The Roundtable on Sustainable Palm Oil (RSPO) and its members on Wednesday announced new commitments to reduce the industry’s environmental impact, but warned that their efforts would only make a dent in global sustainability goals if they had government support.
At the industry association’s 13th roundtable conference at the Shangri-La hotel in Kuala Lumpur, RSPO announced that it will publish concession maps of Indonesia and other producing nations, except Malaysia, which prohibits this.
Indonesia is the world’s biggest palm oil producer, but the sector’s expansion in the country has been tainted with illegal deforestation, forest fires and labour rights abuses.
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“RSPO is now clear on its legal position on this issue and reinforced its continuous support to members who are willing…to make maps public”, said the organisation in a press statement. However, the timeline and implementation details have yet to be decided.
RSPO secretary-general Darrel Webber also said in a statement that he hopes that global markets will buy more certified sustainable palm oil, or CSPO, to help raise the sustainability of the industry.
“While we have a shared global vision on sustainable palm oil, we need to set regional objectives for market uptake to reach 100 per cent CSPO in Europe, 50 per cent in Indonesia and Malaysia, 30 per cent in India and 10 per cent in China by 2020”, he said.
Regional statistics on CSPO purchase today are unavailable because RSPO only requires members to report global sales data. Webber said in a press conference that RSPO has now asked companies to report regional figures. These numbers will be available by the middle of next year.
Founded in 2004, RSPO operates the biggest certification scheme for palm oil that is grown in an environmentally and socially responsible way. About 20 per cent of all palm oil sold today is certified by the organisation.
RSPO also announced that after four years of discussion, its board of governors has agreed on how companies can compensate for land cleared which had not passed an assessment for high conservation value (HCV).
Companies that violated RSPO’s rule that no HCV land should be cleared after November 2005 can now propose ways to address this loss to a compensation panel. This can include rehabilitating damaged land or funding the conservation of another forest area proportional to how much land they wrongfully cleared.
Government support crucial
At the conference, RSPO member Sime Darby also launched an online dashboard that will allow its customers to trace palm oil back to its source, and announced new plans to step up fire prevention efforts.
Mohd Bakke Salleh, the Malaysian company’s president and group chief executive, told the 800-strong audience in a keynote address that the company will devote its resources to ensuring fire-safe zones for a five kilometre radius beyond its plantation boundaries.
“We call on all stakeholders, especially governments and like-minded organisations to support us,” he said.
Where there are no standards or poor ones, we have to demand that they come up to speed. We have to engage governments.
Mohd Bakke Salleh, president and group chief executive, Sime Darby
Salleh noted that palm oil plantations account for 5.5 per cent of the 259 million hectares of land used to grow oilseeds. This amounts to about one per cent of the 1.3 billion hectares of arable land globally.
To reverse the adverse impact of the wider agriculture sector, the government needs to provide regulatory support and enforce anti-deforestation legislation on a bigger scale, he said.
“Where there are no standards or poor ones, we have to demand that they come up to speed. We have to engage governments,” he noted.
For example, the public and private sector could work together to prevent fires outside company concessions, said palm oil growers.
Agus Purnomo, managing director of sustainability and strategic stakeholder engagement of Singapore-listed firm Golden Agri-Resources (GAR), shared at a panel discussion that during the recent haze crisis, the fires on the company’s concessions were small enough to be extinguished in a few hours.
But GAR and other growers “are aware that doing better in our own concessions is not enough,” he said.
GAR plans to help prevent fires beyond its boundaries next year, but it needs permission to operate on land it does not own, said Purnomo.
“The challenge we face is that the big players in the industry are moving faster on sustainability than legislation,” he said. “The industry is doing as much as it can, but it will be limited by a vacuum in legislation.”
For example, small and medium-sized companies still develop on forested lands illegally, and better law enforcement is needed to put an end to this, said Purnomo.
Other observers have also pointed out that the Indonesian government needs to quickly issue a comprehensive map of land use concessions in the country. It plans to do so with aninitiative known as OneMap, but this will only be ready in the next two to three years.
Palm oil buyers also need to do their bit to support sustainable cultivation practices, industry players said.
Sime Darby’s Salleh said that of the 12.1 million tonnes of RSPO-certified palm oil in the market, only about half is sold with the accompanying trademark. The rest is sold as conventional oil without the RSPO stamp, because many buyers are unwilling to pay the premium price for certified oil.
CSPO is more expensive than conventional oil. While the price difference fluctuates, Purnomo told Eco-Business that the sustainable palm oil sold by the company fetches between US$5 and US$23 more per tonne than non-certified options.
The palm oil may be certified by RSPO, or by other schemes such as Indonesia’s national certification scheme or the International Sustainability and Carbon Certification for biofuels, he noted.
Several companies such as consumer goods giants Unilever and Procter & Gamble, as well as food companies like Dunkin’ Donuts, Kellogg’s, and Subway have made long-term commitments to buy sustainable palm oil.
But the fact that half of CSPO is not sold with the accompanying certification means that demand from buyers is not high enough, said Salleh. The unwillingness of some firms to spend more on CSPO may discourage growers from investing in RSPO certification, he added.
To the consumer goods manufacturers and food companies in the audience, he asked: “What are you waiting for? The stuff is there, you have made commitments. Buy it.”