Joseph D’Cruz, the recently appointed chief executive of the Roundtable on Sustainable Palm Oil (RSPO), grew up in Kuantan on the east coast of Peninsular Malaysia, at a time when oil palm plantations were proliferating all around him.
He is from a generation that materially benefitted from the palm oil trade, and holds a sympathetic view towards the world’s most widely used — and demonised — vegetable oil.
“People [from Kuantan] associate the oil palm industry with the opportunity to access education, get better homes, and build dignified lives from producing a decent product that feeds a need that the world has in abundance,” he told Eco-Business in an interview at his hotel in Singapore.
Palm oil is an important part of the developmental story of Malaysia and Indonesia, the two biggest grower countries, said D’Cruz. But he also understands the other view of palm oil, more commonly held in consumer countries in the West, which reviles the trade for destroying forests and pushing species such as the orangutan to the point of extinction, and — more recently — for human rights abuses against workers and local communities.
It was alarm over the impact of a rapidly-expanding palm oil trade in the early 2000s that led to the creation of RSPO. In 2004, a group of palm oil growers, buyers, investors and non-governmental organisations formed the organisation to weed deforestation and human rights abuses out of the industry, by encouraging the growth and certification of sustainably-grown oil.
A big challenge we face is that people do not understand what certified sustainable palm oil really means.
“People in the grower countries need to recognise that this reaction [against palm oil] in consumer countries is driven by people who want to do the right thing,” said D’Cruz. “We need to collectively point out to them that doing the right thing is buying sustainable palm oil.”
But detractors argue that truly sustainable palm is an elusive ambition. RSPO continues to receive criticism linking certified growers and buyers to environmental and social harm.
For example, the world’s biggest seller of RSPO-certified oil, Malaysian grower Sime Darby Plantation, was barred from selling its oil in the United States last year after an investigation revealed widespread forced labour on its plantations.
In June, an investigation by the Gecko Project found that big palm oil firms in Indonesia have been cheating smallholder farmers out of profits promised to them in agreements to share their land.
D’Cruz said that much of his first three months in the job have been spent talking to smallholder groups to get a better understanding of the challenges they face. Addressing the long-overlooked social side of the palm oil story will be a key area of focus under his leadership as RSPO prepares to review its principles and criteria (P&C), standards for sustainable palm oil production which members must comply with.
So is trying to convince the big buyers of palm oil, consumer goods companies such as Unilever, Johnson & Johnson and Mars, to help tell the sustainable palm oil story to consumers. Most brands that use RSPO-certified oil do not signpost their use of sustainable oil on their products, likely to distance themselves from the palm oil industry’s bad reputation.
“Consumer goods companies can do a better job of stepping into the middle ground and saying: ‘Hey, if you buy certified sustainable palm oil, you are contributing to avoiding deforestation and giving decent lives to people in poor countries’,” said D’Cruz.
The Malaysian brings more than 20 years experience at the United Nations, most recently with the UN Development Programme (UNDP) in New York, to the role of running RSPO, a position that has been vacant for a while following a period of upheaval for the multi-stakeholder group.
“I hope my years at the UN have helped me develop some understanding of how you build shared purpose and commitment among a very diverse group of stakeholders,” D’Cruz said.
In this interview, the executive talks about his ambitions for his first year in the job, why the high price of palm oil is an opportunity for sustainability, and why ongoing scrutiny is not a bad thing for RSPO.
You joined an organisation that has gone through a period of unprecedented upheaval, with a number of staff departures. To what extent did RSPO need fixing when you joined?
There have been a lot of changes, particularly at the leadership level, and uncertainty around leadership can be very demoralising. But, having met most of the team, one of the things that has struck me was the degree of motivation and commitment among the staff. In spite of the upheaval, the organisation has delivered; membership numbers and [certified palm oil] volumes have gone up, and we are well prepared for the upcoming P&C review.
A sustainability executive at a palm oil company described your role as a “thankless task” given the criticism RSPO receives from all angles. What motivated you to take this job?
After more than 20 years in the UN system, being given thankless roles and subjected to criticism is not an unfamiliar experience. Jokes aside, RSPO exists to bring together stakeholders with divergent interests, and the job involves finding where those interests overlap, and where there is a common purpose and shared direction. There is a genuine opportunity to shift this industry on to a more sustainable path, If we can get those interests aligned.
You recently told Reuters that the high price of palm oil is an opportunity for growers to use their bumper profits to invest in greener production. To what extent do you think this is really happening?
It is still too early for me to give you a sense of what is happening, as I have not met with many plantation companies — I have spent more time talking to smallholders. The surge in prices over the past year or so happened at a time of disruption for the industry. But as the production side of the industry starts to stabilise, and the worker issues in Malaysia are resolved, there is now a real opportunity for change. The high prices are likely to persist for a while, so growers will have the financial resources to invest more in sustainability.
What impact has the high price of palm oil had on RSPO and certification? Anecdotally, I have heard that some smaller businesses in Singapore have switched from certified sustainable palm oil back to regular palm oil, because of the higher price point of certified oil…
The price difference between certified and non-certified palm oil is marginal. While I appreciate that that there are some buyers who are under price pressure, we are not seeing companies switching [from certified to non-certified] as a major trend in our data. The palm oil supply chain has a diverse set of buyers and traders who supply to many different markets. In some markets, certification is not an expected requirement. RSPO is still only 19.8 per cent of the global palm oil market. There is always going to be leakage between our market and the broader market.
Part of your job is to increase certified sustainable palm oil’s market share, which has stayed at 20 per cent for some time. Can you share anything about your strategy to increase that ratio?
I am not pretending that I have solutions that thousands of people working on this problem have not thought of already. What I am doing right now is talking to people in the industry, to try and get a clearer sense of what we can do.
When I was appointed by the board, we had a good discussion about the direction in which RSPO needs to go. The primary mandate and focus of RSPO is sustainability. Growing the proportion of the industry that is certified is a means to an end. The challenge we face is how to make the case that building a sustainable industry is not just a worthwhile goal, but a market and organisational necessity.
We also need to articulate what sustainability looks like. A sustainable palm oil sector is not just environmentally sustainable. It also needs to meet economic and social sustainability goals. This is a sector that is not just large plantations run by corporations, it is millions of smallholders; building a sector that provides sustainability for these smallholders is a huge opportunity and an important challenge.
What about the big markets, India — the world’s biggest consumer of palm oil — and China, which are so-called “leakage” markets? There is clearly a need to raise sustainable palm oil’s profile in those markets.
That is something that is not going to change overnight. But there is a lot of potential for us to tell the sustainability story better in those countries. There is a consumer market in China and India that is ready and willing to be able to embrace the idea of sustainable palm oil.
Implementation is a huge challenge for a sector like palm oil, which is global, operates in remote locations, and under challenging circumstances.
RSPO will soon review its principles and criteria (P&C). Can you give us any insights into how you think they need to change?
The revision is very much a stakeholder driven process, which RSPO facilitates. It is out of this process that we will agree on the issues that need to be addressed. It is not rocket science to assume that the social dimension of palm oil will be a key topic. Climate change is also an area where we need to look at. The review also allows us to learn from the last P&C in 2018, and to improve the implementability and the auditability of the standards.
What value can RSPO bring for growers that are certified by other schemes, such as the International Sustainability & Carbon Certification (ISCC), the Malaysian Sustainable Palm Oil (MSPO) scheme or the Indonesia Sustainable Palm Oil (ISPO) certification?
I would like to make an important clarification: I do not see certification schemes like MSPO and ISPOP as rivals. We just signed a memorandum of understanding in Jambi, Indonesia, to work with the provincial government on an initiative to bring smallholders into ISPO certification as a stepping stone to RSPO certification.
The difference with national certification standards is that they are mandatory, whereas RSPO is voluntary. The content of MSPO and ISPO and what it asks growers to do is remarkably similar to RSPO — they are 60-70 per cent identical. MSPO and ISPO set the baseline for sustainability in the particular country, and RSPO brings in added value on two levels: we provide certification all the way down to end buyers in other countries, which is harder for national systems; and because we are voluntary and are driven by stakeholders, we can be more flexible, push boundaries and test new standards.
A report by Greenpeace on forest-risk certification schemes last year found that RSPO was stronger than others, including Fairtrade International and Forest Stewardship Council in areas such as transparency, but weak on implementation and penalising rule-breakers. What progress is RSPO looking to make on those two fronts?
I take Greenpeace’s point when they say that we need to improve implementation, which is a huge challenge for a sector like palm oil — it is global, operates in remote locations, and is under challenging circumstances. But there is a lot of transparency around what happens when standards are not met. Any member or stakeholder can submit a complaint about an alleged violation, and this is tracked publicly.
We also have a well-documented history of imposing penalties on companies or members that have violated the rules. Bear in mind that RSPO is not a policing organisation. We are a voluntary standard for members to hold each other accountable. Major global corporations submit themselves voluntarily to being penalised, including in some cases halting production and swallowing millions of dollars in lost revenue in order to continue to be certified by RSPO.
In May, [Malaysian palm oil company] IOI reached an agreement with local communities in Sarawak after an eight-year negotiation process that involved RSPO’s complaints panel. The company agreed to return 4,615 hectares of land to local communities, which will be gazetted as a Native Communal Reserve.
Many consumer goods firms do not carry the RSPO logo on their products to avoid negative PR. Do you have any plans to engage with consumer goods companies about this, to help drive the sustainable palm oil conversation among consumers?
For a lot of brands, palm oil is only a small fraction of what is in their products, so it does not make sense for them to carry the [RSPO] — and that is a big chunk of the market. But there are also products where doing so makes sense, and I think we need to see companies being much prouder about putting the logo on their products.
There is a valid perception in the minds of many consumers that palm oil has a lot of challenges. But the distinction between palm oil that is sustainably produced according to RSPO standards, and regular palm oil, is vast. We, as the RSPO family, need to do better at explaining that distinction to consumers.
We will continue to face scrutiny, irrespective of what happens in other sectors — and that’s not a bad thing.
Produced according to RSPO standards, palm oil is 35 per cent less emissions-intensive than conventional oil, and 20 per cent less biodiversity-negative. When you see the RSPO logo, you are buying the most sustainable oil you can get. Palm oil is the most productive way to generate vegetable oil per hectare.
Palm oil’s image has been dragged through the mud over the years. What is your sense on the way that the perception of palm oil is changing, as scrutiny shifts from palm to other forest-risk commodities like soy and beef?
The palm oil industry has faced this scrutiny on a much more sustained level for much longer than I can think of. And we will continue to face that scrutiny, irrespective of what happens in other sectors — and that is not a bad thing. The progress RSPO has made over the last 18 years has been because stakeholders, consumers, buyers, and growers have set themselves the task of getting better over time. Hopefully, there are lessons to be learned and applied elsewhere.
What do you want to have achieved after a year in the job?
We are investing a lot in new systems, increasing headcount, and bringing in people who can help us think through some of the challenges around labour. We are also ramping up our membership and capacity in different geographies, including China, India and elsewhere. We need to build a much stronger secretariat that can really propel the kind of ambition we’re hearing from our stakeholders.
I also hope we get better at telling the [sustainable palm oil] story. A big challenge we face is that people do not understand what certified sustainable palm oil really means — the effort that has gone into making, selling and delivering a quality product that meets [sustainability] criteria. We need to get better at telling that story in our communications and outreach.
This interview was edited for clarify and brevity
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