European industrial buyers have begun extending compulsory green certification from wood-based products to palm oil, as evidenced by the bold decision last week by Unilever, the world’s largest industrial consumer of crude palm oil (CPO), to cancel new contracts with Indonesia’s largest producer, the Sinar Mas group.
The giant Anglo-Dutch group, which processes about 1.5 million tons of CPO a year into soap, margarine, cosmetics and ice cream, explained it took the bold measure after being shown photographic evidence from Greenpeace of Sinar Mas clearing rainforests in protected areas.
Environmental NGOs will certainly welcome the move in light of forcing CPO producers in the country to develop plantations according to the principles promoted by the Roundtable on Sustainable Palm Oil (RSPO).
The dramatic expansion of Indonesia’s palm oil plantations over the past decade has made the country the world’s largest CPO producer with an estimated output of 20 million tons this year. But that massive development has been attacked by most national and international NGOs as the main driver making Indonesia the world’s third largest emitter of CO2 after China and the United States.
As the chair of the Kuala Lumpur-based RSPO, Unilever should indeed take the leadership in prodding other large industrial buyers to source their CPO only from suppliers whose production processes have been certified as being in compliance with RSPO principles on sustainable plantation management.
It is a pity, though, that since the promotion of sustainable CPO early last year, Unilever has so far sourced only about 15 percent of its CPO needs from RSPO-certified producers, although three major companies - London Sumatra, Hindoli (a subsidiary of the US-based Cargill) and Musim Mas - have been certified by the RSPO.
Sinar Mas is also a member of the RSPO, but has not yet received certification, which is based on a comprehensive, strict audit of production processes and management practices. The financing muscle, as shown by the highly respected Unilever with its recent decision, will go a long way in supporting the environmental movement to eventually make all oil palm estates in Indonesia sustainably managed.
But again it is regrettable that market leader Unilever, is committed to totally outsourcing its CPO from RSPO-certified suppliers only by 2015, while more than one millions tons of RSPO-certified supplies from Indonesia and Malaysia remained and unsold.
What makes the RSPO, founded in 2004, an ideal forum is that its founding members and current membership include such respectable NGOs as the WWF, Sawit Watch, Oxfam, large consumers as Unilever, and major CPO producers in Malaysia and Indonesia.
The right mix of members and sponsors (consumers, producers and civil society organizations) will throw out any perception that the RSPO is a subterfuge by developed countries who want to protect their own edible oil industries (mainly corn, soybean and peanut).
Moreover, the principles of sustainable management as promoted and assessed by the RSPO in its certification process cover such elements as transparency, legal and regulatory compliance, best production practices, environmental responsibility and commitments to local community development.
Large industrial consumers should be willing to pay a premium for RSPO-certified palm oil, otherwise there will be no incentives for producers to abide by RSPO principles, especially because buyers in Asia and elsewhere still accept non-certified CPO.
As a new organization, the RSPO understandably has many shortcomings, but as British Energy Minister Joan Ruddock stressed last month, the UK government championed the RSPO despite the limitations of its certification system.