Costly criteria, inadequate returns
The supply chain
There are several ways in which CSPO can be supplied to the end user. Some users insist on ‘identity preserved’ (IP) or segregated oil, which is kept separate from uncertified oil throughout processing and shipment; this has additional costs. The Palm Oil Innovation Group (POIG) has added a requirement for all fresh fruit bunches to be from traceable sources; this is difficult or impossible for many mills processing smallholder fruit, and some may stop buying from smallholders.
The simplest alternative to IP oil is the ‘book and claim’ system, in which a producer receives a tradeable certificate for his oil. Palm oil users can buy certificates and can justifiably claim to be supporting sustainable palm oil, while buying oil in the open market; such oil is chemically identical to CSPO. This system would be ideal for smallholders, particularly if individual certificates were to be issued, rather than a single certificate for the group as at present. The individuals could sell their certificates, and buyers would be supporting identifiable smallholders. However, there is a view that describing anything other than IP oil as sustainable is somehow ‘cheating’, and consumers may favour products from segregated supply chains. Thus the main reason for a company to buy IP oil is public relations.
Criticism of the RSPO
The RSPO has been criticised for being too lenient with member-growers who fail to meet the criteria, and for lacking the ability to monitor its members’ behaviour. There is a complaints procedure which allows third parties to object to infringements, and some producers have had their membership suspended, particularly where land rights have been disputed. Perhaps the most important criticisms are that certification bodies have failed to identify unsustainable practices and that non-compliance by members is widespread, with some CSPO coming from recently deforested land. In some cases, the certifiers appeared to be colluding with plantation companies to disguise violations of the RSPO criteria.
NGOs have criticised the RSPO for being too lax but, conversely, some of the criteria are criticised by growers as misconceived or unnecessary. Even the most committed growers have become disillusioned by apparently senseless decisions, and are frustrated by the bureaucracy. For example, the complete NPP has to be followed even when converting to oil palm from another crop. There is no obvious logic to this; forest biodiversity and carbon stocks have already been lost. Economic sustainability is important, and if a grower considers that conversion to oil palm is in his economic interest, the RSPO should not prevent conversion.