Analysis: Sustainable palm oil trade body votes through new certification standards

The new standards provide enhanced protections for valuable forest areas, and human and labour rights

The Roundtable for Sustainable Palm Oil (RSPO), the palm oil industry’s self-regulator, agreed on revised certification standards at its General Assembly yesterday.

The RSPO’s Principles and Criteria (P&C) sets out the environmental and social standards which need to be met by members to achieve sustainable certification and is up for a vote every five years.

The 2018 P&C addresses a number of criticisms levelled at previous iterations which allege insufficient protection of valuable forest areas, and of labour and human rights.

A significant change to the P&C is the incorporation of the High Carbon Stock Approach (HCSA) – a methodology which differentiates between forest areas for protection and those suitable for clearing – widely seen as best practice and already in use by a number of leading growers on the Roundtable.

The clearing of forests to make way for the planting of oil palms has been responsible for the loss of “high conservation value” forests and poses a significant threat to native biodiversity, most famously the critically endangered orangutan.

Additionally, RSPO members face a blanket ban on planting on peatland which was allowed under the previous P&C, although “exceptional levels of caution” was advised.

The draining of peatland for the purposes of crop cultivation causes elevated carbon emissions and increases its susceptibility to fire. This is particularly dangerous as many growers use localised burning as a cheap method to clear the land for new planting. These flammable conditions result in uncontrollable forest fires which are an annual regional occurrence, most prominently in Indonesia.

Cultivation of existing peatland plantations will be allowed although additional assessments will be required prior to replanting.

The P&C also contain stronger protections for labour and human rights, with explicit prohibitions on the retention of identity documents, withholding of wages, involuntary overtime and the payment of recruitment fees – employment practices rife within the industry.

Employers will now be obliged to benchmark worker wages with the relevant Global Living Wage Coalition (GLWC) regional calculation or other industry-established benchmarks.

Conservation groups lauded the revised P&C, although governance and enforcement was emphasised as key to its success.

Campaign group WWF told RI that it looked forward to “moving beyond discussion about the Standard’s wording, to a renewed focus on robust implementation and credible assurance”.

However, it identified a number of areas in which the P&C could be further strengthened such as an outright prohibition of hazardous pesticides and a shorter transition period before the imposition of new traceability requirements.

Similarly, the Rainforest Action Network (RAN) welcomed the new standard but cautioned that “a strong certification standard is meaningless without enforcement”.RAN pointed to the RSPO’s recent decision to maintain the membership of Indofood – an RSPO sustainably certified company – despite allegations of human rights violations of its employees, as an example of why it is “running out of time to gain credibility in the marketplace”.

Alongside the P&C, the RSPO is developing a separate certification standard for independent smallholders, defined as growers with a planted area smaller than 50 hectares and not contractually bound to any mills and association.

While smallholders account for 40% of palm oil producers, they contribute less than 1.5% to global sustainable palm oil production.

A big hurdle is the cost of certification which smallholders are unable to absorb due to low yields – reportedly more than 1 tonne per hectare below the national yield average in Malaysia – caused by “inadequate information and knowledge” in oil palm cultivation.

Under the proposed new standard, which is due to be ratified at next year’s General Assembly, eligible smallholders will be provided agronomy training and customised support to improve their productivity.

RSPO’s smallholder strategy has previously been criticised for its failure to improve smallholder inclusion, most prominently by food giant, Nestlé, who was suspended from the Roundtable earlier this year for three weeks.

During the much-publicised spa t, Nestlé chose to report against its own in-house responsible sourcing standard – instead of the RSPO’s – in its annual progress report to the Roundtable.

In response to the suspension, Nestlé asserted that RSPO certification is “not the only tool” to achieve a wholly sustainable palm oil industry, and defended its in-house standards which, at the time, had better protection of peatland, higher levels of traceability, and a stronger focus on smallholder partnerships.

Commenting on the updated P&C, Nestlé’s Head of Responsible Sourcing, Benjamin Ware, told RI that the corporate will continue to pursue “the adoption of a simplified standard for smallholder farms” and welcomed the revisions, saying: “These criteria are already part of Nestlé Responsible Sourcing Standard.”

While criticisms have long dogged the industry, palm oil is once again attracting negative headlines after a viral campaign by UK frozen food retailer, Iceland, called for a palm oil free Christmas to protect the orangutan.

Back in April, Iceland announced in it would phase out the commodity in its own-label range – while bearing the cost of reformulation – as it did not believe there was “such a thing as sustainable palm oil”.

This has been interpreted as a vote of no confidence in the palm oil industry’s ability to self-regulate.

However, conservation groups widely oppose a ban on palm oil as it is the highest yielding oilseed crop per hectare by a significant margin.

According to the WWF, “other oils or fats are often worse for the environment: they need more land and so can drive even more loss of valuable habitats for wildlife like forests, savannahs and grasslands”.