Palm oil partners ponder a challenging future

Palm oil partners ponder a challenging future

Members of the Roundtable on Sustainable Palm Oil (RSPO) gathered in London last week to discuss immediate and long-term challenges facing this multi-stakeholder coalition as it seeks to accelerate progress and build a sustainable global palm oil supply chain for the long term. Ben Cooper reports.

In spite of sharp criticism from some campaigners, the Roundtable on Sustainable Palm Oil (RSPO) is widely held to be one of the more robust and effective multi-stakeholder initiatives created to find a concerted solution to a pressing environmental issue.

At its European conference, held in London last week, it became clear that some daunting immediate and long-term challenges will have to be faced if this coalition is to sustain its success to date, not to mention address what have been identified as its weaknesses.

The conference began with a little self-congratulation as the organisation marks its tenth anniversary. Biswaranjan Sen, Unilever's vice president of chemicals and supply procurement and chair of the RSPO board of governors, reminded his audience that the organisation had swelled to a membership of 1,400 companies and organisations with RSPO-certified growers now accounting for 16% of global palm oil production.

The global palm oil statistics represent a mixture of good and bad news for RSPO members. Volumes of certified sustainable palm oil (CSPO) rose by 50% in the first quarter of 2014 and that 16% of global production amounts to some 9.7m metric tons of CSPO. However, currently only 52% of certified sustainable palm oil is purchased by the supply chain; the remaining 48% represents a net loss for those who have invested in the sustainable practices making certification possible.

As Sen commented, while the RSPO "has achieved much...NGOs, scientists and local communities continue to issue alarming reports about forest and biodiversity loss and social conflicts in areas where palm oil is grown". Sen pointed out that half of global deforestation is linked to just four commodity chains including palm oil. "It's clear this is not acceptable and we all need to eliminate deforestation," he said.

And it is not only deforestation that the RSPO was created to address. It is also committed to protection of peatland and creating "a positive social and economic impact" on people and communities in the areas where oil palm is grown.

Looking to the long term, the role that smallholders will play in meeting growing demand for palm oil is considered to be crucial, and one of the break-out sessions last week looked at how member companies can work with smallholders towards gaining RSPO certification.

The global demand for palm oil is expected to double by 2050. Oxfam, an RSPO member since the organisation's inception in 2004, is not alone in pointing to the development of smallholder production as key to meeting that demand. In a recent paper, Oxfam notes that smallholder yields can be between one and three tons of oil per hectare, against six to eight tons for a large-scale oil palm grower. However, particularly given the palm oil sector's controversial history, Oxfam and other campaigners stress that this expansion of smallholder production must be done in an environmentally and socially sustainable way, and believes "a re-design of company-community partnerships is necessary to support zero-deforestation goals".

Notably, Oxfam says the FAIR (freedom of choice; accountability; improvement; respect for rights) partnership model it is advocating for smallholder oil palm producers "does not go beyond certification by the RSPO, but rather guides development at an earlier stage, when a company and community first start to build relations".

The Oxfam paper continues: "The principles for FAIR partnerships should not be considered as a new standard but rather support the existing sustainability initiatives, such as the RSPO, in their pursuit to make sustainable production models the norm."

RSPO members were not just discussing how they can reach their challenging long-term goals. The conference was taking place in Europe as producers and distributors of palm oil prepare for an extremely significant change in legislation.

When the new EU food labelling regulation comes into force in December 2014 palm oil will have to be stipulated as an ingredient. There is a widespread view among RSPO members that the consumer pull regarding sustainable palm oil in the European market will be significantly increased as a result.

As RSPO secretary-general Darrel Webber observed: "2015 is around the corner. In less than six months the new EU food labelling regulation will come into force and 500m consumers in Europe will be exposed to the presence of palm oil in foods."

It was no surprise that another of the break-out sessions looked specifically at communication and consumer engagement. In fact, last week's conference served as the first in a series of "interactive dialogues" to be convened by the RSPO in Europe during the coming six months.

This ongoing dialogue would help to strengthen the RSPO's multi-stakeholder platform, Webber said. "Over the next months, we will strengthen our platform by continuing this dialogue and creating more opportunities to bring industry and other stakeholders together - particularly here in Europe. RSPO will continue to be the only global multi-stakeholder platform we have to share our responsibilities, work on our commitments and find common solutions."

As the day began, Sen had suggested that the palm oil sector is "approaching a so-called tipping point to transform markets", and with the heightened consumer awareness likely to result from thenew labelling regulations in Europe the coming year could indeed see a dramatic gear change for the CSPO market.

However, Sen also candidly warned his audience that "much more needs to be done to create a consumer relevant brand for sustainable palm oil in the minds of consumers. If consumers vote with their wallets, there will be more demand for sustainable palm oil and this in turn will drive sustainable practices in the industry".

Deforestation is clearly an issue of massive consumer concern and certainly in Europe during the coming year or so the associations between palm oil and deforestation could well become even more direct in the eyes of consumers. There was a strong sense at the conference that this raised consumer awareness about palm oil must coincide with RSPO members themselves raising their game.

Webber concluded: "At this stage the matter is not whether industries will continue to use palm oil. Those who wanted to switch to other alternatives have already decided to do so. The question is whether we are prepared to cope with the greater transparency that these consumers are likely to demand. They will want to know why palm oil is used and what we are doing to use it sustainably."