Borneo’s industry-environment balancing act

Deforestation in Indonesia has led some to demand tighter standards for the multi-billion-dollar industry.

Palm oil is used in a wide range of consumer products – from margarine to sweets, soaps to cosmetics [EPA]

Kuala Lumpur, Malaysia – The island of Borneo is on the front line of an ongoing struggle to find a balance between the environment and commerce.

Borneo is home to an incredibly diverse ecosystem in one of the oldest rainforests in the world. But it is also home to a booming palm oil industry, which is considered to be a major contributor to deforestation.

In West Kalimantan province, in the Indonesian section of Borneo, Karmele Llano Sanchez takes in at least 20 new orangutans every year at a centre for endangered primates.

“The numbers are increasing,” Sanchez, the programme director for International Animal Rescue (IAR), told Al Jazeera in a telephone interview. “They are always increasing.”

At one time, Sanchez was hopeful that the Roundtable for Sustainable Palm Oil (RSPO) would succeed in its goal to make plantation companies more responsible and slow the pace of deforestation. But orangutans continue to be driven from their treetop homes.

Over the past four years, Sanchez has lodged a number of complaints about oil palm companies that she said are breaching the conditions of their RSPO membership. “It’s going very slowly,” she said. “We believe that they continue to do things that contravene the principles and criteria of the RSPO.”

Creating standards

The RSPO began 10 years ago as an initiative between NGOs such as the World Wildlife Fund, planters, mills and traders to improve sustainability in the multi-billion dollar palm oil industry, and to make companies do business more responsibly.

Now, the RSPO is facing criticism – not only from those who believe it is too weak, but also from those who think its standards are too stringent. “RSPO’s biggest challenge is to evolve as a standard for all palm oil producers,” Reza Azmi, executive director of Wild Asia, an environmental group that works with palm oil smallholders, told Al Jazeera.

“The standard – the way it’s managed and its codified rules – will need to adapt to accommodate smaller producers, producers from emerging palm regions, and grow to be a minimum standard for all; not an exclusive club of large, publicly listed corporations.”

Since 2004, the RSPO’s membership has expanded rapidly and includes some of the world’s top plantation companies such as Malaysia’s Sime Darby and leading buyers like Singapore-based commodity trader Wilmar. 

“One of the key indicators of how much we have done is that today, 18 percent of crude palm oil is certified as sustainable,” the organisation’s Secretary-General Darrel Webber said. “We have 1,800 members spread over 72 countries, when the founders were between five and seven.”

Governing edible oil

RSPO members will gather in Kuala Lumpur, Malaysia this week for an annual meeting to discuss, among other things, the implementation of the more stringent standards agreed upon last year, an improved complaints process, expansion into Africa and India, and ways to help smaller growers meet the sustainability measures.

But some say the RSPO does not go far enough in governing the edible oil that has become ubiquitous in everyday life. Palm oil is an ingredient found in foods, such as ice cream and doughnuts, and a crucial component of soap, shampoo and cleaning fluids.

Although the WWF backed the new criteria – which took two years of discussion and compromise – it also noted its disappointment at the outcome in a public statement. While it has not abandoned the RSPO, the WWF has called on what it termed “progressive” companies to meet higher standards.

Greenpeace went further. In a highly critical report, Certifying Destruction, it said palm oil was the single largest driver of deforestation in Indonesia between 2009 and 2011, and three-quarters of deforestation in West Kalimantan province could be blamed on the industry.

The report accused the RSPO of leaving its members “free to destroy forests”, and argued the lack of supply chain traceability allowed companies to “launder” what it called dirty palm oil through the certified product.

Too demanding

Still, some industry insiders argue RSPO is dominated by Western NGOs and big buyers, and its stricter benchmarks are too demanding and expensive for smaller producers to implement.

“Suddenly the market realised that even with RSPO certification, the criticism of palm oil or certified producers did not go away. We now have many major buyers investing in their own ‘supply chain’ investigations and communicating ‘zero deforestation’ policies.” – Reza Azmi, Wild Asia

“Nothing is being done to be inclusive enough for the small farmers to be able to qualify and send their oil to the big boys and have good market access to Europe,” Yusof Basiron, chief executive of the Malaysian Palm Oil Council, told Al Jazeera in an interview at his office in the suburbs of Kuala Lumpur. 

“You want to get these small farmers to adopt RSPO, you need an army of agents to educate them and enough money to get them on board.”

Instead, Malaysia, the world’s second-largest producer of palm oil after Indonesia, has been developing its own standards. MSPO, as the standards are known, will launch in January. “We want a more professional, unbiased way of developing standards,” Yusof said, claiming that RSPO discriminates not only against small-holders, but developing countries generally. Indonesia, too, has created its own national benchmark.

But the push for more demanding standards continues to gain momentum. While remaining within RSPO, WWF and Greenpeace have set up the Palm Oil Innovation Group – designed to raise the bar further by committing companies to the protection of both primary and secondary forest, stopping the expansion of plantations on peat land, and creating a mechanism to trace the origins of the oil.

“Since mid-2013, I have seen a major shift,” said Wild Asia’s Azmi. “It appeared that suddenly the market realised that even with RSPO certification, the criticism of palm oil or certified producers did not go away. We now have many major buyers investing in their own ‘supply chain’ investigations and communicating ‘zero deforestation’ policies. I fear that RSPO may simply be side-stepped.” 

Last December, Wilmar, which controls about 45 percent of the global palm oil trade, announced its commitment to zero deforestation. The breakthrough came six months after smoke from peat and forest fires in Indonesia shrouded both Singapore and Malaysia in a choking haze that pushed air pollution to hazardous levels in some areas, and forced the closure of schools.

Not demanding enough

The decision was the biggest breakthrough yet for the groups pushing companies to commit to higher standards.

“The RSPO doesn’t go far enough,” said Forest Heroes’ campaign director Deborah Lapidus. “It just requires the protection of untouched, primary forest, but still allows for clearance of secondary forest, which contains a lot of carbon stock and endangered animals. And RSPO does not prohibit the draining of peat lands.”

Just one-year old, Forest Heroes aims to raise awareness among Western consumers about palm oil and its effects on the environment, targeting big buyers of palm oil to convince them to commit to zero deforestation. In October, New York-based trader Bunge, whose clients include doughnut maker Krispy Kreme, became the latest to promise zero deforestation.

“I have seen a sea change in the industry over the past year or so,” Lapidus said. “And it’s precisely because we decided that RSPO was irrelevant.”

But the RSPO’s Webber insisted the organisation continues to have an important role. 

“The RSPO’s not just about a standard,” Webber said. “We are about transparency. We add credibility. We are an avenue to seek recourse. We have global maps of our certified members that you can see online now, check where they are, whether they’ve deforested in the past.

“No other commodity, I think, has done the same. It’s only palm oil that’s done it and it’s palm oil through the RSPO that’s done it,” he added.

Although just one company has been expelled from RSPO since its inception, Webber said the threat of expulsion remains.

However, he added it is better for companies to work within the system than outside it.  

“We do terminate and we do suspend,” he said. “But we try our best to mediate. Conflicts do not stop if we terminate a member. Conflicts will stop if a member operates within our framework and starts engaging with affected parties.”

By Kate Mayberry

Original link: