Costly criteria, inadequate returns
Other certification systems
At least eight different sustainability standards have been applied to palm oil. Of these, the most important are probably the Indonesian and Malaysian certification systems (ISPO and MSPO), the POIG Charter, together with RSPO Next. The RSPO has had the important effect of provoking the development of ISPO and MSPO. ISPO certification is already a legal requirement for plantations in Indonesia, and the MSPO will be mandatory in Malaysia by end 2019.
The RSPO has the most comprehensive Social Impact Assessment requirements and the strongest measures for biodiversity protection. ISPO provides the least stringent protection for biodiversity, but the Indonesian government has imposed a moratorium on the clearance of primary forest. This does not apply to secondary forest, however, and there are claims that large areas of primary forest have been classified as secondary, and thus fall outside the moratorium. The RSPO gives the greatest protection of human rights and community livelihoods, and ISPO the weakest.
These differences will lead to criticism of the MSPO and ISPO, but a combination of compulsory certification and more ‘grower friendly’ criteria means that the ISPO and MSPO may have a more significant influence on the behaviour of the palm oil industry than the RSPO, whether or not the certification is accepted by NGOs and consumer countries.
A useful distinction can be made between certification systems and supply chain standards. The former are labelling schemes originating outside the supply chain, while a supply chain standard is a procedure that large users require their suppliers to follow. The POIG Charter for retailers, manufacturers and traders is essentially a supply chain standard. The aim is to ‘break the links’ between palm oil and deforestation, and human, land and labour rights violations. Human, land and labour rights are covered by the RSPO criteria, but the POIG Charter includes additional provisions, including a requirement for independent advice to local communities on the FPIC process.
The so-called link between oil palm and deforestation is actually quite tenuous; a study sponsored by the RSPO found that, in Malaysia, Indonesia and Papua New Guinea, only 4.2% of the expansion between 1990 and 2010 was at the expense of primary forest. There is often an interval of six to 10 years between forest degradation and oil palm planting, indicating that oil palm planting was probably not the initial reason for deforestation. The high conversion percentages from forest to oil palm quoted by some authors do not allow for these problems. Other POIG criteria, such as the prohibition on cultivation of GMOs, bear no relation to the usual definitions of sustainability.
The Sustainable Palm Oil Manifesto (SPOM) was published by five major plantation companies in 2014. Under pressure from NGOs and consumer companies, this included a temporary moratorium on the clearance of ‘high carbon stock’ (HCS) forest, while a study to establish what constitutes HCS forest was completed. This was supposed to take a year, but the moratorium is still in force.
RSPO Next is a voluntary standard aimed at members who have exceeded the current requirements for certification. A number of criteria are added to the P&C, including commitments to no deforestation and no development on peat. There must be reductions in GHG emissions, including by collection of biogas from effluent. Companies must give training to all smallholders in the supply base. The RSPO CEO has been quoted as confident that, if RSPO Next is successfully implemented, it will only be a matter of time before it becomes the industry norm. This seems unlikely, given the poor adoption of the basic P&C by the industry as a whole.
Much the most important reason for preventing deforestation is to preserve biodiversity, which should be covered by the RSPO’s HCV criteria. However, revisions to the RSPO criteria and alternative schemes have placed more emphasis on carbon stocks and CO2 emissions, without recognising that CO2 emitted in one area can be sequestered in another, whereas lost biodiversity is irreplaceable.
The POIG criteria include the exclusion of HCS forest, with high density, low density and young regenerating forest all considered as potential HCS forest. Peat areas are also totally excluded, regardless of soil depth. The RSPO defines low carbon stock areas as those with carbon stocks where the losses on conversion would be no greater than the carbon stock in the new development, over the period of a rotation. The life time-averaged above-ground carbon in an oil palm plantation is between 25 and 50 tonnes/ha.
The SPOM moratorium on forest clearance makes no allowance for the urgent need for economic development in some countries. Thus the situation in Liberia described by Jonathan Porritt has arisen, where the government has approved an oil palm development, a well-established RSPO member-company is willing to invest, and villagers have given FPIC and are desperate for the employment and other benefits that a plantation will bring. However, the land was once forested, so even though most has been logged or cleared for shifting cultivation or charcoal production, the moratorium on forest clearance still prevents development. Porritt showed clearly how socially unacceptable this is.
As POIG and the HCS approach have not defined a carbon stock threshold, the growers should do this. The threshold needs to take into account the local need for development. Thus for countries such as Liberia, a figure of 60 tonnes/ha could be adopted; if the local value for oil palm turns out to be lower than this, any discrepancy is easily justified in terms of the social value of development. In Indonesia or Malaysia, on the other hand, the pressure for development is predominantly financial, not social. A lower value of 30 or 35 tonnes/ha would push companies towards previously deforested land.