15. 12. 2015

Latest Chapter in the Palm Oil and Deforestation Saga

Today (Tuesday 15th December) in London, we’ll be launching our Report on High Carbon Stock (HCS) forests, and the role of the palm oil industry in helping both to identify them and then to protect them.

It’s a bit of a blockbuster, made up of three different elements: the Overview Report (which contextualises the whole story and provides a Summary of the Science Study itself); the Independent Report from the scientists commissioned to investigate how best to identify and protect HCS forests; and the 17 separate research papers that were commissioned to help put together the Independent Report.

The whole process has dominated my working life for the last couple of years! It all started when an influential group of companies in the palm oil value chain signed up to something called the Sustainable Palm Oil Manifesto, on January 6th 2014. The first decision those companies took was to commission a Science Study to look in greater detail at the complex question of the impact of the industry on still unacceptably high levels of deforestation in countries like Indonesia.

It’s been controversial from start (with some NGOs instantly – and somewhat provocatively – condemning both the Manifesto and the Science Study as ‘greenwash’) to finish – in that I know only too well that our conclusions and recommendations will not please everyone. For me, it’s turned out to be the most engaged and stimulating ‘test’ of my passion for the whole concept of sustainable development – as in ‘a fully integrated approach to optimising social, economic and environmental outcomes’.

There are lots of people out there who don’t go with that kind of sustainable development framing – including a lot of environmentalists on the one hand, and a lot of business people on the other, whose narrow environmental and business interests prevent them from seeing any kind of wider picture. These voices, on both sides, dominate the palm oil debate, defaulting effortlessly to crude polarisation rather than seeking to establish genuine common ground.

That common ground indisputably exists – and the whole point of our Science Study has been to delineate what it looks like. In effect, to redefine the ‘licence to operate’ that the palm oil industry needs to prosper in the future. I’ve tried to summarise that in the simple Narrative that you’ll find at the end of this piece.

But I’m jumping the gun! Let’s start with a few opening propositions:

1. Palm oil is a versatile, relatively inexpensive vegetable oil used in tens of thousands of products all around the world. Demand for vegetable oils is growing by around 5% per annum.
2. It’s better to meet that demand with sustainably produced palm oil than with any of its competitors (sunflower, rape seed or soybean oil), simply because far fewer hectares of oil palm are needed to produce the same volume of oil.
3. The massive growth in oil palm development over the last 40 years or so has generated significant economic benefits – both for nation states and for local communities. But this has come at a considerable price – in terms of environmental damage, forest loss, and negative impacts on some communities and indigenous people.
4. Since the establishment of the Roundtable on Sustainable Palm Oil (RSPO) in 2004, the industry has been seeking to address those issues – and substantial progress has been made since then. 20% of all palm oil traded globally is now certified as sustainable by the RSPO.
5. But the industry remains controversial – primarily because of the threat that new oil palm development poses to forests in Indonesia, as well as in a number of countries in Africa and South America.

Hence the deceptively simple question that our Science Study was commissioned to address: is it possible for the palm oil industry to meet that growing demand without causing unacceptable damage to forests, the environment and local communities?

To which our answer is a resounding ‘yes’ – but only on certain conditions, as captured in my simple HCS+ Narrative – HCS+ being the methodology for new oil palm development that we are proposing.

The most controversial part of that methodology is that we are not persuaded by those advocating ‘zero deforestation’, just as we are not persuaded by those who are advocating that countries should be able to develop new oil palm plantations where and when they want. Any new oil palm development has to be done: 

- On a carbon neutral basis, with net zero emissions of greenhouse gases.
- In a way that causes no deforestation of any High Conservation Value or any High Carbon Stock forest.
- In a way that ensures the active management and protection of all forest areas set aside in that mannner.
- In a way that shares the wealth created from palm oil more equitably with communities and smallholders.

That’s a tough set of demands which will severely limit new oil palm development in forested areas, and will further encourage existing efforts on the part of palm oil companies both to increase yields on their existing holdings, and to make use of already degraded land – both are indeed preferable alternatives, but neither is anything like as easy as it sounds.

So this is not a ‘zero deforestation’ position; it’s a ‘net zero emissions’ position. For us, what matters more is not each and every hectare of forest, but each and every tonne of CO2 emitted into the atmosphere. And it’s only a carbon neutral approach that can deliver net zero emissions. Paradoxically, a zero deforestation position (which is, in effect, a zero new development position) cannot deliver that, because it all but guarantees that high levels of forest degradation and illegal encroachment in those forests will continue.

These conclusions are based on 18 months worth of work, drawing on the expertise of more than 50 scientists, after two rounds of public consultation, engagement with a wide range of stakeholders in Government, business and civil society, and constant input from all the members and observers on our Steering Committee. To continue to describe such an intensive study as ‘greenwash’, as some will no doubt be inclined to do, would be extremely regrettable. All NGOs now have a crucial role to play in helping the industry to move forward.

As I said at the start, only 20% of today’s globally traded palm oil is certified as ‘sustainable’, which means there’s still a very long way to go. The primary responsibility for achieving the RSPO’s 100% target for the EU lies, of course, with the industry itself – with both the individual companies and their trade bodies. But governments have an absolutely critical role to play in supporting the move towards sustainable palm oil in their own jurisdictions, incentivising companies that are taking the lead, and punishing those that are still breaking the law.

And finally, we all have a part to play as well – by being better informed about palm oil, and by demanding that all consumer goods companies should use only Certified Sustainable Palm Oil.

But here’s the rub. That means that those companies should also be prepared, from now on, to pay more for sustainable rather than unsustainable oil, through a proper premium. Doing oil palm well, as described in detail in our Report, costs more than doing it badly, both in terms of increased set-up costs (securing Free, Prior and Informed Consent from local and indigenous people, doing detailed environmental and social assessments, carrying out proper carbon mapping etc), and increased operating costs to pay for certification, carry out audits, commit to the ongoing protection of set-aside forests and so on.

Most consumer goods companies, to be honest, are far less supportive of these measures in practice than their rhetoric might lead you to believe. One of the most worrying statistics in all this controversy is the fact that only half of that Certified Sustainable Palm Oil is actually purchased as such – the rest just goes into the undifferentiated supply chain for uncertified palm oil. What’s more, the premiums that they pay for that 10% are negligible, and often driven down further by extremely aggressive negotiations with the palm oil producers.

There’s a lot of what I can only describe as ‘institutionalised hypocrisy’ on the part of many of these companies. Our message to them is simple: you can’t go on getting something (as in more sustainable palm oil) for next to nothing, which is what many of you are still trying to do today.

Which is why I’d love to see just a fraction of today’s campaigning zeal around palm oil focussed on all those companies who talk all sustainable about palm oil, but do little if anything to reflect that in their procurement practices.

As I’ve said before, this is a complex world!

THE HCS+ NARRATIVE

 

We are recommending

that
a new development model
for the oil palm industry
should be phased in over the next three years
based on:

• The full and rigorous implementation of
existing standards (RSPO etc) and
existing assessment tools (eg Free Prior and Informed Consent);

• A carbon neutral approach to all new oil palm development,
after application of a strict threshold
defining High Carbon Stock (HCS) forest;

• The active and ongoing protection
of all forest set-asides,
either High Conservation Value (HCS) forest or HCS forest;

• A stronger Social Contract
to share the value created by companies
more equitably with local communities, employees and smallholders;

• A clear commitment to multi-stakeholder planning,
and more transparent governance processes
based on consistent
Monitoring, Reporting and Verification;

within an
integrated sustainable development framework.

In other words, HCS+ is all about a development model
that minimises deforestation
through equitable, transparent, conflict-free and carbon neutral
oil palm development. 

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Comments

22. 12. 2015
Euan Hagger

Why no critique of RSPO? Investigations by the likes of Greenpeace and EIAInvestigator cast sustainable palm oil certification in an extremely poor light, to say the least. EIAInvestigator goes so far as to suggest a dereliction of duty on the part of RSPO, pointing to fundamental failings in the audits on which certification is based. There appears to be very little reason to trust the sustainability of RSPO certified palm oil based on the findings of these investigations. Palm oil's journey from plantation to the consumer is essentially untraceable unless it is segregated, but the vast majority of trade is mass balance/ unsegregated. So how can consumers have confidence that the palm oil in products on supermarket shelves is sustainably derived?

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