide guidance on interaction with local communities. Member companies commit to a practice called Free, Prior and Informed Consent (FPIC), which is aimed at avoiding land-grabs and social injustices to local communities.

Chief operating officer for palm oil firm Cargill Tropical Palm John Hartmann said in a telephone interview that following the FPIC guidelines was necessary to build trust in local communities, particularly in new palm oil regions such as Africa. However, it was a slow process, and producers had to be willing to walk away from potential planting areas if local community members decided plantations were not in their best interest, he added.

Yet, even though the RSPO guidelines are clear, land disputes are seldom straightforward, he noted. He explained that land boundaries are often unclear, the claims of neighbouring communities sometimes conflict, and occasionally individuals take advantage of distrust of the industry by making false claims. Sometimes land issues that are peacefully settled come back years later, he further noted.

The RSPO has set up a dispute settlement process to deal with land-use grievances, but some say they are not working and palm oil companies are not fully following the spirit of FPIC.

Sawit Watch, an Indonesian environmental NGO that monitors conflicts between the industry and local communities, issued a statement requesting stronger policies and action on the more than 200 outstanding land-use grievances, many of them against RSPO members.

Spokesperson Jefri Saragih told Eco-Business that the NGO was stepping down from the RSPO executive board after eight years because Sawit Watch members - frustrated by the lack of progress - felt the group could advocate more strongly as an ordinary member of the RSPO.

Scaling up CSPO

Cargill’s Mr Hartmann noted that the RSPO had established comprehensive guidelines for community involvement and expansion into new planting areas that worked well provided companies followed them. Instead of focusing on stricter standards, the focus should be on broadening membership – particularly buyers.

While he maintains that going carbon-zero - which for the palm oil industry would include no deforestation – is a good objective, he said that attaining it is problematic for a voluntary programme. Producers are worried they would lose out to non-members who are not complying, he added.

One RSPO move that would reduce emissions as well as the need for expansion, he said, is to focus on getting higher yields from the existing plantations, which would provide positive incentives for growers. He would also like to see more emphasis on engaging small-holders and health and safety issues, he added.

NGO WWF International, a founding member of the RSPO, has included clearer direction on greenhouse gases and harmful chemicals on its wish list for the revised principles and criteria, but it is also seeking stronger commitments from member groups to scale up the use of sustainable palm oil.

“The real problem is not that only half of certified sustainable palm oil is being bought  - demand for CSPO at only 52 per cent of the available supply -  but that only half of us in this room are taking the action at all,” said WWF International’s RSPO representative Adam Harrison in a statement at the meeting’s conclusion.

The RSPO needs to address the members who are not doing enough, he said in an earlier interview. For example, Singapore-based agribusiness firm Wilmar International has committed to the RSPO as a grower, but not as a trader – even though the firm trades 40 per cent of the world’s palm oil.

In fact, only 15 per cent of the palm oil processor and trader members of RSPO are trading any certified palm oil, he noted.

The RSPO urgently needs to fill other gaps as well, including the lack of action plans from members in the banking and finance industries and the lack of awareness of sustainable palm oil in Asia’s largest consuming countries – China, India and Indonesia, said Mr Harrison.

He added that three quarters of all global palm oil investment is in Asia, but none of the RSPO members from the banking and finance industry were headquartered in the region.

While he would like to see increased membership and more action from RSPO members, Mr Harrison noted that the certification process that provided transparency and allowed purchasers to trace their palm oil supplies was working well.

On the sidelines of the roundtable meeting, RSPO secretary general Darrel Webber confirmed that not all members were living up to their commitments, but said that the RSPO had worked to provide a transparent system so that “everyone can see who is delivering and who is not”. He encouraged NGOs, buyers and consumers to use the publicly available online reports on members to “name and shame” those that are lagging.

His concern was less with the practices of growers and producers, who he said have “stepped up to the plate”, and more with the buyers that are procrastinating. Most RSPO buyer members have set a 2015 deadline for purchasing only certified sustainable palm oil, but many of them are taking a wait and see approach rather than doing the necessary planning, noted Mr Webber.

United States-based food manufacturer Mars Corporation, for example, committed to using only certified sustainable palm oil by 2015 after exploring different options, including replacing palm oil with alternative ingredients in its products.

Chief sustainability officer for Mars, Andrew Hobday, told Eco-Business that palm oil’s versatility makes it difficult to find sustainable substitutes, so Mars chose to join the RSPO so that they could eventually trace all the oil they purchased back to sustainable sources.

Two years ago, he was despondent about the industry’s progress on sustainability, but today he is hopeful.

Initially, some of the growers seemed to join as a smokescreen – without any serious intention of reducing their environmental impacts – but now they appear to be coming online, he said.

“RSPO is the best game in town, and the best chance to drive change from within rather than stand outside and criticise,” he added.

Greenpeace’s Ms Kruger said the NGO would continue to push for higher standards, whether inside or outside the RSPO.

Asked what the alternative would be, she replied that Greenpeace would never tell people to stop buying palm oil, because it is so central to the livelihoods of communities. But consumers and companies like Nestle, which recently agreed to tighten its palm oil supply requirements in response to a Greenpeace KitKat candy bar campaign, could demand additional measures from suppliers.

However, she noted, “certification is the easiest and more realistic solution”.

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