Datuk Darrel Webber, CEO of the Roundtable on Sustainable Palm Oil (RSPO), is a speaker at the 2016 Responsible Finance Summit. In this interview with The World Financial Review, Webber talks about the benefits of sustainable palm oil production and the RSPO’s efforts in transforming markets to make sustainable palm oil the norm.
As Chief Executive Officer of the Roundtable on Sustainable Palm Oil, how has the RSPO transformed the sustainability of the palm oil production?
We began by raising the subject of sustainable development in the palm oil industry by creating awareness among the industry players. We have provided the market mechanism to promote good behaviour among industry players, through complying with RSPO standards by encouraging our members to address complex and difficult challenges and work towards developing solutions to overcome problems such as environmental issues caused by inappropriate palm oil producing, which indirectly strengthen the palm oil market.
Perhaps the most important transformation to note is the fact that 21% of world’s palm oil production is now Certified Sustainable Palm Oil (CSPO) and this number is only set to grow as more companies become RSPO members and adopt responsible palm oil sourcing policies.
What are the benefits of sustainable palm oil to stakeholders, consumers, and other parties involved?
Encouraging the norm of sustainable palm oil will benefit the local community as our members have to comply with the standards and rules for not executing harmful actions or activities which will affect the community. Reducing the impact caused by environmental issues will be the utmost benefit.
Consumers now will be able to benefit from the market transformation as the support for products with certified sustainable palm oil increases.
How does palm oil production affect the environment? How does sustainable palm oil production differ in terms of its effects?
Production of monoculture oil palm plantations has a number of environmental impacts. Among them are large-scale forest conversions, loss of critical habitats for endangered species, air, soil, & water pollution, all of which contribute to climate change. They can also create social conflicts if the rights and livelihoods of local communities are ignored. Not only can these cause negative external impacts, but can also affect the companies involved and hamper the ability of the companies to expand as planned.
Sustainable palm oil however is:
• being produced legally, without harming the local community
• being produced under free of conflict conditions from local people (such as protest)
• environmentally friendly, and avoids conservation areas
• economically viable
“To ensure palm oil is both sustainably produced and transparently traded, the RSPO established certification systems for different stakeholders of the palm oil supply chain.” Photo Courtesy: New Britain Palm Oil Limited
Does a greater awareness in sustainable palm oil production benefit the industry? Are initiatives being taken by the RSPO to spread awareness of the benefits of sustainable palm oil production? If so, what are they?
Having greater awareness and being aware of the move towards sustainable production will definitely benefit the industry. For example, there have been studies conducted that getting RSPO certified makes good business sense as well as good environmental and social sense for growers.
But the responsibility for making the industry sustainable also lies with those companies that buy and use palm oil.
The RSPO is engaged in a number of consumer campaigns across the globe advocating products with CSPO. However, we are also working closely with manufacturers and retailers on moving to more transparent supply chains to raise awareness of the issues related to conventional palm oil production and thereby strengthen the demand for CSPO.
How does sustainable palm oil production help in achieving responsible and sustainable economic growth?
Sustainable palm oil production is beneficial for the community, the environment and the quality of life. It guarantees the fair treatment of workers in a sector that already employs millions of farmers and indirect labour. Sustainable palm oil production ensures that they benefit from fair working conditions and wages, and that indigenous groups cannot be robbed of their land. RSPO certification can support smallholders in gaining high yields through better access to international markets raising levels of income among poor farmers. This also reduces the usage of land and fertilisers, which threaten our forests and biodiversity, with lower land conversions.
Why is the certification and standardisation of sustainable palm oil production important? How does the RSPO help in achieving this level of production?
The certification standards for sustainable palm oil developed by the RSPO is important as it is the only organisation that has developed a set of Principles and Criteria (P&C) that includes the protection of primary forest and areas of high conservation value as well as the rights of local communities, plantation workers, and indigenous peoples.
In reality, the palm oil supply chain can be quite complex. Palm oil can follow many paths, flowing through many different facilities, on its way from the plantation to the global market. But by purchasing products with certified sustainable palm oil, you are supporting these efforts and driving the palm oil industry toward production of 100% certified sustainable palm oil.
The RSPO values honesty and transparency between its members. How does this help in strengthening the standardisation of sustainable palm oil production? How does this help in fostering better relationships with members?
To ensure palm oil is both sustainably produced and transparently traded, the RSPO established certification systems for different stakeholders of the palm oil supply chain. However, although RSPO set the standards, we do not go on the ground to audit the members.
The members are audited by third-party auditors that are governed under Accreditation Services International (ASI). Only when the member is compliant with the standards are they certified by the RSPO.
In addition to that, RSPO members are committed to submit an Annual Communication of Progress (ACOP) detailing their time-bound plans and interim milestones, as well as progress to date toward achieving those goals. ACOP is a public record of member commitments and allows for regular and transparent progress reporting.
What do you think are the biggest challenges and problems the RSPO has faced and will face in the years to come to achieve greater global sustainable palm oil production?
Among the challenges of RSPO is that we aim to certify every smallholder in Malaysia, while currently we have only certified about 166,784 smallholders, thus reaching out to other smallholders is a challenge for us. Some industry players thought being certified for sustainable palm oil is just a “fashion”, while it is definitely not. It is a permanent and commercial necessity, where banks require palm oil producers to participate in the certification process as well. We want to change people’s mindset about sustainable palm oil being a “western agenda”. Everyone should understand the importance of it as it actually brings beneficial effect to the local community by reducing the problems such as environmental issues.
RSPO NEXT is the next phase on the journey to enhance palm oil sustainability that is aimed at building on RSPO P&C’s strengths. How will this initiative impact the global industry in the years to come?
RSPO NEXT criteria are for members who wish to hold themselves up to more extensive requirements than the P&C. Often, what was promoted as best practice in the P&C is now compulsory in RSPO NEXT. Concretely, this means an absolute ban on planting on peat of any depth, a ban on planting anywhere except on areas with low stocks of carbon, increased reporting and monitoring on GHG emissions, and commitments to develop outreach programmes to educate smallholders.
We believe this is the best way to drive change in the market and make sustainability the norm. We understand that there are many different players in the industry with different levels of commitment and capacity for producing and sourcing Certified Sustainable Palm Oil (CSPO) – from sustainability leaders, with their own integrated supply chains, to growers that have just started a certification process. However, creating an addendum for well-performing companies allows them to stay within the RSPO, using its third-party verification system, while being recognised for their achievements in reaching higher levels of sustainability and transparency in their supply chains.
What are the RSPO’s other plans in achieving greater global sustainable palm oil production?
In harmony with our vision, which is to transform markets to make sustainable palm oil the norm, we are aiming “to get sustainable palm oil as easy as it is to get unsustainable palm oil”, in other words, easy to reach for sustainable palm oil in the market.
This would happen if we achieve 51% of certified sustainable palm oil in the market, which is our expectation. While comparing the current achievement, which is 21%, there is still some way to go.
We are planning to work out in other markets such as China, India, Pakistan, Japan, Southern Europe, Eastern Europe, the US and so on. We believe it will gradually convert into sustainable palm oil as well when the target of 51% is achieved. I believe it is not easy to change the mindset of industry players. They would have to overcome the barriers and some mental block issues. It takes time for people to go through the changing phases, which is from Denial, Resistance, Exploration to Commitment.
Datuk Darrel Webber has been the CEO of the Roundtable on Sustainable Palm Oil since January 2011. His last position was Senior Associate of Global Sustainability Associates, a role which required him to provide senior counsel to companies and organisations about agricultural development (including oil palm). He was also actively involved in the initial discussions and development of the RSPO Principles & Criteria. Darrel speaks in numerous thought leadership forums and conferences all around the world on sustainability.
