Palm oil sustainability certification: more and more
UPDATE on 12 Nov 2013: Unilever is expected to set its new commitment. Currently: 100% traceable by 2020.
Indonesia Sustainable Palm Oil (ISPO) has an ambitious target for end-2014 certification by its palm oil companies. Earlier, the Agriculture Ministry spoke of sanctions including revoking the licenses of palm oil companies if they do not attain ISPO, which is mandatory. This aims to enhance practices with better implementation of Indonesia legal and regulatory requirements. “Certain ISPO standards are less strict than CSPO standards, and the cost of certification per hectare is lower. The ISPO was created after the Indonesian Palm Oil Association (Gapki) exited the RSPO in 2011, after a series of conflicts linked to environmental standards.” In March, ISPO certificates were handed over to to 10 palm oil companies for their certified estates. These included Musim Mas, Sari Aditya Loka 1, Swadaya Andika, Laguna Mandiri, Ivo Mas Tunggal, Hindoli, Gunung Sejahtera Dua Indah, Gunung Sejahtera Ibu Pertiwi and Perkebunan Nusantara V (Investor Daily in jakartaglobe.com, 11 Mar 2013).
The Roundtable on Sustainable Palm Oil (RSPO), a voluntary scheme, consisting of various stakeholders from growers, NGOs and financiers has enjoyed high visibility. However, it is the ISCC which has likely gained stronger commercial traction. Unlike the RSPO, it offers a decent premium to its users. It certifies for the EU biofuels market. Notably, one of the biggest palm oil buyers in the world, Neste Oil, reports only about 20% of its certified product being covered by RSPO certificate, while the ISCC is its mainstay. Recently, ISCC launched a certification for food, ISCC-Plus. RSPO NGO members brushed aside their worries over the food vs. fuel debate and allowed the introduction of a certification for biofuel users, RSPO-RED. How will RSPO and ISCC duke it out for market share, now that they are on the same turf?
Is a RSPO+ standard in the offing? This could be triggered by the successful campaign by Greenpeace against Golden Agri / Sinar Mas. The NGO was at hand when the plantation giant studied some of its land concessions considered as degraded. NGOs prefer this land type for palm oil expansion. The findings were quite negative for land development as the carbon ceiling measure operationalized the definition of usable land to immature scrub land. Greenpeace successfully pushed for the 35 tonnes carbon per ha ceiling on the Indonesian group’s pilot. Working on this project was The Forest Trust (TFT, a facilitator to the timber trade). Nestle set to investigate its palm oil supply-chain but it is no longer named in the project. Instead TFT and GAR bravely brought in Greenpeace. RSPO says it welcomes the Greenpeace-led Palm Oil Innovation Group (POIG, launched Jun 2013), which has lured in just a handful of its grower members including Golden Agri / Sinar Mas. The WWF (founder and key mover of the RSPO) has come out to criticize its own creation and jumped onboard with POIG. So, what’s next in the small world of voluntary palm oil certification? Keep an eye on WWF – Greenpeace moves while Unilever is expected to set its new commitment.
Malaysia Sustainable Palm Oil (MSPO), a certification standard developed by the Malaysia Palm Oil Board was launched mid-year. We hear that the logistics of the certification process is being established. Might there be an announcement on this during 4Q2013 with an eye to certificate issuance in 1Q2014? This is voluntary, but a mandatory scheme is being considered. The creation of national eco-certifications such as ISPO and MSPO should be no surprise. It is standard practice in various agricultural crops that national schemes sit alongside global and regional voluntary schemes.
Few governments and national industries are so fully trusting as to outsource policy making to voluntary multistakeholder bodies. These often become de facto dominated by a few NGOs and companies. With the proliferation of eco-certification available for palm oil buyers, the question is how well each scheme is marketed and how buyer acceptance evolves. In the timber sector, recent data shows that 2/3 market share has gone to national certification and 1/3 to voluntary stakeholder schemes.
Source: Khor Report's Palm Oil Nov/Dec 2013, Issue 5 (released)
Indonesia Sustainable Palm Oil (ISPO) has an ambitious target for end-2014 certification by its palm oil companies. Earlier, the Agriculture Ministry spoke of sanctions including revoking the licenses of palm oil companies if they do not attain ISPO, which is mandatory. This aims to enhance practices with better implementation of Indonesia legal and regulatory requirements. “Certain ISPO standards are less strict than CSPO standards, and the cost of certification per hectare is lower. The ISPO was created after the Indonesian Palm Oil Association (Gapki) exited the RSPO in 2011, after a series of conflicts linked to environmental standards.” In March, ISPO certificates were handed over to to 10 palm oil companies for their certified estates. These included Musim Mas, Sari Aditya Loka 1, Swadaya Andika, Laguna Mandiri, Ivo Mas Tunggal, Hindoli, Gunung Sejahtera Dua Indah, Gunung Sejahtera Ibu Pertiwi and Perkebunan Nusantara V (Investor Daily in jakartaglobe.com, 11 Mar 2013).
The Roundtable on Sustainable Palm Oil (RSPO), a voluntary scheme, consisting of various stakeholders from growers, NGOs and financiers has enjoyed high visibility. However, it is the ISCC which has likely gained stronger commercial traction. Unlike the RSPO, it offers a decent premium to its users. It certifies for the EU biofuels market. Notably, one of the biggest palm oil buyers in the world, Neste Oil, reports only about 20% of its certified product being covered by RSPO certificate, while the ISCC is its mainstay. Recently, ISCC launched a certification for food, ISCC-Plus. RSPO NGO members brushed aside their worries over the food vs. fuel debate and allowed the introduction of a certification for biofuel users, RSPO-RED. How will RSPO and ISCC duke it out for market share, now that they are on the same turf?
Is a RSPO+ standard in the offing? This could be triggered by the successful campaign by Greenpeace against Golden Agri / Sinar Mas. The NGO was at hand when the plantation giant studied some of its land concessions considered as degraded. NGOs prefer this land type for palm oil expansion. The findings were quite negative for land development as the carbon ceiling measure operationalized the definition of usable land to immature scrub land. Greenpeace successfully pushed for the 35 tonnes carbon per ha ceiling on the Indonesian group’s pilot. Working on this project was The Forest Trust (TFT, a facilitator to the timber trade). Nestle set to investigate its palm oil supply-chain but it is no longer named in the project. Instead TFT and GAR bravely brought in Greenpeace. RSPO says it welcomes the Greenpeace-led Palm Oil Innovation Group (POIG, launched Jun 2013), which has lured in just a handful of its grower members including Golden Agri / Sinar Mas. The WWF (founder and key mover of the RSPO) has come out to criticize its own creation and jumped onboard with POIG. So, what’s next in the small world of voluntary palm oil certification? Keep an eye on WWF – Greenpeace moves while Unilever is expected to set its new commitment.
Malaysia Sustainable Palm Oil (MSPO), a certification standard developed by the Malaysia Palm Oil Board was launched mid-year. We hear that the logistics of the certification process is being established. Might there be an announcement on this during 4Q2013 with an eye to certificate issuance in 1Q2014? This is voluntary, but a mandatory scheme is being considered. The creation of national eco-certifications such as ISPO and MSPO should be no surprise. It is standard practice in various agricultural crops that national schemes sit alongside global and regional voluntary schemes.
Few governments and national industries are so fully trusting as to outsource policy making to voluntary multistakeholder bodies. These often become de facto dominated by a few NGOs and companies. With the proliferation of eco-certification available for palm oil buyers, the question is how well each scheme is marketed and how buyer acceptance evolves. In the timber sector, recent data shows that 2/3 market share has gone to national certification and 1/3 to voluntary stakeholder schemes.
Source: Khor Report's Palm Oil Nov/Dec 2013, Issue 5 (released)