Despite Flaws, Commodity Eco-labels Contribute to Sustainability (Commentary)

  • While eco-labels may have failed to stop deforestation of many agricultural commodities, they are nevertheless contributing to the sustainability of commodity production, argues Matthias Diemer, a trained ecologist who owns a consultancy in Switzerland focusing on sustainability in agricultural commodities.
  • Diemer says that reports by Greenpeace and other watchdogs are important to raise the bar for eco-labels, but dismissing voluntary certification and placing the onus for change on governments is naive and risks losing the potential benefits of certification.
  • Instead eco-labels should be appraised on realistic expectations of their potential impacts, writes Diemer.
  • This post is a commentary and does not necessarily reflect the views of Mongabay.

In a recent report entitled “Destruction: certified” Greenpeace concluded that “certification is not a solution to deforestation, forest degradation and other ecosystem conversion”. Although Greenpeace acknowledges some positive impacts of labels, such as organic food or FSC, the overall conclusion is: “many of these certification schemes enable destructive businesses to continue as usual.” Is all hope lost for FSC, RSPO or Rainforest Alliance? Clearly, there is room for improvement for all eco-labels, which is why many embrace continuous improvement in their theories of change. And it is true that some have become seemingly complacent or unwilling to sanction members that violate rules. That is why watchdogs such as Greenpeace are so important.

Forest illegally cleared for oil palm in Riau Province. Photo by Rhett A Butler
Forest illegally cleared for oil palm in Riau Province. Photo by Rhett A Butler

However, the criticism of certification’s apparent inability to put an end to deforestation and exploitation raises three fundamental questions:

1. Are certification schemes able to stop deforestation and exploitation?

Looking at palm oil, the short answer is: Perhaps.

The success of an eco-label is often measured by its share of the global market. The RSPO certification scheme has a market share of 19% of global palm oil production. However, both certified production volumes and production area of RSPO certified operations seem to be leveling off. Explanations for this trend could be that palm oil producers are discouraged by the stagnating demand for certified palm oil or by the more demanding sustainability requirements of the 2018 Principles and Criteria.

Contrast this with POIG, which Greenpeace considers the “best in class add-on to RSPO”. The market share of POIG verified palm oil is only 1% and POIG membership consists of merely three palm oil producers. Clearly the rigor of the POIG criteria deters other producers from joining.

Interior of an oil palm plantation in Indonesia. Photo by Rhett A. Butler.
Interior of an oil palm plantation in Indonesia. Photo by Rhett A. Butler.

So perhaps the lesson learned here is: The stronger or more rigorous a standard is, the lower its potential impacts both with respect to the global market share, as well as deforestation or exploitation. So how much can 19% of global palm oil production certified by RSPO contribute to palm-oil induced deforestation and exploitation? Its contribution is clearly limited, although RSPO needs to do a better job to sanction errant members and it should make headway in expanding its scope and outreach under the “shared responsibility”-approach. Nevertheless, RSPO has helped to raise the bar on overall sustainability, by provoking the development of other (weaker) eco-labels, such as ISPO or MSPO.

2. How can certification be expected to work in a vast conventional and leakage market?

With RSPO capturing roughly 20% of global production, the remaining 80% is produced under eco-labels that Greenpeace considers inferior to RSPO, or entirely without certification.  Since there is a significant demand for uncertified oil in the market, producers and buyers always have a fallback option for selling and buying “cheap and dirty” palm oil, produced with disregard for No Deforestation, no Peat and no Exploitation (NDPE) requirements. Reports by RAN/Leuser Watch and Eyes on the Forest show how illegal palm oil produced in protected areas is trafficked over large distances and continues to enter global supply chains.

As long as such leakage markets exists and there are no strong disincentives to discontinue deforestation and exploitation, it will be difficult for certification schemes like the RSPO to expand their impact. Hence rather than highlighting the shortcomings of the RSPO, Greenpeace and other NGOs should invest some of their campaigning capacity to expose the “worst-of-the worst” operators and their connections to global palm oil trade.

3. Can governments do the job?

Clearly leakage operators which violate legal requirements, should be persecuted by government agencies. In their report Greenpeace conclude that rather than relying on certification schemes, governments should develop strong regulatory frameworks of their own “to clean up supply chains”. Taking into account the history of voluntary certification schemes this argument risks becoming circular. Why? Because certification was developed as a tool to fix many of the shortcomings of ineffective regulations, like poor enforcement, corruption, ambiguous or conflicting laws. Although there is some recent progress, it is questionable if most of these causal factors have been resolved in some of the producing countries during the past 30 years. Likewise, rigorous regulations by the EU will have limited impact, as Europe only imports roughly a quarter of global production, with the majority being used for biofuel. Assuming that palm-based biofuels may be phased out, the importance of the EU will further diminish.

European imports of palm oil, soybean oil, and oil 1990-2019 (Index with 1990=100). Data from FAOSTAT.

Looking ahead

What is undoubtedly needed to bring an end to commodity-derived deforestation and exploitation is a combination of approaches, including certification, regulations and a strong and growing consumer demand for sustainable products. Certification schemes need to be criticized and scrutinized. But by conveying the message to the public that they are greenwash and by suggesting that consumer goods companies develop their own rigorous systems (resulting in a plethora of sustainability claims), there is a real danger to confuse consumers, thereby weakening the demand for sustainable production, which sets us back to square one.

About the author: Matthias Diemer is a trained ecologist, and owns a consultancy in Switzerland focusing on sustainability in agricultural commodities. Previously he worked for WWF and in this function served as a founding member of the RSPO. He has been involved in POIG and various agricultural eco-labels.

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