The world’s leading palm oil sustainability certification scheme may have helped reduce deforestation and pollution in areas where it’s applied, but has had a limited impact on rural development, a study shows.
The paper evaluates the trade-offs between the development and environmental impacts of Roundtable on Sustainable Palm Oil (RSPO) certification on local communities in Sumatra and Kalimantan, the Indonesian portion of the island of Borneo. The two regions account for more than 90 per cent of oil palm expansion since 1990 in Indonesia, the world’s biggest producer of palm oil.
The study authors said little is known about the trade-offs and complementarities between the environmental and socioeconomic goals of the RSPO at the village level. To delve into the issue, they used a data set covering five time points from 2003 to 2014 and encompassing 7,983 and 3,545 villages in Sumatra and Kalimantan respectively.
For environmental outcomes, the study looked at reductions in water, air and land pollution, deforestation, loss of primary forests, and incidence of fires, which are often associated with oil palm expansion and production.
In terms of developmental outcomes, the study focused on the provision of public goods in each village, such as the number of private educational facilities, the number of households with access to non-state sources of electricity, and the presence of health centers.
[The paper] is an important first effort, more research is needed on migration and the channels through which voluntary market-based interventions like RSPO have an impact.
Janice Ser Huay Lee, assistant professor, Asian School of the Environment (ASE), Nanyang Technological University (NTU), Singapore
According to the study, RSPO brought small environmental benefits to the villages, reducing deforestation by an average of 0.05 per cent and 1 per cent in Sumatra and Kalimantan, respectively. It fared better on pollution, decreasing the incidence of village land pollution in Kalimantan by 21 per cent.
Study co-author Janice Ser Huay Lee, a land systems scientist at Nanyang Technological University (NTU), Singapore, said these environmental benefits could just as well be attributed to environmental protection regulations in Indonesia and the country’s mandatory certification scheme, the ISPO.
Increased urbanisation could also be a factor: “However, in Sumatra, we also detected a decrease in population density. Therefore, we cannot rule out the possibility that the positive environmental impacts are due to decreased population pressure,” Lee told Mongabay.
She added that while the paper “is an important first effort, more research is needed on migration and the channels through which voluntary market-based interventions like RSPO have an impact.”
In terms of village infrastructure, the study found that RSPO certification increased the average number of private educational facilities in villages in Kalimantan, but had no statistically significant effect on other village development indicators in either region.
“Our results indicate that, although the RSPO has had limited impacts on the number of village educational and health facilities in the first few years since its implementation, it had an overall positive impact on supporting environmental quality,” the study said.
In cases where RSPO certification increased developmental outcomes, it might be because certified producers provided additional village public goods as compensation to local communities, to secure rights to produce oil palm on village land so that they could meet certification requirement, according to the study.
“We expect the additional benefits due to RSPO to accrue in villages that have unresolved land tenure issues with the oil palm concession holder at the time of certification,” Lee said.
The lack of significant improvements in most village development indicators found in the study may be due to the nature of criteria intended to ensure that companies contribute to village development.
The 2007 RSPO criteria that certified companies must “contribute to local sustainable development wherever appropriate” is vaguely worded, and thus may lack stringency due to potentially broad interpretation by auditors, the study suggests.
Moreover, guidance on how to implement this criteria is also vague.
Lee said the lack of improvements in village development indicators might also be because rural development benefits take some time to materialize, and the study time period was too short to capture any significant changes in the villages.
Furthermore, the indicators used for measurable outcomes for rural development from the RSPO are limited, with the study focusing on infrastructure indicators (public goods) rather than on household-level indicators like poverty, health, employment, and malnutrition, Lee said.
While there seem to be trade-offs between the development and environmental impacts of RSPO, the researchers also found cases in Kalimantan where RSPO certification contributed to positive development and environmental benefits at the same time: a complementarity.
Complementarities are more likely where villages are located on flat land, the study found.
Villages with slopes of less than 2° in Kalimantan were found to have a significant increase in the number of private educational facilities, as well as decreases in land pollution and deforestation.
Lee said this might be because flat land is cheaper to cultivate, and hence more profitable, allowing palm oil companies to implement more environmentally friendly practices there.
At the same time, RSPO increases the bargaining power of local communities, since certification can’t be granted unless tenure disputes with local communities are resolved.
“Thus, the combination of increased communities’ bargaining power and higher profitability on gentle slopes implies that a concession holder may be willing to provide more benefits to the local communities in these areas in order to gain access to the land,” Lee said. “The above is what, we believe, is driving the complementarity at gentle slopes in Kalimantan.”
In villages located in areas with slopes of more than 3°, the study found more trade-offs, with RSPO certification increasing the probability a village would have a health center while experiencing deforestation at the same time.
Lee said this is because companies might not be able to afford more environmentally friendly practices on steeper terrain, which isn’t as cheap to cultivate as flat land.
“However, they may still have to provide compensation to local communities,” she said.
Another factor that could contribute to the trade-offs is population increase.
“We find that in Kalimantan there was a slight (but not statistically significant) increase in population density at higher slopes,” Lee said. “This is where we observe the trade-offs between health facilities and deforestation.”
The study said that, “Especially on gentle slopes where oil palm production is most profitable, certification may create incentives for improving village infrastructure and mitigating negative environmental impacts associated with oil palm production and expansion.”
It found the environmental benefits of RSPO certification to be significant on gentle slopes, with 10 per cent reduction of deforestation on slopes of less than 2° in both Kalimantan and Sumatra. But on slopes of more than 3°, RSPO certification had the opposite effect.
“More land area under RSPO certification also resulted in more remaining primary forest and reduced the incidence of water pollution in Sumatra villages on slopes of less than 3°, while in Kalimantan, certification reduced the incidence of land pollution on slopes of less than 2°,” the study said.
All these findings show that RSPO certification can be effective in terms of promoting both conservation and development under certain conditions, according to Lee.
“Future research is needed to tease out the different mechanisms/channels through which RSPO affects change on the ground, however. Our work is an important first step in that direction,” she said. “Future work also needs to assess the longer-term impacts of certification. In terms of policy implications, we would recommend RSPO help collect more and better publicly available data from certified concessions at least. These data can facilitate future impact evaluations.”
This story was published with permission from Mongabay.com.
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