The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes,...
Transcript of The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes,...
![Page 1: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/1.jpg)
The IMRE Journal Volume 8 (1) 2014 2014. TU Bergakademie Freiberg
http://www.wiwi.tu-freiberg.de/~urm/imre/journal/index.htm
The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
Technische Universität Bergakademie Freiberg Correspondence: [email protected]
Revised: 02.06.2014 Online Publication Date: 07.07.2014
The IMRE Journal
Abstract
The global demand for palm oil is growing day by day and palm oil companies have
been taking necessary actions to meet this demand. In this paper, a brief overview of
palm oil plantations in Indonesia and their environmental and social impacts is given.
Moreover, the approach of the Roundtable on Sustainable Palm Oil (RSPO) Principles
& Criteria (2007) to provide for a more sustainable solution for palm oil plantations is
analyzed and discussed.
Keywords: RSPO, sustainability, palm oil
Introduction
The history of palm oil runs back several millenniums in the past.
Originally, in many West African countries, palm oil was used as
cooking oil. European merchants occasionally purchased palm oil from
West Africa to use it for cooking, but not for other uses. The demand for
palm oil started to peak with Britain’s industrial revolution, when it
became used as an industrial lubricant.
Palm oil is one of the world’s renowned vegetable oils, and it is
produced from the palm fruit. Palm oil can be extracted from both the
flesh of the fruit as well as the kernel. Palm fruits are more productive
containing nearly 50% extractable oil. Total annual global vegetable oil
production is around 144 million tons, out of which 47 million tons
come from palm oil production (GreenPalm Sustainability).
Section 1 of this paper describes the growth of palm oil plantations in
Indonesia and total palm oil production from 2000 to 2013. Section 2
points out the major environmental and social impacts caused by palm
oil plantations. Section 3 is dedicated to illustrate the RSPO P&C 2007,
the impacts on producing sustainable palm oil, benefits and costs on
palm oil companies, and the three certification processes. In section 4,
identified problems of RSPO P&C 2007 are discussed. Finally, section
5 contains the conclusion.
![Page 2: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/2.jpg)
1. Plantation Area in Indonesia
Palm oil plantations for commercial purposes started in
1911 in North Sumatra and Java. During the 1960s, the
Indonesian Government supported smallholders
(inhabitants who own palm oil plantations) to start
palm plantation projects and expanded its (government)
support to the private sector (private limited liability
palm oil companies) in the 1970s. In 1986, the area of
palm oil plantation accounted for 782,000 ha
(Indonesian Palm Oil Board). In 2006, it reached
almost 6.1 million ha (Sustainable Oil Palm Plantation,
2007) and in 2010, the plantation area was
approximately 8 million ha. For 2020, this area is
supposed to increase to approximately 13 million ha
(Figure 1.1) (Buntoro Rianto et al., 2012).
Figure 1.1: Growth Palm Plantation Area in Indonesia
Source: Palm Oil Plantation – Industry landscape, regulatory and
financial overview, 2012
In 2006, 53% of total palm oil plantations were owned
by the private sector. The government and smallholders
owned 12% and 35% respectively (See Figure 1.2). In
2010, 54% of total palm oil plantations were owned by
the private sector and smallholders increased their
share up to 38%. The remaining area belonged to the
state owned enterprises (Buntoro Rianto et al., 2012).
Figure 1.2: Plantations by sector in 2006
Source: Indonesian Palm Oil Board, “Indonesian Palm Oil in
Numbers” 2007
Palm Oil Production
In 2000, Indonesia produced nearly 5.8 million tons of
palm oil (Indonesian Palm Oil in Numbers).
Smallholders produced 33% of that amount, while the
government and private companies produced 25% and
42% respectively. Figure 1.3 presents the annual palm
oil production of the different sectors from 2000 to
2006.
Figure 1.3: Annual palm oil production by sector from 2000 to
2006
Source: Indonesian Palm Oil Board, “Indonesian Palm Oil in
Numbers”, 2007
It is easy to observe that palm oil production has been
increasing substantially. In 2006, including all sectors
The IMRE Journal
5.554
7.825
10.200
12.825
00
2.000
4.000
6.000
8.000
10.000
12.000
14.000
2005 2010 2015 2020
in Hectares
12%
35% 53%
Government
Smallholders
Private Sector
-
2.000.000
4.000.000
6.000.000
8.000.000
10.000.000
12.000.000
14.000.000
16.000.000
18.000.000
PrivateCompanies
Government
Smallholders
Page 2 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 3: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/3.jpg)
(Private, Government, and Smallholders) it was
approximately 16.6 million tons. Figure 1.4 shows
Indonesian palm oil production from 2007 to 2013. In
2013, production was approximately 31million tons, an
increase by 8.77% compared to 2012 (Index Mundi,
2014).
Figure 1.4: Annual palm oil production from 2007 to 2013
Source: indexmundi, “Indonesian Palm Oil Production by Year”,
2014
Indonesia plans to increase palm oil production up to
40 million tons in 2020 and, as a result, the country
will be the largest palm oil producer in the world. The
growth rate of palm oil production from 2013 to 2020
will be approximately 29.03% (Center for International
Forestry Research).
2. Environmental & Social Impacts
Identifying the environmental and social impacts of
palm oil plantations is very important. In this section,
the most significant environmental and social impacts
are discussed.
Environmental Impacts
Deforestation
It is to be noted that palm oil is considered to be one of
the major causes of environmental damage in
Indonesia. Clearing the land for palm oil plantations
leads to significant environmental problems through
deforestation, habitat and species destruction, pollution
(soil, air, water), and chemical contamination.
The clearing of tropical rainforests is very common in
Indonesia. Tropical rainforests are recognized for their
vast biodiversity and number of endemic species
(Brown & Jacobson, 2005).
Illegal Logging
Forest clearing for palm oil plantation is done through
various illegal activities. For example, in Kalimantan
and Papua, illegally formed timber companies started
palm oil companies only to obtain government licenses
to clear certain forest areas to obtain timber. Those
illegally formed palm oil companies do not actually
proceed to establish any palm oil plantations, but only
engage in illegal logging activities, whilst hiding
behind their government licenses actually released for
the purpose of establishing palm oil plantations. Hence,
the existence of such companies is an indication of
loopholes in governmental procedures for granting to
timber logging license (Clay, 2004).
As shown in Figure 1.1 and confirmed by the
International Finance Cooperation (IFC), palm oil
plantations covered approximately 8 million ha at the
end of 2009. Around 55% of these lands were planted
by clearing tropical forests and the average
deforestation rate of Indonesia is nearly 300,000 ha per
year (Saxon and Roquemore, 2011).
Endangered Species
Deforestation led to a great disaster regarding wildlife,
many species being near extinction. As forests are
cleared and replaced with biological forests, most
ecosystems started to collapse. Several endangered
species have been recorded in the International Union
for Conservation of Nature (IUCN) Red List. Some of
these endangered species caused by forest clearance are
mentioned here (Brown & Jacobson, 2005):
1. Orangutan
2. Sumatran Tiger
3. Clouded Leopard
4. Asian Elephant
5. Sumatran Rhinoceros
The IMRE Journal
0
5000
10000
15000
20000
25000
30000
35000
in MT
Page 3 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 4: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/4.jpg)
Soil Erosion
Soil erosion occurs due to a number of reasons. One of
the main reasons is leaving the soil exposed after forest
clearance. Another important cause of soil erosion is
the lack of proper management for forest clearance. In
2001, noticeable mismanagement of forest clearance
occurred in Riau Province of Sumatra, Indonesia.
Loggers bulldozed the logged trees straight down the
hills without using contour rows, which led to drainage
of rainwater into the gutters contributing to soil
degradation. The lack of proper road infrastructure
represents another cause for soil erosion. Planting trees
in rows from top to bottom rather than following
contour plowing or contour bonding techniques, which
represent better ways to reduce erosion. One more
cause of erosion results from planters using slopes of
more than 15 degrees (Clay, 2004).
Air Pollution
Air pollution occurs specially due to forest burning. It
is the most common method of planters for clearing
forests for plantations. Once started, the fire is
uncontrollable and can last for months. The fires
release thick smog with health damages for people
exposed to it and has a direct impact on pollinate. Even
though the government of Indonesia has passed laws
and regulations against forest burning, this procedure is
still being used in some areas (Clay, 2004).
Soil and Water Pollution
Palm Oil Mill Effluent (POME) is a liquid generated
mostly during the extraction, washing, and cleaning
processes. The disposed POME is a brownish hot
liquid with a pH value of 4 or 5. Releasing it directly
into the soil is destroying the vegetation. Disposing
POME into water bodies, which is the cheapest method
available, causes water pollution even though it is not
highly toxic. The solid parts in the POME are called
Palm Oil Mill Sludge (POMS), and contain a very high
nutrient value with a pH value of 8.4. POMS produces
an extremely awful odor and is recognized as a soil and
water pollutant (Rupani et al., 2010). Unsystematic
usage of pesticides and fertilizer directly affect the soil
and water sources.
Climate Change
The clearance of peat lands through burning leads to
significant amounts of CO2 being released into the
atmosphere and contributing to global climate change.
A part of the America’s Climate Change project, which
monitors the climate change around the world, supports
the idea that Hurricanes, Earthquakes, Floods,
Draughts, and other natural disasters occur due to the
climate change (Advancing the Science of Climate
Change, 2010).
Social Impacts
Two significant social impacts have been identified:
land conflicts and cultural issues. The reasons for these
impacts are explained in the next section. In addition, a
number of positive social impacts have been identified
(See Table 2.1).
Land Conflicts
Land conflicts often occur in areas of palm oil
plantations, especially in West Kalimantan with its
indigenous population of Dayak. Nearly 40 million
indigenous people and other rural communities dwell
on forestlands without any formal rights over their own
lands. This lack of formal rights made it easier for
private plantation companies to obtain customary rights
on the lands. In 1998, the Indonesian Legal Aid
Foundation completed research about customary rights
on lands. The Foundation reported that 214,356
households in 14 provinces - approximately 553 cases -
lost 827,351 ha of land to palm oil plantation. The
Foundation also found strong resistance from
indigenous people and other rural communities trying
to stop plantations companies from continuing their
operations. Similarly, the Foundation produced
evidence that companies bribe higher government
officials to subdue conflicts with the indigenous people
(Wakker, 2005).
Such land conflicts also lead to violence. For 2001, the
Consortium for Agrarian Reform, a non-profit
organization, formed in 1994, to support the
The IMRE Journal
Page 4 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 5: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/5.jpg)
environmental conservation and human rights in
Indonesia, also known as Konsorsium Pembaruan
Agraria (KPA), found 261 cases involving kidnapping,
rape, and household destructions related to palm oil
plantations. In 2002, this number had increased to 530
including murders, abductions, household destructions,
and other forms of violence (Wakker, 2005).
Cultural Issues
Most indigenous people in rural areas live from
farming activities, which are part of their culture. They
have deep rooted traditions linked with forests, which
are passed on from generation to generation. Cutting-
down forests reduces the available forested land
leading to insecurity of their lives.
Positive Impacts
Even given these numerous conflicts, palm oil
plantations bring some valuable benefits to companies
and local populations. Many underdeveloped villages,
which are situated far away from the main cities,
benefit from plantations through the construction of
schools, hospitals, and other infrastructure (See Table
2.1).
Table 2.1: Positive Social Impacts of RSPO Certification
Sector Benefits
Education New educational infrastructures
Scholarships for students
Increasing the quality of teaching
and learning activities
New facilities for pre-element
schools
Economy Amplify revenues of communities
New job opportunities
Training programs related to palm
oil plantations and business
Social Infrastructure development of
villages (roads, transportation
facilities
Development of water supplies and
other sanitary facilities
New sports facilities
Boost the unity between
communities through various social
activities such as blood donations
Health Development of clinics and health
care activities
Provision of health education to
villages to increase the awareness to
have a good health
Source: Indonesia Palm Oil Advocacy Team - Indonesian Palm
Oil Board, “Facts of Indonesian Palm Oil”, 2010
3. Roundtable on Sustainable Palm Oil (RSPO)
The demand for palm oil has largely increased within
the past decade for the production of both food and
non-food products. Regarding non-food products, the
production of biofuel is one of the main drivers for the
demand of palm oil
RSPO has as members the Malaysian Palm Oil
Association, conservation organizations (WWF), and
major palm oil users such as Migros and Unilever. The
initial major reason for founding the RSPO was to
overcome strong protests by various nongovernmental
organizations (NGOs) against rain forest destruction
and to meet the increasing global demand for
sustainably produced palm oil. As a result, one
significant principle adopted by RSPO is that palm oil
plantations and palm oil production must not take place
in primary forests or High Conservation Value (HCV)
areas, which are defined as natural habitats with an
outstanding significance (RSPO, 2014). The RSPO
standard contains 8 principles and 39 criteria, which
must be fulfilled by applicants in order to receive
RSPO certification.
RSPO certification is a process to certify produced
palm oil as sustainable palm oil. The certification
process is created to identify if the palm oil companies
and other relevant parties (e.g.: planters, transportation)
meet the RSPO principles and criteria. Currently, there
are three certification processes available to certify
palm oil as sustainable. These three certification
processes are described in Section 3. Once a palm oil
company is certified as sustainable, the particular
The IMRE Journal
Page 5 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 6: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/6.jpg)
company gains the right to claim its products as RSPO
certified sustainable.
Effects of RSPO
At the outset, reactions by the palm oil industry
towards sustainable palm oil production as promoted
by RSPO were modest, but starting, from 2009, a
noticeable positive change could be observed (World
Wide Fund (WWF) and RSPO). Figure 3.1 shows an
increasing tendency of RSPO membership.
Figure 3.1: Growth of the RSPO Members by Type
Source: rspo.org/en/membership_key_statistics, 2013
Figure 3.2 presents the world Certified Sustainable
Palm Oil (CSPO) supply for 2008-2012. A rapid
increase in CSPO supply worldwide can be observed,
Indonesia alone having supplied 4.06 million tons of
CSPO in 2012.
Figure 3.2: Global RSPO Certified Palm Oil Supply
Source: rspo.org/en/key_statistics, 2013
Why RSPO Certification?
For palm oil production companies, Certified palm oil
is a must in order to meet the RSPO Principles &
Criteria (P&C). The ultimate objective of the RSPO
goal is to ensure that rainforests are not cleared for
palm oil plantations and necessary actions are taken to
mitigate adverse environmental and social impacts
(Seventh Generation, 2012). Since RSPO certification
may improve the reputation of a company, palm oil
growers, investors, manufacturers, and retailers are
given incentives to obtain RSPO certification. By way
of example, Barry Callebaut, a giant in the chocolate
industry, stated its intention to use RSPO certified palm
oil for compounds and fillings in all of its factories in
Europe (Confectionery Production, 2013). Customers
are increasingly requesting end-products manufacturers
using sustainable palm oil to deliver data about mass-
balances, as seen in a quotation by Stevan Retzlaff –
President Global Sourcing and Cocoa of Barry
Callebaut AG: “The demand for food products
produced in a responsible way continues to grow, and
we’re seeing this as well in our compound and fillings
business with an increasing number of customers
requiring sustainable palm oil” (Confectionery
Production, 2013).
Benefits of RSPO Certification
It is important to understand and identify the benefits
which palm oil planters may gain from RSPO
Certification. Market data issued by WWF and RSPO
show that certified palm oil producers delivered a
significant amount of CSPO accounting to 10% and
14% of total world palm oil production in 2011 and
2012 (See Figure 3.3). For 2009, 2010, and 2011
produced CSPO was 1.75 million tons, 2.3 million tons
and 4.89 million tons respectively. Hence, CSPO
production is rapidly increasing and the RSPO expects
to see a real market change with considerable amounts
of CSPO being used in products in 10 to 15 years time
(RSPO, 2013).
The IMRE Journal
0
200
400
600
800
1000
2004 2005 2006 2007 2008 2009 2010 2011 2012
Ordinary
Affliate
Associate
No. of Memberships
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
9000000
2008 2009 2010 2011 2012
in tons Certified Palm OilSupply
Page 6 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 7: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/7.jpg)
Figure 3.3: Total RSPO Certified Palm Oil in 2012
Source: rspo.org, 2013
RSPO certification increasingly is seen as a
requirement for entering the EU market, which shows
tendencies for traceable RSPO certified palm oil. Other
main palm oil importers, such as India, China and
USA, also show an interest in RSPO certified palm oil
(RSPO, 2013). Therefore, RSPO certification yields a
significant economic benefit for palm oil producers.
Table 3.1 list environmental and social benefits from
RSPO Certification.
Table 3.1: Benefits of RSPO Certification
Environment &
Society
Producers &
Suppliers
Better awareness of
HCV areas
Improved reputation
Decrease in green
house gas emissions by
using degraded lands
and zero burning
Better access to
international markets
Improved waste and
pollution management
system
Better strategies to
enhance the
sustainability of palm
oil production
Wise usage of
pesticides and
chemicals
Increase of the value
of palm oil
Application of
Integrated Pest
Management system to
control pests naturally
Improved Occupational
Health and Safety (OHS)
risk management
Better communication
with local communities
Better communication
with local
communities
Adequate
compensation paid for
particular land
acquisitions
Cost reductions in
social conflicts
Better relationships
with employees
Reduction of annual
costs of pesticides and
herbicides
Skilled labor force
Increase of investors
Source: Levin, 2012
Costs of RSPO Certification
Similar to other certification processes available around
the world, palm oil producers must pay the costs of
RSPO certification. Table 3.2 lists these costs, as
reported by WWF (2012).
Table 3.2: Cos of RSPO Certification
Costs Description
Assessment and
Management of HCV
areas
Costs regarding
identification &
management of HCV
areas within the palm oil
plantation.
Costs for
Environmental Impact
Assessments (EIA) and
Social Impact
Assessments (SIA)
Since EIA is a legal
requirement to fulfill in
Indonesia, it is
considered as a fixed
cost
The IMRE Journal
14%
86%
RSPO Certified
Palm Oil
Uncertified
Palm Oil
Page 7 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 8: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/8.jpg)
Costs for segregation Costs regarding
segregation are
considered as variable
costs. Cost calculation
for segregation is only
required, if the palm oil
producer is willing to
produce segregated
CSPO
Regular payments of
license fees Fees paid to obtain
relevant certificates at
the outset and for
updating such as RSPO
certificate, RSPO
membership
Training and
Development programs
for employees and
smallholders
Palm oil producers
should provide necessary
training to employees in
order to mitigate social
and environmental
impacts
Source: Levin, 2012
Certified RSPO – Sustainable or Not?
Palm oil production has a very complex supply chain.
It consists of palm oil planters, palm oil producers,
palm oil processors, traders, and storage tanks, which
are located all over the world. The segregation of
CSPO through the entire supply chain is very
important. RSPO has three certification processes to
certify palm oil as sustainable. The three certification
processes are briefly explained below.
1. Segregation Process
The segregation process ensures that the palm oil end-
user receives only RSPO certified palm oil. This
certified palm oil is not mixed with any other non-
certified palm oil during the palm oil supply chain. One
major requirement for this process is that all units
which belong to the supply chain should be RSPO
certified members. In this way, a segregation of CSPO
throughout the entire supply chain is possible (Figure
3.4). The process is considered to be quite costly in
comparison to other certification processes, since it
requires additional measures to keep CSPO segregated
throughout the entire supply chain.
Figure 3.4: Segregation Process
Source: RSPO Supply Chain Certification Standard, 2011
2. Mass Balance Process
This process allows suppliers to mix non-certified palm
oil with CSPO from different stages of the palm oil
supply chain (Figure 3.5). However, all units belonging
to the palm oil supply chain should be RSPO certified
members. This process allows companies to support
CSPO production and, at the same time, to reduce costs
occurring in the segregation process.
Figure 3.5: Mass Balance Model
Source: RSPO Supply Chain Certification Standard, 2011
3. Book & Claim Process
This process allows palm oil suppliers and retailers to
support the production of sustainable palm oil
financially. Suppliers and retailers can buy sustainable
palm oil certificates from the GreenPalm Certificate
Program, even though suppliers / retailers do not
The IMRE Journal
Page 8 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 9: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/9.jpg)
produce or buy any CSPO (Figure 3.6). The palm oil
and end-products produced under this process cannot
be claimed as RSPO certified oil/products, since
relevant parties only contribute financially to
sustainable oil production. However, suppliers or
retailers who own certificates of the GreenPalm
Certificate Program, can claim that they have
‘advanced’ sustainable palm oil production.
Figure 3.6: Book & Claim Certification Model
Source: RSPO Supply Chain Certification Standard, 2011
If we compare all above-mentioned certification
processes, only the oil produced by the Segregation
process can be considered as sustainable palm oil. The
other processes, the Mass Balance and the Book &
Claim process, do not yield sustainable palm oil
exclusively, as described above.
4. Identified Problems of RSPO P&C 2007
Even though the RSPO P&C focus on environmental
and social impacts and the avoidance of forest clearing,
some loopholes were identified. Some criteria of the
RSPO are weak, inefficient, and hard to monitor and
audit (e.g. RSPO Criteria 6.7, 6.8, 6.11 – please refer
RSPO P&C 2007, which can be easily downloaded
from the RSPO official website). POAG claims that
reserved HCV areas are not well protected, being still
exposed to the threat of illegal logging (Palm Oil
Action Group, 2013).
According to a survey carried out by RSPO, a majority
of companies, individuals, investors and NGOs (e.g.:
IKEA, OXFAM, Zoological Society of London,
Johnson & Johnson) stated that Criterion 5.2 on HCV
areas should be improved in the sense that well-defined
and clear guidance on how to protect, monitor, and
manage HCV areas should be given. Furthermore,
RSPO should focus more on GHG emissions and the
corresponding Criterion 5.6 on “Pollution and
emissions, GHG” should be updated. In addition,
Criterion 4.6 on “Agrochemicals and pesticides”
should provide for a clear definition of hazardous
pesticides. Furthermore, a clear definition and guidance
related to ‘Corruption’ is strongly requested. Other
identified weak criteria are 2.3 (Land legal rights), 3.1
(Financial viability), 4.4 (Surface and ground water),
6.7 (Child labor), 7.1 (Social and Environmental
impact assessment), and 7.6 (Land acquisition) (RSPO
P&C Overall by Stakeholders, 2012).
RSPO P&C (2007) mitigate the environmental and
social impacts to some degree. For the environmental
appropriateness, RSPO P&C (Principle 4: Use of
appropriate best practices by growers and millers - & 5:
Environmental Responsibility and conservation of
natural resources and biodiversity) attempts to mitigate
adverse impacts through various actions such as
protection of endangered species, reserve HCV areas,
reduction of air, soil, and water pollution, increasing
energy efficiency, and prevention of deforestation and
fire. However, some of the Principles and Criteria
remain weak and need to be updated, such as Criteria
4.4 and 5.2 (HCV and Endangered species), which
should contain more appropriate and clear guidance.
Furthermore, RSPO gives an unclear impression
regarding the use of Paraquat (widely used herbicide),
which is highly toxic to animals and humans. The best
solution to avoid any toxic pollution is to ban the use of
Paraquat completely.
RSPO shows a weak focus on GHG emissions. There
should be a proper procedure to identify the sources
and calculate the carbon emissions in order to cut down
the CO2 emissions into the atmosphere.
Regarding negative social impacts, some criteria need
to be updated. As for Criterion 6.7, child labor is
somewhat allowed in plantations, only for children,
which belong to palm oil growers. Even though
Principle 6 (Responsible consideration of employees
The IMRE Journal
Page 9 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 10: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/10.jpg)
and of individuals and communities affected by
growers and mills) attempts to provide a safe
environment for pregnant women, monitoring them
seems to be quite hard. Furthermore there should be a
new criterion under principle 6 to answer problems
with migrated workers.
Other criticism refers to the fact that sanctions against
the RSPO members who have breached the P&C are
not strong enough. The highest punishment for a
company breaching P&C consists in the termination of
RSPO membership. After termination, there is still an
opportunity to regain membership as long as the
responsible parties settle down their disputes. After
reviewing the RSPO Principles 4, 5, & 6, which are
focused on environmental and social impact mitigation,
it is quite hard to say that RSPO certified palm oil is
100% sustainable. Identified loopholes of the P&C play
a major role in preventing palm oil to achieve
sustainability in the supply chain. However, it is still a
good starting point to drive the palm oil industry
towards a sustainable approach. The RSPO Task Force
was developed in order to identify the current
drawbacks of the P&C. According to the Task Force,
the RSPO P&C should be reviewed and updated every
5 years. These actions show the RSPO intents to set
positive signs of working towards a more sustainable
palm oil industry in the future.
5. Conclusion
The reason for the rapid increase of palm oil
production in Indonesia as driven by a rapid increase of
the global demand for palm oil is elaborated in a first
part of the beginning of this paper. Negative impacts on
environment and society, such as deforestation, high
carbon emissions, habitat extinction, and violence on
land rights have also increased. Attempts by the
Government of Indonesia to issue national regulations
seem to be weak in their implementation and major
impacts, such as deforestation, high carbon emissions,
habitat extinction, and violence on land rights continue
to occur. As a result, palm oil producers increased their
production as much as possible without considering the
environmental and social impacts they caused.
In order to deal with the damage to the environment
and ecosystems and the social and economic impacts of
increasing palm oil production, the so-called
Roundtable on Sustainable Palm Oil (RSPO) was set
up in 2003 at the global level, with membership along
the entire supply chain. Its goal is to promote “the
growth and use of sustainable palm oil through
cooperation within the supply chain and open dialogue
between its stakeholders”(GreenPalm Sustainability,
2012). The paper describes the certification procedures
created by the RSPO, showing some statistics about
production volumes covers by these certifications. It
also deals with criticism issued by various observers
such as NGOs attempts by the RSPO responsible
bodies to correct for them.
In conclusion, even if RSPO P&C (2007) is not able to
generate a fully sustainable palm oil plantation process,
I personally believe the RSPO P&C constitute the best
available approach towards sustainable palm oil in the
future. The high involvement of NGO’s, palm oil
producers, and governments (Indonesia, Malaysia, EU)
is an indication that new solutions to improve the
RSPO P&C further will be formulated and that more
attention will be given to preserving threatened rain
forests, rare species, and ecosystems. Even so and
taken into account that the RSPO certified area of palm
oil is on the increase, a continuous monitoring of
RSPO’s activities is needed to keep all stages of the
palm oil production process on track and to make sure
that all RSPO certified members are complying with
the RSPO P&C thoroughly. As for now, RSPO P&C
certification may not be the best solution, but
continuous evolvement will ensure a better and reliable
sustainable approach in the future.
References
Beth Gingold (2010), Degraded Land, Sustainable
Palm Oil, and Indonesia’s Future, Retrieved
December 28, 2012 from website:
http://www.wri.org/stories/2010/07/degraded-
land-sustainable-palm-oil-and-indonesias-future
The IMRE Journal
Page 10 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 11: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/11.jpg)
Beth Gingold, Anne Rosenbarger (2012), Degraded
Land for Sustainable Palm Oil in Indonesia:
Practical Guidance, Retrieved December 18,
2012 from website:
http://insights.wri.org/news/2012/04/degraded-
land-sustainable-palm-oil-indonesia-practical-
guidance
Buntoro Rianto/Hafidsyah Mochtar/Aditya Sasmito
(2012), PricewaterhouseCoopers: Overview of
Palm Oil Industry Landscape in Indonesia,
Retrieved December 16, 2012 from website:
http://www.pwc.com/id/en/publications/assets/P
alm-Oil-Plantation-2012.pdf
Code of Conduct for Members of the Roundtable on
Sustainable Palm Oil (2012), Retrieved
February 02, 2013 from website:
http://www.rspo.org/en/rspo_code_of_conduct
Confectionery Production (2013), Barry Callebaut
Switches to RSPO Certified Palm Oil, Retrieved
February 10, 2013 from website:
http://www.confectioneryproduction.com/8825/
news/barry-callebaut-switching-to-rspo-
certified-palm-oil/
CSPO Market Performance (2013), Retrieved February
02, 2013 from website:
www.rspo.org/en/key_statistics
Ellie Brown, Ph.D and Michael F. Jacobson, Ph.D.
(2005), Cruel Oil: How Palm Oil Harms
Health, Rainforest & Wildlife, Retrieved
December 17, 2012 from website:
http://www.cspinet.org/palm/PalmOilReport.pd
f
Eric Wakker – AIDEnvironment (2005), Greasy
Palms: The Social and Ecological Impacts of
Large-Scale Oil Palm Plantation Development
in Southeast Asia, Retrieved December 17,
2012 from website:
http://www.savegporangutans.org/docs/greasy_
palms_impacts.pdf
Frequently Asked Questions about UTZ Certified
(2010), Retrieved January 5, 2013 from
website:http://www.trupela.com/wp-
content/downloads/coffee/Frequently%20Asked
%20Questions%20about%20UTZ%20CERTIFI
ED.pdf
Green Palm Sustainability (2012), Retrieved December
20, 2012 from website:
http://greenpalm.org/en/about-palm-oil/what-is-
palm-oil
Indonesian Palm Oil Board (2007), Indonesian Palm
Oil in Numbers, Retrieved December 20, 2012
from website: http://www.indonesian-
embassy.de/image/Palmoil/Indonesian-Palmoil-
1.pdf
Indonesian Palm Oil Board (2007), Sustainable Oil
Palm Plantations, Retrieved January 15, 2013
from website: http://www.indonesian-
embassy.de/image/Palmoil/Indonesian-Palmoil-
2.pdf
Indonesian Palm Oil Board (2010), Facts of Indonesian
Palm Oil, Retrieved December 21, 2012 from
website:
http://seafast.ipb.ac.id/unduh/Booklet_Facts-of-
Indonesian-Oil-Palm.pdf
Jason Clay (2004), World Agriculture and the
Environment, Retrieved December 27, 2012
from website
http://www.krishibid.com/ebook/1559633700.p
df
Joshua Levin (2012), WWF Report – Profitability and
Sustainability in Palm Oil Production: Analysis
of Incremental Financial Costs and Benefits of
RSPO Compliance, Retrieved February 24,
2013 from website:
http://awsassets.panda.org/downloads/profitabili
ty_and_sustainability_in_palm_oil_production_
_update_.pdf
The IMRE Journal
Page 11 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi
![Page 12: The Role of RSPO towards Sustainability in the Palm … · the idea that Hurricanes, Earthquakes, Floods, Draughts, and other natural disasters occur due to the ... Oil Industry:](https://reader031.fdocuments.in/reader031/viewer/2022020413/5b8cefba09d3f22c638da880/html5/thumbnails/12.jpg)
K. Obidzinski, R. Andriani, H. Komarudin, A.
Adrianto (2012), Ecology and Society:
Environmental and Social Impacts of Oil Palm
Plantations and their Implications for Biofuel
Production in Indonesia, Retrieved December
20, 2012 from website:
http://www.ecologyandsociety.org/vol17/iss1/ar
t25/#environmentalimpacts
Marcus Colchester, Norman Jiwan, Andiko, Martua
Sirait, Asep Yunan Firdaus, A. Surambo, Herbert
Pane (2006), Palm Oil and Land Acquisition in
Indonesia: Implications for Local Communities
and Indigenous Peoples, Retrieved January 15,
2013 from website:
http://www.forestpeoples.org/sites/fpp/files/publi
cation/2010/08/promisedlandeng.pdf
Praveen Fatemaeh Rupani, Rajeev Pratap Singh, M.
Hakimi Ibrahim, Noriuzan Esa (2010), Review
of Current Palm Oil Mill Effluent (POME)
Treatment Methods, Retrieved January 23, 2013
from website:
http://idosi.org/wasj/wasj11(1)10/12.pdf
Product Board MVO (2011), Fact Sheet Palm Oil,
Retrieved December 20, 2012 from website:
http://www.mvo.nl/LinkClick.aspx?fileticket=js
FVMZwZzkc%3d&tabid=2301&mid=3341&la
nguage=en-US
PT Agro Indomas Annual Report (2010), RSPO Annual
Communication of Progress, Retrieved January
23, 2013 from website:
http://www.rspo.org/sites/default/files/133.%20
PT%20Agro%20Indomas%20annual%20report
%202010.pdf
Questions and Answers (n.d.), Retrieved February 07,
2013 from website:
http://www.rspo.org/en/questions_and_answers
RSPO Principles and Criteria for Sustainable Palm Oil
Production (2007), Retrieved January 15, 2013
from website:
http://www.rspo.org/files/resource_centre/RSP
O%20Principles%20&%20Criteria%20Docume
nt.pdf
RSPO P&C Overall by Stakeholders (2012), Retrieved
January 14, 2013 from website:
http://www.rspo.org/_v2/file/RSPO_Phase%20
1_Overall_by%20stakeholder.docx
RSPO Supply Chain Certification Standard (2011),
Retrieved January 15, 2013 from website:
http://www.rspo.org/files/resource_centre/keyd
oc/15%20en_RSPO%20Supply%20Chain%20(
Nov%202011).pdf
Roundtable on Sustainable Palm Oil (2012), Retrieved
December 22, 2012 from website:
http://www.rspo.org/
Seventh Generation (2012), What is the difference
between a plantation that is RSPO certified and
one that isn’t certified, Retrieved February 06,
2013 from website:
http://seventhgeneration.custhelp.com/app/answ
ers/detail/a_id/427/~/what-is-the-difference-
between-a-plantation-that-is-rspo-certified-and-
one-that
The IMRE Journal
Page 12 The Role of RSPO towards Sustainability in the Palm Oil Industry: A Case Study about Indonesia
Vimukthi Nupearachchi