Carrots, Sticks and Palm Oil
This article appeared in the November 26 issue of Tempo's English edition under the title "Carrots, Sticks and Palm Oil".
Outside the Santika Hotel and Convention Center in downtown Medan, North Sumatra, hundreds of people were protesting in the rain. They had come together under the auspices of Serbundo, an alliance of Indonesian unions and community organizations. The signs amid the crowd expressed discontent at various aspects of the palm oil industry. One of them said Wilmar, the agribusiness giant, should be kicked out of the Roundtable on Sustainable Palm Oil (RSPO).
Inside the Santika, where the RSPO had earlier that day commenced its 11th annual meeting (RT11), held November 12-14, about a dozen Serbundo leaders marched into a third-floor conference room and sat around the table. Journalists flocked in after them, packing the tiny space. Soon they were joined by a pair of RSPO officials, and then by Darrel Webber, the RSPO secretary-general, a plump, bespectacled Singaporean dressed in a suit.
Dripping wet, the Serbundo representatives took turns reading out a prepared statement with a list of demands. Webber listened. Then he stood up and spoke. The RSPO was a work in progress, he said. "Every day we try to be better than yesterday," he told them. "So with this kind of input, we hope to be better tomorrow.
It was one of the livelier moments of the conference, and one that alluded to the obstacles faced by the RSPO as it tries to establish its brand of 'sustainable' palm oil as the industry norm. Critics have assailed the body for setting lax standards and for failing to uphold even those. At stake is the RSPO's credibility, crucial if it is to be seen as a trustworthy guarantor of sustainability rather than as a tool for palm oil companies to greenwash their operations.
"I think that's the issue," global food security expert Tim Benton told Tempo before delivering the RT11's keynote speech. "If there are increasingly reports that the RSPO is not delivering sustainability in all of its metrics, especially environmentally and socially, the whole label will fall into disrepute."
The RSPO includes companies and NGOs from the industry's seven sectors--growers, processors or traders, manufacturers, retailers, banks, environmental NGOs and social NGOs. Its premise is that market forces can be used to conserve the world's remaining forest ecosystems. If enough consumers demand sustainable products, the thinking goes, growers will be forced to bring their operations up to par.
The main way the RSPO works is by certifying individual plantation operations, allowing traders, manufacturers and retailers who source them to market their own products as supporting Certified Sustainable Palm Oil (CSPO).
More generally, all members, no matter where they exist in the supply chain, are supposed to have a plan for achieving sustainability in their operations and show progress on it annually.
From the RSPO's perspective, the main issue now is that world CSPO supply outweighs demand, with growers producing more of the stuff than traders, retailers and end users are willing to pay extra for.
But the real problems, critics argued, were systemic within the RSPO itself. Some said the certification process was compromised. Others said the RSPO had generally failed to enforce its standards.
"People put their expectations quite high on the RSPO," Bustar Maitar, a campaigner with Greenpeace, which is not a member, said last month in a debate with Webber and others, the video of which was posted to YouTube. "But the reality on the ground is telling a different story."
'Pay the piper, play the tune'
One of the RSPO's most glaring deficiencies, critics say, lies in the audit process. Growers seeking certification pick their own auditors and cover their costs. The grievance process works in a similar way.
The issue came sharply into focus in 2011, when a Wilmar subsidiary in dispute with a community in Jambi was alleged to have employed the local police to chase people from their houses, said Marcus Colchester, senior adviser with the Forest Peoples Programme, an RSPO member. Mobile Brigade (Brimob) officers reportedly guarded company officials while they bulldozed 83 dwellings.
The company, Asiatic Persada, brought in an RSPO-approved certification body (CB), TUV Rheinland Indonesia, to ascertain the validity of the complaints. TUV Rheinland produced a report suggesting nothing serious had happened.
"We, knowing it was not true, made our own field visit," Colchester told Tempo. "We were able to demonstrate that the community members' houses had been bulldozed into the creek, that some people had been injured and that they had used the police."
The operation never should have been certified in the first place, he added. The RSPO does allow certification where the company is in conflict with the local community, provided both parties are working on a plan to resolve the dispute. In practice, though, the CBs, who are supposed to monitor the situation to ensure it is progressing, too often do not do their jobs. "Why? They get paid by the companies they certify," Colchester said. A better way, he added, would be for each company to pay into an escrow trust overseen by the RSPO secretariat, which would then appoint the CB itself.
Webber acknowledged the issue. "I guess maybe we should revisit this," he told Tempo. "I know the theory that if the guy pays you, the guy chooses you, you have a credibility issue." He pointed out that the RSPO employed an independent company, Germany-based Accreditation Services International, to oversee the system. But Colchester said it was not enough. "The system they're overseeing does not break this direct link which needs to be broken," he said.
That the issue had not been remedied despite its having been discussed at the highest levels of the RSPO reflected its members' priorities. "There has been less enthusiasm about this from the main producers who like the convenience of being able to choose their auditors," Colchester said.
"He who pays the piper plays the tune," he added.
Quantity over quality
In the conference room at the Santika, Nurman Nuri, leader of the Suku Anak Dalam group in conflict with Asiatic Persada, implored Webber to revoke Wilmar's membership. "Wilmar has tarnished the good name of the RSPO in the eyes of the world," he declared.
A perceived reluctance by the RSPO to enforce compliance with its standards has been another sticking point. Greenpeace said in a recent report that the body seemed wary of taking action against rule breakers.
At one RT11 session, an RSPO representative stood up and said the body was not a policing organization, said Areeba Hamid, a forests campaigner with Greenpeace. "I was a little concerned, frankly, when I heard that," she told Tempo. "Because if they can't police them..."
Adam Harrison, senior policy adviser from the World Wildlife Fund (WWF), a founding RSPO member, said in the debate with Greenpeace that there had been a few instances of members leaving or being asked to leave. "Maybe it's something we need to consider more," said Harrison, who sits on the RSPO's Executive Board (EB). "I would accept that."
The problem, said Irwan Gunawan, a director from WWF Indonesia, was that only a fraction of Indonesia's thousands of plantation estates held RSPO certification. If the RSPO set too-high standards with penalties to match, not enough companies would join, and the body would never become broad-based enough to transform the industry. "Our perspective is that the RSPO needs to embrace gradual improvement," he told Tempo.
That might have been true 10 years ago, Areeba said. But now the RSPO was a decade old. "So I think it's high time," she said. She rejected the notion that the need for inclusivity precluded raising the bar. "It also means you become the lowest common denominator."
Some RSPO members were not doing even the most basic things, Colchester said. Too many which had promised to source only CSPO by 2015 never really tried to reach that goal and were postponing their commitments. Meanwhile the RSPO had made no serious effort to enforce action. "They're trying to prioritize the market before they've actually got the quality," he said.
Kicking members out would be the easy thing to do, Webber said. But that was not how you got lasting solutions. "The moment they leave the RSPO, we can't do anything," he said. "It's more important for us to keep both parties at the negotiating table, no matter how difficult it is."
Greenpeace has accused some companies of 'hiding behind' their association with the RSPO, simply pointing to their membership when questions of sustainability arise. Meanwhile, these firms still did things like clear high-conservation value (HCV) forest in Central Kalimantan or source palm oil from companies involved in deforestation. "Some of those big multinationals are big enough where they don't really need the RSPO," said Benton, the food security expert.
Others have gone above and beyond the RSPO. To this end Greenpeace has spearheaded the Palm Oil Innovation Group (POIG). Its members, chief among whom are palm oil producers, pledge to adhere to stricter standards than that which the RSPO requires, including no deforestation and no peatland conversion policies. The POIG was officially launched at RT11.
The POIG is meant to complement the RSPO, not compete with it. RSPO officials said its formation was a welcome move. "It's good that people are talking about higher standards and putting pressure on it," Harrison said. Meanwhile it was still crucial for companies to work through the RSPO. "All these Greenpeace reports, they do acknowledge that RSPO is the benchmark, RSPO is the face," Webber said.
If the RSPO wanted to make a real impact--and maintain its credibility--all parties needed to step up, Colchester said. "There needs to be an overall raising of the game, from all the players," he said.