10. 07. 2014

Sustainable Palm Oil: Another Step Along the Road

In the highly controversial world of palm oil and its impact on the world’s forests, a rather important thing happened on Tuesday. But I very much doubt that you will have heard much about it in the media.

Five of the world’s largest palm oil companies (Sime Darby, KLK, IOI, Musim Mas and Asian Agri), together with Cargill, issued their Sustainable Palm Oil Manifesto. In my opinion, it represents a huge step forward in terms of ensuring that new palm oil developments can be done in a way that dramatically reduces the threat to the world’s rainforests, puts an even higher level of protection on carbon-rich peatland, and locks in the interests of local communities and indigenous people.

All those involved deserve serious credit. Read it for yourself on the Sime Darby website.

You may be one of those that think that palm oil is an evil, planet-wrecking product that we should all be seeking to eliminate from the face of the Earth. Well, you’d be wrong. True enough, in the early days, huge environmental and social damage was done as the industry established itself in both Malaysia and Indonesia. But it’s an industry that has learned those lessons, and the best companies in the industry are now operating on the basis of completely different principles than were the norm in those early days.
Palm oil has become a vital ingredient in thousands of products that we all use (both in food and in home and personal care), and delivers those benefits with a lower environmental footprint than any of its principal competitors – primarily because they get so many more tonnes of palm oil per cultivated hectare than any of those competitors.

It’s time to declare a potential ‘conflict of interest’ before you think I’ve gone soft in the head. Forum for the Future has partnerships with both Sime Darby (the world’s largest producer of certified sustainable palm oil) and Unilever (the world’s largest single user of certified sustainable palm oil). Worse yet (in the eyes of some of the fiercest critics of the industry), I’ve agreed to chair a Committee that has been set up as a direct result of the Sustainable Palm Oil Manifesto, to help shed further scientific light on what kind of land (included forested land) is deemed appropriate for further palm oil development, and what kind of forested land should be off-limits for any further development.

We’re talking about low-carbon forest stock (ok) versus high-carbon forest stock (not ok). But, obviously, it’s not as simple as that!

By virtue of all the steadfast work done through the Roundtable on Sustainable Palm Oil (the RSPO - now in its twelfth year), palm oil growers have already agreed to put off limits significant amounts of forested areas on their concessions.

First, there’s what is called High Conservation Value: essentially, those areas of forest with high levels of biodiversity. Then there are the riparian strips – all the stuff that thrives along the edge of rivers and streams, of which there are a hell of a lot in the rainforest! And then there are all the tortuously negotiated agreements with local people which means that no development can proceed without their ‘Free, Prior and Informed Consent’.

In the early days of the surge in palm oil development in Malaysia and Indonesia, none of these things counted for a rainforest fig. The bulldozers went in willy-nilly, on any land that wasn’t too steep to get the bulldozers in on. But that was then – seriously bad times – and this is now. And this is an industry that has accommodated a host of wholly legitimate environmental and social concerns – primarily through the RSPO – to the extent that it really should be thought of as an industry transformed.

So what we’re talking about now is a fourth category of no-go: first, High Conservation Value; then riparian strips; then all the areas designated by local communities as being of significant cultural importance to them for various reasons. And now, areas of high carbon stock.

And what’s important about the Sustainable Palm Oil Manifesto is that those five growers have now agreed not to develop areas of high carbon stock – just as soon as there is an industry-agreed definition of what high carbon stock is, and what is low carbon stock.

Sounds so easy, doesn’t it? But that’s why this is still so controversial. The Steering Committee has been set up to determine ‘guideline thresholds’ as to what’s in and what’s out on the high carbon story – not just in terms of levels of carbon in biomass and soil, but taking into account the cultural and socio-economic conditions in which any new development is being proposed. Members of the Steering Committee (which comprises signatories to the Manifesto, plus Wilmar, a huge player in the world of palm oil) have undertaken to get the work done within a year from the point that the research programme commissioned by the Steering Committee commences – hopefully in September.

But here’s where it all gets rather difficult. For the principal NGOs involved (WWF, Greenpeace and Forest People’s Programme) that commitment, pending agreement on what people mean by high carbon stock, is simply not good enough. In that ‘interim period’ (when the study is still under way), they’re demanding that the growers, on a ‘precautionary basis’, should only plant on grassland or shrubland, and should declare a moratorium on all other forest land in their concessions – even degraded and logged-over forest. Not surprisingly (in my opinion), the growers have reacted to this as one exclusion too many, and are refusing to go beyond the already significant commitments that they have signed up to in the Manifesto.

Which explains why no NGOs have (as yet) signed the Manifesto, and why no NGOs have (as yet) accepted an invitation to become full members of the Steering Committee – which would mean, in effect, sharing responsibility for designing the research programme, appointing the consultants to do the work, and contributing all the way through to the final ‘synthesis report’.

And that’s where we are today. A classic stand-off, which we all (companies, NGOs and me) are still trying to sort out.

That’s obviously disappointing. But it’s still important to welcome the Manifesto into the world as a really important step forward.

I’ve no doubt I’ll be returning to this theme on a number of occasions over the next few months, simply because I see this as such a critical test of what full-spectrum sustainability (taking into account all environmental, social, cultural and economic factors, at the global, national and local level) means in practice.

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05. 08. 2014

Is it true that the Manifesto signatories have agreed amongst themselves to operate as a single block to ward off any external stakeholders' suggestions and demands, such that these stakeholders are now told "give it their best to push the Manifesto partners beyond what they have already fixed to agree on"?

The market place has already seen plenty of the typical Malaysian-style step-wise approaches to commitments to sustainability.

This only enables a business-as-usual practice on the ground whilst Malaysian businesses and politicians benefit from the most oddest forms of non-credible endorsements in the market place and in politics.

Will you allow this typical and - we ought to say - fairly successful Malaysian record to be played over and over again?

Just wondering, how well you understand the Malaysian political modus operandi.

Your former colleagues at Friends of the Earth have decades of experience. Have you consulted them, about the bigger picture?

17. 07. 2014
John Payne

Permit me to summarise what I believe to be a significant factor relevant to this story, and many others relating to "sustainable palm oil". As an RSPO environmental NGO member, in discussions with representatives of palm oil producers over the past few years (at formal RSPO group meetings and one to one), I would tend to divide those representatives into two groupings. One would be those who are able to see the big picture, including awareness of the motto "the customer is always right" and who wish to reach an agreed solution following a debate, with some degree of compromise. The other (sadly still the majority, exclusively middle aged and older men BUT – to be clear - some of these men belong in the enlightened group) who come armed with certainty that they are right (including the view that the grower, not the customer, is always right), and that their duty to their company “and to the industry” is to go to battle with people of different views (which would also tend to be women and younger men). In their argumentation, there is a BIG mystery here. Are they following company policy? Is this what the CEO or BoD have told them to say? Does the company indeed have any policy other than growing oil palm and fending off criticism (often by staying silent in public domain)? After three years, I still do not know. There is a problem here. The strength of RSPO is that all members are equal and that a discussion point cannot be agreed if there remains a sustained objection. Frankly, this means that some stupid and ultimately wrong decisions are made within the RSPO system (and/or, no decisions are made, and so problems drag on unresolved) – just because a small number of industry men with big egos sway the conclusion of a meeting involving maybe less than 20 people.
So, the underlying issue is : have the top decision-makers in the company (whether CEO level or Board or both) ever seriously discussed their corporate policy on sustainability? If they tried, did they get any independent views, including marketing experts, or just asked the older planters and "technical people" to brief them? Once this black hole is tackled, I think things would go alot more smoothly, both for those of us concerned over sustainability and forest loss, and the producers themselves.

11. 07. 2014
Robert Hii

Good piece.

Thanks for explaining the issues!

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