The Race Is On

Developments within the EU
As noted, the RSPO is moving forward with the development of its revised P&C – a process that includes stakeholders (including those based in Europe); committee and task force involvement; and public consultation. Curiously, the EU now appears poised to create its own set of governmental, and hence mandatory, palm oil standards.

A European Parliament ‘Resolution on Palm Oil and Deforestation of Rainforests’, adopted on April 4, 2017, notes the existence of voluntary certification schemes including the RSPO standard, the Indonesian Sustainable Palm Oil (ISPO) standard and the Malaysian Sustainable Palm Oil (MSPO) standard. The Resolution, however, claims that these sustainability criteria ‘are the subject of criticism especially with regard to ecological and social integrity’.

The Resolution emphasises that the existence of different schemes is confusing for consumers. It states that the ultimate objective should be the development of a single certification scheme which would improve the visibility of sustainable palm oil for consumers. The Resolution then calls on the European Commission (EC) to ensure that such a certification scheme guarantees that only sustainably-produced palm oil enters the EU market.

Arguably, this aspect of the Resolution is paradoxical at best when the solution proposed to address the issue of ‘confusion for consumers’ is to produce yet another scheme. This would definitely be the case should the EU decide to unilaterally develop its standard and add it to the plethora of existing schemes, whether voluntary or mandatory.

The logical solution should be to take part (multilaterally and/or plurilaterally) in the revision, modernisation and harmonisation of existing standards and their criteria, rules and procedures. This would enable the end result to become the overwhelmingly applied standard worldwide and thus decrease ‘consumer confusion’.

Nonetheless, in the Resolution, the European Parliament goes further. In its list of Recommendations, it again acknowledges ‘the positive contribution made by existing certification schemes, but observes with regret that RSPO, ISPO, MSPO and all other recognised major certification schemes do not effectively prohibit their members from converting rainforests or peatlands into [oil] palm plantations’. The Resolution calls on the EC to ensure that independent auditing and monitoring of the schemes is carried out.

Most notably, the Resolution calls for the EU to introduce minimum sustainability criteria for palm oil and products containing palm oil, on the basis of six assurances – that palm oil entering the EU market:

1. Has not led to ecosystem degradation, such as deforestation of primary and secondary forests and the destruction or degradation of peatlands or other ecologically valuable habitats, whether directly or indirectly, and does not cause a loss in biodiversity, foremost of all endangered animal and plant species;
2. Has not given rise to changes in land management practices, which have negative environmental impacts;
3. Has not given rise to economic, social and environmental problems and conflicts, including the particular problems of child labour, forced labour, land grabbing or the eviction of indigenous or local communities;
4. Fully respects fundamental human and social rights, and is in full compliance with adequate social and labour standards designed to guarantee the safety and well-being of workers;
5. Enables small-scale oil palm cultivators to be included in the certification system, and ensures that they receive their fair share of profits; and
6. Is cultivated on plantations that are managed using modern agro-ecological techniques in order to drive the conversion to sustainable agricultural practices so as to minimise adverse environmental and social outcomes.

Moreover, instead of supporting the RSPO, the ISPO and/or the MSPO, the Resolution appears to endorse the standards developed by the Palm Oil Innovation Group, but does recognise the RSPO Next standard. Lastly, the Resolution calls for enhanced traceability requirements for palm oil entering the EU market.

Logical option
It is important to emphasise the illogical nature of the European Parliament’s proposal, given the ongoing standardisation work by the RSPO and by the governments of Malaysia and Indonesia as the main palm oil producing countries.

The assurances requested by the European Parliament for palm oil entering the EU market would likely already fall within the scope of RSPO standards – be they the P&C, enhanced standards such as RSPO Next, or the revised P&C due in November.

Indeed, the RSPO committee process includes stakeholder engagement, while at least one task force has already been formed, and there is scope for future public consultations. European RSPO members should make clear to their respective government representatives at the EU level that they will be actively involved in these efforts.

They must also argue that the creation of a ‘Eurocentric palm oil sustainability standard’ would be a waste of taxpayers’ funds, given that there is a more logical option. This would involve working with the RSPO and palm oil producers, ideally represented by the Council of Palm Oil Producing Countries.

Together, they could develop a truly international and multilateral sustainability standard that is governmental in nature, mandatory and duly representative of the environmental, socio-economic, industrial and commercial interests at stake.

If, however, a race to the next global palm oil sustainability standard were to be launched, major palm oil producing countries must step up and ensure that their own standards are accepted worldwide. Arguably, they are the natural catalysts to trigger this process and to drive the scientific, socio-economic and commercial negotiations that must define a global palm oil sustainability standard.

No unilateral EU impositions should occur. In an interconnected and globalised world, ‘unilateral’ is definitely not sustainable and all too often synonymous with protectionism and trade wars.

FratiniVergano
European Lawyers