The palm oil debate has focused on the industry’s negative impact on forests and biodiversity. Far less attention has been paid to workers, smallholder farmers, indigenous peoples and local communities. There is a need to humanise the conversation and ensure that palm oil delivers positive social and environmental impact on the ground. This was a key theme at this year’s European Sustainable Palm Oil Dialogue.
The conference convened representatives of consumer goods manufacturers, palm oil suppliers, certifying bodies, governments and NGOs. It avoided tricky conversations over sector-wide failures to meet 2020 No Deforestation, No Peat, No Exploitation (NDPE) commitments. Instead, it focused on how Europe can eliminate deforestation from key commodity supply chains and help build a “forest-positive” future.
About 80% of global deforestation is driven by agricultural expansion, and the EU is a major importer of forest-risk commodities such as palm oil, beef, soy, cocoa, maize, timber and rubber. Between 1990 and 2008, the EU consumed a third of globally traded forest-risk commodities, accounting for around 10% of worldwide deforestation linked to the production of goods and services.
The EU is a major importer of forest-risk commodities, such as palm oil, which cause deforestation around the world. New legislation is set to be proposed to reduce the presence on the EU market of products associated with deforestation.
In July 2019, the European Commission published its plan on Stepping up EU Action to Protect and Restore the World’s Forests. The plan prioritises sustainable, deforestation-free supply chains, transparency and cooperation (between producer and consumers countries, businesses and civil society). These commitments were then re-iterated in the European Green Deal, the EU Biodiversity Strategy to 2030, and the Farm to Fork Strategy. The latter two noted that the Commission “will present in 2021 a legislative proposal and other measures to avoid or minimise the placing of products associated with deforestation or forest degradation on the EU market”.
Collective bargaining rarely exists for workers in the palm oil sector, and independent unions that protect their interests are few and far between
This upcoming proposal will represent a more holistic, integrated approach to protecting and restoring forests, according to Astrid Schomaker, director for global sustainable development for the European Commission, who was speaking at the conference. Like the EU Forest Law Enforcement, Governance and Trade Action Plan (FLEGT), it will include mandatory due diligence for large operators and traders. It will prioritise forest partnerships with producing countries and the strengthening of international cooperation. But the new proposal will have a greater focus on labour and human rights, to try and build responsible value chains.
Ruben Brunsveld, deputy director for Europe, Middle East & Africa at the Roundtable on Sustainable Palm Oil (RSPO), a body that certifies as sustainable about 19% of the world’s palm oil, highlighted the moral responsibility for Europe to become forest positive. Its colonial history of exploitation means action is needed to reconcile past harms and help producing nations to make positive change on the ground. A request for direct finance to help achieve these goals was made clearly and repeatedly at the conference.
For the millions of workers who earn a living in palm oil production, there is certainly need for change. Elles van Ark, managing director at CNV Internationaal, which works with trade unions in developing countries to protect workers’ rights, explained that collective bargaining rarely exists for workers in the palm oil sector, and independent unions that protect workers’ interests are few and far between. In the same presentation, Van Ark called on the RSPO to create a multi-stakeholder taskforce on social dialogue following their roadmap.
Inclusivity should also extend to oil palm smallholders and their perspectives should be part of decision-making, attendees heard. Until recently, and despite producing up to 40% of the fresh fruit bunches that Indonesia and Malaysia’s palm oil is derived from, smallholders, who tend to farm oil palm on small areas of land, have been largely left out of the discussion. Now it seems there is more concerted effort to engage them, with both the RSPO and Indonesian Sustainable Palm Oil (ISPO) certification schemes including separate requirements for certification to make commitments more realistic for smallholders.
As certified oil fetches a higher price, there is a financial incentive for mills run by major palm oil companies to support smallholders in getting certified: both stand to earn more. Beyond generating additional income for farmers, certification offers positive social impacts for farmers and their communities on the ground.
Rukaiyah Rafik from FORTASBI (Forum Petani Kelapa Sawit Berkelanjutan Indonesia), a forum for Indonesia’s sustainable palm oil farmers, was optimistic about the impact of certification on farming communities. She explained that certification empowers groups to get organised and identify needs within their communities, and that certification has a notable impact on gender equality, with gender inclusivity an integral part of attaining RSPO certification. Rukaiyah also said cost is a major barrier for smallholders, and that direct financing will be key to increasing certification.
Members of the Consumer Goods Forum, including Unilever, Nestlé and Pepsico, were represented at the conference, and their respective contributions to the dialogue indicate they are aware of what is needed. Beyond certification, corporate action can make a considerable positive difference: these organisations have the power, influence and finance to help drive change at a systemic level.
Corporate action can make a considerable positive difference. These organisations have the power, influence and finance to help drive change at a systemic level.
According to IDH, a sustainable trade initiative who hosted the conference online in collaboration with the European Palm Oil Alliance (EPOA), 90% of palm oil imported to Europe for food, animal feed and oleochemicals in 2020 was certified by the RSPO. Moreover, 100% of the palm oil used in Europe’s refineries was covered by NDPE policies. This is clear progress, but Europe only accounts for 10% of global palm oil usage. Today, India represents the largest market, followed closely by China as the second biggest importer. The importance of these other major players cannot be overstated when considering how to drive forest-positive impact.
Discussions on how companies can uphold their commitments and take direct action often note the logistical and technical challenges of understanding what is happening on the ground. These may be real, but multinational companies can leverage their position and extend their sustainable palm oil commitments to their operations in other countries.
For example, Unilever’s 2018 Annual Communication of Progress (ACOP) to the RSPO, reported that 97% of palm oil used to manufacture their products in Europe was RSPO-certified. That number was just 48% and 41% in China and India respectively. Even if it is too challenging to use high volumes of certified palm oil, companies can purchase RSPO credits from independent smallholders which help generate finance to support smallholders to get certified. Such efforts can strengthen company commitments to back sustainable palm oil.
Companies also need the opportunity to take direct action, which is why collaboration is needed. The National Initiatives for Sustainable Oil Palm Smallholders (NI-SCOPS Programme) from Solidaridad and IDH, is developing a government-to-government initiative in Indonesia, Malaysia, Nigeria and Ghana. The programme takes a “landscape-level approach”, meaning it integrates policy and practices across multiple land uses in a given area. This is usually to help ensure responsible and fair use of land while empowering local actors to mitigate and adapt to climate change. This is another tangible way to achieve impact and improve governance at the national and local level, as well as giving agency to smallholders and local communities.
There is no doubt that certification has and will continue to catalyse change in the palm oil sector, but the landscape approach may offer an alternative and complementary model for delivering forest-positive impact. Palm oil is just one forest-risk commodity produced in tropical landscapes. But the lessons learned by this sector, and the apparent willingness of powerful organisations, like those members of the Consumer Goods Forum, to do better could certainly pave the way for transforming the wider commodities market.