Amidst the apparent worry of palm oil origins, most vocally perhaps by Malaysia palm oil on the EU’s non-deforestation import rules, let’s look at the positive. This hardly seems to reach the headlines or wider discussions. However, it is quite acknowledged in specialist circles. The new cut-off dates are actually surprisingly inclusive. For instance, more recent production regions like Sarawak, which had issues meeting RSPO’s big 2007 cut-off date, now have a pathway under the EU’s 2020 cut-off. Work needs to be done, though, to prepare and share the data for due diligence, and smallholders need to be included. Recall that Indonesia oil palm smallholders are on this page, and have set out their ask for the EU to include 30% of material from smallholders.

 New cut-off dates inclusive of millions of hectares of conversion:

• Palm oil. (i) RSPO cut-off date 30 Nov 2007. (ii) ISCC cut-off date 2011. (iii) Wilmar recognises 31 December 2015 as the cut-off date for supplier compliance with all provisions of the NDPE policy.

• Timber. FSC chose the year 1994 as its cut-off date. After that point, certification of plantations converted from the natural forest is excluded.

• The radically changed cut-off dates from (i) EU’s deforestation regulation (EUDR) mandatory due diligence affecting palm oil and timber products (as well as others) is 31 Dec 2020 and inclusive of 13 years of conversion (versus the de facto 30 Nov 2007 of the RSPO), and the (ii) FSC’s changed P&C rules for 31 Dec 2020 cut-off to be inclusive of 26 years of conversion (versus 1994) are big game changers.

• FSC. Under Motion 37, the FSC, on 13 Oct 2022, voted to move the crucial cutoff date from 31 Dec 1994 to 31 Dec 2020. Mongabay (Oct 2022), notes: “With FSC rule change, deforesters once blocked from certification get a new shot…. logging companies that have cleared forests since 1994, but before 2020, will be allowed to obtain certification from the body, something they weren’t allowed to do before… To qualify, companies will have to restore forests and provide a remedy for social harms done in the 1994-2020 period in their concessions…. The decision has sparked responses from both critics and supporters, with the former saying the new rule rewards known deforesters, and the latter saying it opens opportunities for forest restoration and remedies for Indigenous and local communities.” FSC (2022a) argues that “millions of hectares of forests can be restored and then become FSC certified and managed in a responsible manner.” FSC has been considering revising its 1994 cut-off date on forest destruction for at least 11 years (FSC-Watch, 2022). Read about the FSC Remedy Framework consultation (FSC, 2022b).

• EU due diligence. (i) 31 Dec 2020 deforestation cut-off date is volume expansive (versus the popular RSPO Nov 2007 cutoff) and could offer more origins and suppliers market access depending on whether stricter voluntary cutoffs are preferred. (ii) Traceable to farm. (iii) Due diligence. Failure to comply could result in fines of up to 4% of a company's turnover in the EU (and not 8% in an EU country, as previously suggested).

research@segi-enam.com | 2 March 2023