RSPO RT13: Reader feedback on HCS+ HCSA and RSPO convergence and more. RSPO Next "commensurate effort" and floor price efforts are no-go? Link for presentation downloads. Members terminated / suspended. EU’s Product Environmental Footprint (PEF) initiative.

RSPO Roundtable annual meeting was held in KL over three days, 17-19 November 2015 (well, there was also a reception on 16th evening).
 

24 Nov 2015: Reader feedback on HCS+ HCSA and RSPO convergence and more

Editor: Thank you for various reader feedback on several topics. One segment immediately below and incorporated into text further down.

Reader feedback on issue of HCS+ and convergence with HCSA and RSPO: By the way, HCS+ is proposing the Palm Oil Welfare Index (POWI). Is this required when growers are asked to do comprehensive SEIA /SIA / FPIC before any new development? Or is it the same data to be re-packaged under POWI? Some highly regarded new planting developments use the “simplified template for PalmGHG”. If growers feel the results from the simplified palmGHG is the answer to new development, then we can just forget about HCSA and HCS+?
 
Please also refer to other Reader feedback below in the relevant sections below:
  • A subtle shift with NGO support to push buying / take-up of certificates....
  • Lots of talk of smallholders.
  • Floor price?

23 Nov 2015: RSPO Next "commensurate effort" and floor price efforts are no-go? Link for presentation downloads. Members terminated / suspended. EU’s Product Environmental Footprint (PEF) initiative.

 
Editor: Have heard from RSPO observers that RSPO Next "commensurate effort" and floor price efforts are delayed and may end up no-go. Also note that EU’s Product Environmental Footprint (PEF) initiative: Fratini Vergano report
 
You can look at RSPO RT13 presentations here: http://rt13.rspo.org/c/rt13-presentations/
 
 
Other highlights from RSPO website:
 
 
 

Day 2 & 3: Market uptake problem, RSPO Next calls for "commensurate effort" but can quasi-matching get through legal compliance? Quality of audits. Floor price. Smallholders focus. Jurisdiction approach. Sec-Gen wrap up. A tame GA13? (updated 20 Nov morning to add what's new and data at top)


Below are abridged notes on selected talks and panel sessions at RSPO RT13. They are not comprehensive!

Editor's notes on what specialists say is new at RSPO RT13, includes:
  • A subtle shift with NGO support to push buying / take-up of certificates already in production and for RSPO Next to have take-up commitments. The acceptance of the idea of "commensurate effort" is novel. And something that CGM and Retailer sector would find new in the 13 years plus of RSPO. [Reader feedback: The first RSPO certificates were only available from year 2008 onwards, United Plantations was the 1st company in the world to receive the cert].
  • Call for comprehensive smallholder plan more or less acknowledges that trickle-down from corporate sector centric policies has been dissatisfactory. Will this find jurisdiction approach as sufficient? Audience was lackluster when asked on jurisdiction approach helping smallholders.
  • RSPO alignment-convergence with other (higher) voluntary pledges mooted and some details suggested. But do other NGOs really want to converge? Market share tussles have been quite apparent. If policy innovation effort is any indicator (but data indicators this year not good, see below) the question is: Is RSPO gaining back its mojo? This is helped by buyers and producers readjusting and realigning after the big changes triggered by the trader-processors sub-sector to pull to non-certification traceability.


Editor's notes for the data minded:
 
  • In LMC reports (http://www.lmc.co.uk/Oilseeds_Oils_and_Oleochemicals; including presentation at MPOB PIPOC on cost of certification compliance driving the push toward non-certification traceability), this year's RSPO market share of global palm oil seen by some specialists as stuck at about 20pct. It has been increasing at 2pct-age points per year in recent years. So the slowdown this year raises many questions. Editor: This data point might explain the innovative moves on jurisdiction approaches to attract new membership volume, including for smallholders.
  • RSPO panelist notes the need for a lot of buying in the last 6 weeks of the year. There are many CGM and Retailer buyer pledges set for end 2015!
  • GreenPalm experts point out the drop in PKO certificates price and volumes. They reckon that the push up of PKO certificates to $80 plus has diminished demand volume. Worth checking this out.


source: www.greenpalm.org

 

Day 2. Opening ceremony for RSPO RT13.

Zainal Abidin rendered two hit songs. Hijau - Zainal Abidin  https://www.youtube.com/watch?v=BnoYNt-f2UE

Biswirajan Sen of Unilever, RSPO head. Talked of Haze Crisis pointing to need for sustainable palm oil not avoiding palm oil. Focus on jurisdiction approach to simplify admin (ed: and cost?) and include smallholders and government. RSPO Next voluntary add (ed: help get back mind and market share?). Coalition of capable and willing with inclusiveness

Bakke of Sime Darby. Sustainable Palm Oil Manifesto spent RM12 million on HCS and socio-economic development studies. To varying degrees, there are commitments to sustainable development. RSPO has reached 20pct of global production and Sime Darby has reached 99pct. But only half is sold as certified product. He calls on buyers not to wait, but to buy. Calls on working on the rest of agriculture (palm oil as a small land use footprint). Step away from propaganda, and work openly and honestly. Small farmer are important. Developing countries lack the funds to subsidise. Developed countries don't have much natural forest left. We need equitable development. Sime Darby initiatives: a) A new platform - Open Palm - traces high proportion of FFB, CPO, PKO to mill and estate and b) To assist small farmers, look and act beyond boundaries for fire safe zone up to 5km.
 
Oil palm versus primary forest. University of York study for RSPO. Reporting oil palm at half of biodiversity and quarter of carbon versus primary forest. Fragments need to be over 10,000 ha to recover.

Quality of audits. Answering strong questions on credibility of RSPO audits. A panelist suggestion to break link the between company that hires the auditor by allocating the auditor at random. No other concrete answer. Resolution for GA later on this issue. RSPO says it will fix the situation.
Link: Dodgy auditors undermine palm oil group’s ‘sustainability’ claims 16 November, 2015 https://eia-international.org/dodgy-auditors-undermine-palm-oil-groups-sustainability-claims


RSPO Next. Some worries about its take up rate and cannibalise demand for regular CSPO but RSPO reps strongly assure audience this will not happen! Look also at "free and fair labour" and "commensurate effort."  

Jurisdiction approach.
  • Sabah says it has to be competitive and needs to attract investors including for POIC project. Why would buyers focus on Sabah product. If palm oil market collapses, Sabah can still sell if it goes branded. Sabah confirms that its goal for 100pct CSPO is entirely RSPO.
  • Seruyan in Central Kalimantan. Its Bupati/Regent worries that deforestation has not benefited locals peoples. Sees palm and other commodity certification has the only way to help smallholders. Fears for loss of market access. Not sure yet which brand to adopt.
  • South Sumatra. It's Governor reports 200,000 smallholders for oil palm. It will work with assistance from IDH in a program that covers palm oil and other commodities.
  • RSPO explains that the jurisdictional approach is to reduce transaction cost for smallholders. Save on HCV assessment, HCS and SEIA by doing all this at landscape level as shared cost with government and NGOs. This will also remove need for HCV set-asides and allow land swaps. With such scale, individual smallholder transaction cost can fall. Question was asked to audience if the jurisdictional approach will help smallholders. Response perhaps less than half certain?
 Including smallholders.
  • Lots of talk of smallholders. A panel leader asked if there is a need for "RSPO Light" for smallholders as there has been a lot of talk of smallholders but few of them. [Reader feedback: Instead of making the requirements easier for smallholders, it was tightened further. They are certified under Group Certification. The first draft review was rejected by stakeholders (mainly grower) and the RSPO WG came up with the 2nd draft - still not yet approved. The requirement for smallholders is not much easier or simpler compared to what a large company has to do. There has not been much voice or bargaining from the smallholders all this while, in spite of having a seat. I am sure strong representation can do this more justice].
  • Editor: past promotion of smallholders has centered on talk of increased yield including startling big claims e.g. 50pct yield increase.
  • This time a RM150,000 study done by UPM on Keresa and Sapi mills taking into consideration tree age and other key factors. Editor: But questions remain on key issues: i) on cost of certification - not asked, ii) no clear presentation of before-after time periods for the changed outcomes, iii) with "to be certified" status included, perhaps not an unsurprising to see some focus on perceptions instead of hard data (more of the latter better?), and iv) clarification on who paid for what - did palm oil mills pay for smallholder groupings and extension services or was it MPOB?
  • From question from the floor on funding of reports, ISEAL panelist noted their efforts to encourage studies without directly paying for it. Panelist also raised question of RSPO transparently looking at possible negative outcomes of its programmes. Editor: Indeed, on the side-lines an NGO complained to me that one presenter was too concise about sources of funding: "That study was actually mostly paid for by xxxxx! Why wasn't that mentioned?" But I do think that if you do need a specific study, you may need to fund it - but that does means that the study has to be more rigorous than ever!
Floor price? Ceres asked about floor price on certificates set at smallholder costing. MPOA notes that asking smallholder to make a "leap of faith" to achieve only a 20-50c premium is a problem! There needs to be buy in from smallholders i.e. there need to be solid financial benefits. Committee is being set up to look at the floor price question. Editor: Some very senior agriculture specialists worry that a floor price would become the traded price and would end up distorting the economics of certification. [Reader feedback: For many years the RSPO ex-president (Jan Kees Vis of Unilever) has made it clear that there should be no discussion on premiums for CSPO etc. This is apparently against competition rules. I thought premiums are based on willing buyer,willing seller basis?]
  

RSPO Sec-Gen's wrap-up comments. Includes:
  • "Beli yang baik" consumer campaign in Indonesia.
  • Singapore's "Axe the Haze" consumer campaign. He notes that buying RSPO products is one part of the solution, but that alone cannot save the haze problem.
  • Markets. CFNA participation about China market and looking to sustainable guidelines for China investments overseas. UK collaboration via Infit (fact check needed). Editor: Attendees point out that China and UK say they will commit to RSPO and other credible programmes. Link: RSPO statement on UK progress report News, 18 November 2015 http://www.rspo.org/news-and-events/news/rspo-statement-on-uk-progress-report
  • EU has goal for 100pct sustainable. Latest national alliance (to drive uptake) is for Italy.
  • Remediation and HCV Compensation Procedure policy has been endorsed by the Executive Board. This was 4 years in the making. (Editor: Specialists note that NGOs were surprised by relatively low level of compensation funds generated by the RSPO companies. but this policy is regarded as being a limiting factor in new grower membership sign-ups).
  • Those not submitting ACOP reports will be taken to task. 15 members have been terminated and 20 suspended with due process. Action taken last year too.
  • RSPO members need to band together to mitigate the haze. RSPO will convene the best on this. Certified areas are safe haven from rampant fires. How to help outside concessions? Concession map disclosure is important (Editor: legal position is that information may be voluntarily released by the company in Indonesia and many countries but Malaysia map release legality not checked yet?). Look and act beyond boundaries. In 6 months, to come out with something concrete on this.
 
RSPO GA13. Includes financial report. RSPO update on its smallholder fund - noting slow disbursement trend. Proposal from Oxfam, something long needed - a comprehensive smallholder focus (voted for strongly at 186). Code of conduct resolutions to strengthen action on members not promoting palm oil. Committee set up to look at floor price. Editor: Broadly, no major contentious resolutions as some in audience says RSPO issues are in maturity (and specialists also say some contentious issues were taken off!).

Post GA ruminations. Editor: RSPO Next expected to generate some legal compliance worries resulting in time out for possible reconsideration of committed ratios / volumes matching approach.

  
........................
 

Editor's notes for Day 1.

 
Editor's notes and items noted by industry: a) "Free and fair labour" concept which includes living wage and industry note on problems of casual labour, b) apparent dial-back on RSPO HCV Compensation which has been challenging RSPO membership growth - specialists note simplifications of the matrix into two columns (instead of three which previously differentiated members with certified units and members without) and provision for certificates even after a tough Compensation status (not entirely surprised given the halt in production capacity market share growth at 19-20% this year and uncertainty driven by HCV Compensation?), c) Convergence talked of for HCS methodologies of RSPO GHG Calculator, HCS+ of Sustainable Palm Oil Manifesto, and Greenpeace's HCS Approach (which does notes it is different in protecting young regrowth trees), d) Marketing efforts in China and India - RSPO promoters continue to ask for tariff differential to favour CSPO in India, e) Side-lines chatter about the relative silence on the Haze crisis, f) intriguing to see how mills market themselves for traceable-to-mill GreenPalm certificates, g) oleochemicals wondering about traceable oleo amidst frank views by L'Oreal that its buyers only really care about safety and animal testing issues, h) Lots of talk of including smallholders and government, both of which lacked clear focus for quite a while but now to receive more attention and i) the related shift to jurisdictional marketing (sub national units eg. South Sumatra with IDH and Sabah with RSPO?).
 
 
I am attending RSPO RT13. First talk attended on social and labour issues. Prevalence of casual plantation workers, lack of independent unions, need for living wage, problem of forced labour and female workers issues discussed.
 
HCS+ study sets 75tC/ha hard threshold within carbon neutral approach and seeks more benefits to smallholders and fairer model. Looking to converge with Greenpeace's HCS Approach.
 
 
 
Greenpeace HCS Approach for landuse planning. Reports Asian Agri and BASF to join. Not just palm oil but also for pulp and paper, rubber and soya. Geographic expansion to Africa and Lat Am.
 
At RSPO RT13 talk on FFB supply chain issues. Talk by WWF Indonesia.
 
Traceable Greenpalm certificates coming January 2016!

 
On attendance, organizers report 800 plus. Still strong despite switch from Bangkok venue plan. Expert observers reckon on 1/3 new faces including lots of apparent non Asia origin young executives and many NGOs new to palm oil scene.