As the chief of the Roundtable on Sustainable Palm Oil, Darrel Webber’s daily preoccuption these days is tackling the widespread deforestation and burning that has become synonymous with the industry.
It is with certain irony that he relates in a recent interview, that as a young boy aged 9, he helped his grandfather set fire to forests in his native state of Sabah, Malaysia, to clear land for a fruit orchard.
The RSPO secretary general, now in his forties, recalls that back then, concepts like sustainability or biodiversity were simply not part of a farmer’s lexicon.
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Today, however, the farming scene has changed. The wider agricultural industry is more aware of the social and environmental impact of their activities, as consumers are also becoming increasingly educated and demand that companies operate responsibly.
But while there has been improvement in recent decades, sustainable palm oil production and consumption in Asia still has a long way to go, says Webber.
Speaking to Eco-Business at the RSPO’s annual general assembly in Kuala Lumpur last month, Webber comments that “it is unfortunate” that countries like Malaysia, Indonesia, and Singapore are not big markets for sustainable palm oil, “because the consequences of deforestation and peatland burning are felt most acutely in this region”.
The RSPO, set up in 2004, aims to ensure that all palm oil is sustainably produced. The commodity is used as an ingredient in food, consumer products such as cosmetics, and as a biodiesel.
As it becomes one of the fastest-growing global commodities, it has also been linked with deforestation and burning, which in turn drives climate change, causes biodiversity losses, destroys animal habitats, and is responsible for the annual haze that plagues Southeast Asia every year. The expansion of palm oil plantations has also been associated with illegal clearing of land owned by rural communities and indigenous people, and exploitative labour practices.
The roundtable seeks to address these issues by engaging its members - which comprise almost 1,800 organisations including palm oil growers, traders, non-government organisations (NGOs) and consumer products manufacturers, to develop and enforce a global standard for sustainable palm oil.
Getting Asia on board
In Europe, progress is much greater than in Asia. Sales of certified sustainable palm oil are particularly strong in the United Kingdom, the Netherlands, Belgium, France and Germany. Industries and governments in these countries have also pledged to remove unsustainable palm oil from their supply chains.
In contrast, the growth of markets for sustainable palm oil in China, India, and the rest of Asia is stunted by a lack of public awareness on the impacts of the industry and reluctance from buyers to pay a higher price for the certified commodity.
China and India are among the world’s largest palm oil markets, and together with Indonesia, account for 42 per cent of global palm oil sales.
Webber points out that Singapore has a key role in supporting sustainable palm oil in Asia. The city state is a major palm oil trading hub, and many of its banks are major financiers of agricultural companies in the region.
However, not a single Singaporean bank is an RSPO member today, notes Webber, adding that banks should only invest in responsible companies.
“Even though Singapore is a non-producer country, there is a strong financial connection to agricultural practices on the ground,” he explains.
While Webber acknowledges that the recent Transboundary Haze Bill – passed by Singapore’s Parliament in August which allows the government to penalise companies that cause haze pollution - should be commended for demonstrating a clear will to act against practices such as forest burning, he says that “the enforcement of such a law will be challenging”.
Financial institutions can exert a direct influence on the projects they support, says Webber, adding that many banks around the world, including the Dutch Rabobank and Hong Kong and Shanghai Banking Corporation have already joined RSPO as members and pledged not to knowingly invest in palm oil grown on illegally deforested land.
Since 2008, RSPO’s certification scheme has grown to become the dominant mechanism through which investors, manufacturers, and consumers can identify sustainable palm oil production and use in the industry today.
It assesses the practices of palm oil growers against a set of guidelines such as abiding by local laws, conservation of biodiversity, and not using harmful pesticides.
About 18 per cent of the world’s palm oil supply has been certified by RSPO since 2008, with about 53 grower companies and 808 manufacturers endorsed. Companies who are RSPO members represent 40 per cent of the global palm oil industry.
Manufacturers that use palm oil in their products can also get their supply chains certified by RSPO, either by demonstrating the use of certified sustainable palm oil, or by purchasing ‘GreenPalm’ certificates to offset unsustainable palm oil use. The GreenPalm scheme operates on a model similar to carbon trading, where companies that use uncertified palm oil can still claim sustainability credentials by purchasing certificates that support RSPO-certified growers.
Making RSPO certification count
It is unfortunate that countries like Malaysia, Indonesia, and Singapore are not big markets for sustainable palm oil, because the consequences of deforestation and peatland burning are felt most acutely in this region.
Darrel Webber, secretary general, Roundtable on Sustainable Palm Oil
Even as RSPO’s membership and the volume of certified palm oil grows, environmental groups say that the guidelines – jointly developed by private sector companies and NGOs – do not stop growers from carrying out deforestation and peatland burning.
Managing differing expectations between the private sector and NGOs is familiar territory for Webber, who led environmental NGO WWF International’s engagement with the palm oil sector and held positions at Shell Malaysia and consulting firm Global Sustainability Associates, before becoming RSPO’s secretary general in 2011.
Webber, who was actively involved in the development of the first set of standards in 2004 when he was at WWF, recalls that “the growers and NGOs involved in the process all assumed they had the best ideas for the right way forward.”
It took many frank discussions for the various stakeholders to compromise on their individual expectations and agree upon a set of standards, he adds.
The fragile consensus among RSPO members was evident when shortly after a 2013 revision of the standards, WWF released a statement criticising the new standards as unambitious and urged palm oil players to do more to guarantee zero deforestation and forest burning.
Some global companies such as consumer firm Unilever, Swedish furniture giant IKEA, and palm oil trader Wilmar International, facing increasing pressure from consumers and environmental campaigners, committed to using only zero-deforestation palm oil in their operations. Unilever pledged to source all of the company’s palm oil from sustainable sources by 2015, while IKEA will do so by December 2017.
At the RSPO meeting in KL, one question that emerged from some observers was whether RSPO may be losing relevance as governments such as in Indonesia and Malaysia set up their own certification schemes and private sector companies “bypass” the RSPO process by taking steps that surpass their standards.
Webber is unperturbed by these trends, and does not see them as a threat to RSPO certification. In fact, the Indonesian and Malaysian Sustainable Palm Oil Standards are complementary to the roundtable’s objectives, he says.
“RSPO certification ensures the fair treatment of palm oil workers, resource efficiency, and consent from local communities,” says Webber. “Zero-deforestation claims alone do not guarantee all these other qualities.”
“We are fine for people to make commitments that exceed what RSPO standards require, but urge them to meet RSPO’s holistic sustainability standards first,” he adds.
Webber explains that the standards introduced by Malaysia and Indonesia, which are compulsory for growers, will raise the bar for the whole industry, so smallholders who must now to get these national certifications may not find RSPO’s requirements too daunting.
Making sustainable palm oil a global norm
As the leader of the 20-strong RSPO team, Webber’s priority is to grow the organisation’s influence over the palm oil supply chain by increasing its membership.
Even as it recently pledged to take strong enforcement actions against errant members such as terminating the membership of companies who had not submitted compulsory reports for three consecutive years, Webber says his preferred mode of approach is engagement.
Getting more industry members engaged in discussion is the first step to helping them to change their business models to support sustainable palm oil, he says.
So how long will it take before the entire global palm oil supply is certified sustainable by RSPO?
“We don’t need to get to a stage where 100 per cent of the global palm oil supply is sustainable,” says Webber. “We just need to get to at least 50 per cent, where it is as easy to purchase sustainable palm oil as it is with uncertified.”
“There may be a slight price premium on sustainable palm oil for now, but as it becomes a mainstream product, the economies of scale will address this issue,” he adds.
To spur the production and purchase of certified sustainable palm oil, RSPO aims to grow existing markets in the United States and southeast Europe, and work on expanding into Asia.
To boost market demand, he suggests that consumers, who are becoming increasingly aware of the perils of unsustainable palm oil through media reports and NGO campaigns, should write to companies to lobby them to use sustainable palm oil in their supply chains.
“People don’t realise the power they have to change behaviour,” he says.