POIG raises the bar for deforestation-free palm oil

The Palm Oil Innovation Group - a collective of companies and organisations which advocate for stronger industry standards on sustainable palm oil - has unveiled a new set of criteria to verify that the commodity is truly deforestation-free.

orang utan indonesia rainforest
An orangutan in an Indonesian rainforest. The expansion of the palm oil industry has been linked to deforestation and forest burning worldwide, which fuels environmental problems such as climate change, habitat destruction, and biodiversity loss. Image: Shutterstock

The Palm Oil Innovation Group (POIG), an international collective of palm oil growers and non-government organisations, on Thursday released new standards to verify that companies are producing the commodity without deforestation, peatland destruction, or the exploitation of communities and workers.

POIG’s verification indicators are stricter than the Roundtable on Sustainable Palm Oil’s (RSPO) current requirements for certifying palm oil which is grown in an environmentally and socially responsible way. RSPO is the industry association for sustainable palm oil.

It is also the first set of indicators which has been tested out by major palm oil companies to prove to global brands that producing deforestation-free palm oil is both operationally possible and and economically feasible, said the group, which was founded in 2013 to build on RSPO standards.

POIG members include non-government organisations like Greenpeace, Rainforest Action Network (RAN) and the Orangutan Land Trust; and consumer goods firms like Italian confectioner Ferrero and French multinational Danone.

Palm oil companies such as Brazil’s Agropalma, Colombian firm Daabon and Singapore-based Musim Mas are also POIG members. No Indonesian palm oil grower is a member yet.

The group’s announcement comes just days after Norway’s Government Pension Fund Global - the world’s largest sovereign wealth fund - revealed that it dropped 11 companies from its investment portfolio because of their links to forest destruction.

Affected companies include Hong-Kong based First Pacific and Kulim Malaysia, both palm oil firms; and Korean conglomerate Daewoo International.

POIG released a first set of standards in April 2014, and the recent update incorporates feedback from the public and the palm oil companies which tested the indicators in their own operations. These include Agropalma, Daabon, and Papua New Guinea-headquartered New Britain Palm Oil.

The latter firm is a founding organisation of POIG, but not officially a member since it was acquired by Malaysian palm oil giant Sime Darby.

Annisa Rahmawati, Greenpeace Southeast Asia forest campaigner, said that the launch of the new indicators “marks a leap forward in our efforts to transform the palm oil sector “.

Matthias Diemer, chair of POIG, added that POIG “remains the gold standard for the production of responsible palm oil. It … tackles some of the most challenging issues facing the palm oil sector”.

Stricter rules, tried and tested

POIG says its standards are meant as a complementary addition to existing RSPO standards. Grower companies that sign up to become a POIG member must be at least 50 per cent RSPO certified, with a commitment to becoming fully certified within two years of their membership start date.

The group’s sustainability criteria aim to address some issues which RSPO’s certification requirements do not, including the destruction of high carbon stock forests, development on peatlands, the use of toxic pesticides, and the violation of the human and labour rights of workers. 

In a bid to fix these shortcomings, RSPO last month launched RSPO Next, a stricter but voluntary set of rules which require a blanket ban on deforestation and peatland development, and ending the use of a hazardous pesticide called Paraquat, among other things.

POIG, whose members such as Greenpeace dismissed RSPO Next as a “failed upgrade”, noted that its standards exceed even RSPO Next requirements on a number of issues. It said that it provides a cleardefinition of what vegetation is consdered to be forest, something which green groups say RSPO Next fails to pin down.

POIG said it recommends a clear methodology to distinguish between forest which must be left untouched and land that can be cleared.

Any company seeking POIG’s endorsement must use the industry’s High Carbon Stock Approach to assess land before clearing it. This is a method jointly developed by over 20 NGOs, palm oil growers and consumer firms including Greenpeace, RAN, AgroPalma and Anglo-Dutch consumer goods giant Unilever. 

The HCS Approach, which POIG says is “currently the only credible and practical approach available that has multi-stakeholder support and governance”, classifies forest into six groups: high density forest, medium density forest, low density forest, young regenerating forest, scrub, and cleared/open land.

The first four categories are considered ‘High Carbon Stock’ forest which should not be cleared. 

We have shown that it is possible to grow palm oil responsibly and that our claims can be tested and verified in the field by independent third-parties in a cost-effective manner

Tulio Dias Brito, corporate social and environmental responsibility manager, Agropalma.

Under POIG’s other requirements, growers are forbidden from cultivating genetically modified organisms on plantations, workers cannot work more than 48 hours a week (excluding overtime) and must get at least one day off in six consecutive days, and companies must produce a public sustainability report every two years. 

Agropalma, Daabon, and New Britain Palm Oil, which tested the POIG criteria were found to be largely compliant with the requirements on their plantations in Brazil, Colombia, and Papua New Guinea respectively. POIG will soon test out these indicators in Indonesia.

Tulio Dias Brito, corporate social and environmental responsibility manager, Agropalma, said in a statement that “we have shown that it is possible to grow palm oil responsibly and that our claims can be tested and verified in the field by independent third-parties in a cost-effective manner”.

“This is important as consumers want to know that the ingredients in the products they use have been grown to the highest environmental and social standards possible,” he added.

Companies can prove their compliance to these indicators through third-party audits. While there is no trademark associated with POIG-compliant palm oil yet, consumers should check with the brands they buy from about their palm oil policy, said POIG.

From guidelines to action

To enforce the implementation of these indicators, POIG requires all palm oil growers which have signed up to join POIG to undergo a third-party audit within the first year of their membership being approved.  If they fail this audit, their membership could be suspended or terminated. 

Going forward, POIG said it will focus on proving that palm oil cultivation without deforestation is an achievable goal, and so is traceability of the supply chain to the level of plantations and smallholder plots. 

Robin Averbeck, forest campaigner, RAN, said: “The time has come for other palm oil producers, traders, retailers and manufacturers to demand, and scale up their efforts to produce truly responsible palm oil”.

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