06. 03. 2016

Palm Oil Politics: All Eyes on Jakarta

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The wondrous world of palm oil is never far from my mind. After nearly two years of intensive engagement in seeking to reconcile conflicting views about the thorny issues surrounding deforestation, every new announcement from the front line in South East Asia instantly grabs my attention.

The Roundtable on Sustainable Palm Oil (RSPO) has itself been much in the news of late. At its annual gathering in Kuala Lumpur last year, members passed a new policy trying to get to grips with the problem of ‘No Palm Oil labels’ that have become so common in countries like France and Belgium, as well as in Scandinavia – as I saw for myself when visiting Oslo last year. This is what the policy says:

‘Members of RSPO must not make claims which imply that the removal of palm oil from a product is a preferable social or environmental sustainability outcome to the use of RSPO certified sustainable palm oil. Moreover, members shall seek to promote, and not to denigrate, the aims and goals of RSPO, namely the production and use of RSPO certified sustainable palm oil.’

Fair enough, if you ask me. By failing to discriminate between bog-standard, unsustainable palm oil and sustainable palm oil (which costs more to produce), these labels are clearly undermining the whole purpose of the RSPO. So why would any member of the Roundtable be doing that?

I think it’s because they’re deeply hypocritical. Big retailers like Delhaize in Belgium and Casino in France claim to be interested in sustainability, but when they can curry favour with anti-palm oil NGOs, they leap at the opportunity – thereby undermining all the good work being done by those companies that are committed to certification through the RSPO, either as growers or as buyers.

Even Greenpeace and the Rainforest Action Network sprang to the defence of Ferrero (one of the best of the buyers for many years) when it was attacked last year by the French Environment Minister, Ségolène Royal, suggesting that consumers should boycott their products. As the NGOs pointed out, this could only have negative consequences, as we simply have to make things work for the good guys, not penalise them.

So I just wonder when the RSPO is going to expel those companies that are still explicitly breaking its own rules?

Probably not right now, as the big priority for the RSPO is to promote its brand new voluntary standard – RSPO Next. This is aimed at precisely those good guys who want to go further than the current mandatory requirements to secure certification. All companies going for RSPO Next will have to sign up to a number of additional commitments: no development on peatland, no burning, monitor and reduce over time emissions of greenhouse gases from plantations, traceability of their oil all the way back to the individual plantation, and ‘a blanket ban on deforestation’.

As dutiful readers of this blog will know, any such commitment depends on how you define ‘deforestation’. And I was pleased to see that the RSPO’s definition is not in the ‘zero deforestation’ camp (as favoured by NGOs like Greenpeace and Rainforest Action Network), but more along the lines of the ‘net zero carbon’ as recommended by the High Carbon Stock Science Study – the initiative which kept me so busy over the last two years!

That’s helpful for those companies that committed to trial the recommendations of the Study when it was published in November last year. So far, only Sime Darby has confirmed its readiness to undertake a trial (in Liberia), but announcements are expected shortly from KLK, IOI, Musim Mas and Cargill, following up on pledges made at the launch.

Wilmar is also interested in seeing what this all means for them. It has just brought out its ‘one year on’ report on its ‘No Deforestation, No Peat, No Exploitation Policy’. And an impressive document it is too, showing real progress on traceability, supplier compliance (Wilmar is a huge company, with over 1,000 suppliers), and support for smallholders. They’re by no means perfect, and the accompanying commentary from the consultant Glenn Hurowitz (the scourge of all palm oil companies that fall short of the highest standards) walks a fine line in both encouraging and scolding at the same time: 

‘Global agriculture, including Wilmar, still has a long way to go. NGOs continue to find some suppliers clearing forests and abusing community rights. Wilmar deserves credit for responding quickly to most of these grievances. They’ve worked hard to improve supplier performance, and have been willing to cut off rogue companies when engagement just isn’t working. But there are still too many breaches, showing the need for more education or more rigorous sanction.’

But even a company as big as Wilmar can’t ignore the sovereign rights of governments to determine their own land use strategies. And here all eyes are on Indonesia, where rumours abound that the government is about to compel all those companies that signed up to the Indonesian Palm Oil Pledge in 2014 (including Wilmar) to defer or even to withdraw their ‘zero deforestation’ commitments – on the grounds that this commitment is significantly disadvantaging smaller companies and smallholders.

That would be a massive backward step, putting at risk much of the good work that has been done by the industry in Indonesia over the last ten years. The reaction to such a move from the international community would be extremely hostile – and rightly so. And all for lack of a somewhat more pragmatic approach to deforestation, where both the federal government and the provinces would be able to put the emphasis on net zero emissions rather than the unattainable absolute of zero deforestation – as in ‘not one tree down’.

So let’s hope that wiser voices prevail in Jakarta. The USA is actively involved in the diplomacy here, and has significantly ramped up its commitment to help restore peat and conserve Indonesia’s forest. President Jokowi himself is well aware of how high the stakes are, having just signed another partnership agreement with Norway offering $50m to support the work of the Peat Restoration Agency. The Agency was set up by Presidential decree in January after the devastating wildfires in 2015, which destroyed around 2.5 million hectares of forested land – and put Indonesia right at the top of nations with the highest carbon footprint.

Jokowi has yet to pass the regulations which will be required to establish a proper legal framework for peat protection. At the same time, he still has to deal with an extremely influential faction of industry and political powerbrokers who want his government to resist pressure from the West and to reassert Indonesia’s sovereign right to determine the use of its natural resources as it sees fit – this being just the latest twist of a very old story.

The priority has to be on avoiding another horrendous ‘burning season’ later in the year. The big oil palm companies can play an important role here – Sime Darby, for instance, has committed to help all smallholders within a 5k radius of its plantations in Indonesia to avoid the need for clearing new land through burning. But the reach of these companies is still limited, and it’s only government bodies (nationally, regionally and locally) that can make a real difference.

But here’s the rub. There are problems at every level. The government in Jakarta still hasn’t taken the absolutely basic step of allowing landholding maps to be published – without which it’s extremely difficult to tell who’s responsible for the fires and for continuing deforestation.

And at the provincial and local level, it’s often government officials that have been the principal beneficiaries of earlier land clearance, doing deals with smaller, unscrupulous companies that couldn’t give a damn about Western consumers, let alone the RSPO.

But there’s a myth that needs to be dispelled here. Most smallholders don’t support further deforestation. In September last year, Mansuetus Darto, leader of the Oil Palm Smallholders Association, made it very clear that his members support the commitment from big companies to put an end to deforestation – primarily because those companies can then focus on working with smallholders to improve yields. Doubling or even tripling yields is perfectly possible – and a far better route to increased prosperity for smallholders than simply trying to clear more land.

All the big companies are on the same page here – as research has shown since the fires last year, they’re not the cause of the fires. Indeed, companies like Sime Darby and Wilmar are constantly raising their game, particularly in terms of transparency and traceability. The new Sime Darby Dashboard has established a new benchmark here, and let’s hope others will be quick to follow.

There’s so much goodwill out there, with so many people now intent on securing lasting solutions to these critically important challenges. But there’s always some new crisis that seems to get in the way – which, in my opinion, makes the RSPO’s work all the more important at this time.

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