The Oil Palm The Oil Palm

Palm Oil Leads Sustainability Certification

Other commodities should be put under the spotlight

IISD (the International Institute for Sustainable Development) has just published its second Sustainability Standards Initiative (SSI) report.

Its first SSI published in 2014 was controversial. Why? Because it was clear that palm oil was leading the way in terms of food commodity certification, yet IISD was highly critical of both palm oil and palm oil certification.

What was also clear in the 2014 report was a general ambivalence to the social and economic aspects of certification. There was acknowledgment that it is Western demands driving sustainability certification, and that this is imposing a higher cost on palm oil producers, with no corresponding financial return. However, there was no acknowledgement that this situation works against sustainability.

Not much has changed in the most recent report. The report covers the contribution of sustainability initiatives to biodiversity protection.

This presents a problem. Sustainability – and any associated certification – covers environmental, social and economic concerns. The latter are ignored in the latest SSI report. Even the emphasis on biodiversity protection is narrow; the environmental scope of sustainability certification is much broader than this and needs to be acknowledged as such.

The Western-funded report underlines the broader Western attitudes towards what certification should do, i.e. protect forests. IISD and its funders are apparently much less interested in whether certification contributes to poverty reduction than they are in protecting landscapes.

There’s also a reluctance to state that palm oil and palm oil certification aren’t the bête noire of the environment and are performing better than many other commodities and schemes.

Although the SSI has toned down its criticism of palm oil, there is very little recognition of the strides the palm oil industry has made and its superior position relative to other commodities.

Consider the following facts emerging from the SSI report.

Palm oil certification (under RSPO) covers 20 per cent of global production. Voluntary soybean certification covers 1 per cent of production. Voluntary maize certification covers less than 1 per cent of global production.  As a share of global production, palm outperforms coffee, tea and bananas. Major crops such as wheat barely figure; beef and livestock don’t even rate a mention.

The performance of the palm oil industry is highlighted further by the following factors: total global certified crop area, areas associated with deforestation, the criteria used in each scheme.

According to the SSI, the certified area for oil palm production is around 2.62 million ha. The certified area for soybean production is around 1.87 million ha. Maize clocks in at around 150,000 ha. In other words, palm’s certified area is around 50 per cent higher than soybean, and around 15 times higher than that of maize.

It has been noted well over the past two years that palm oil’s contribution to global deforestation is low. Deforestation from beef is around ten times that of palm oil; soybean is approximately double; maize is around 20 per cent higher.

The conclusion to be drawn here is that palm oil’s overall deforestation footprint is smaller, and its certification footprint is larger. Soybean is responsible for more forest loss than palm and its management of existing cropland is poorer. The same can be said for maize.

It should be noted that SSI’s assessment for palm oil doesn’t include government-mandated sustainability schemes such as MSPO.

In addition, the scope of certification schemes should be considered. Certification for maize production is under organic standards. Organic standards are not environmental or sustainability standards in the same vein as RSPO. Organic standards are generally concerned with minimising inputs rather than protecting, say, high conservation values. Compare this with RSPO, which incorporates forest protection, prohibitions on new plantings, and greenhouse gas emissions.

There are several other things that should be considered when examining the contribution of sustainability standards to biodiversity protection.

First, is the contribution towards smallholders and poverty reduction. Despite what some campaign groups might say, smallholders and the world’s poor do contribute to environmental degradation – this includes biodiversity loss. It is therefore vital that certification – and therefore better production techniques – are made available to the world’s smallholders, or there is at least some effort to include them. This is happening actively through RSPO, MSPO and other mandated schemes.

Second, IISD does not think it is appropriate to acknowledge that voluntary standards, as effective as they might be, are no substitute for strong legislative and regulatory frameworks in producer countries. Voluntary standards are always a more expensive option; if global demand for a commodity exists, there is always likely to be demand for a non-certified product.  This is borne out by the report’s repeated references to high levels of demand for non-certified palm and soybean in countries such as India and China, which constitute the majority of global demand.

The underlying solution is therefore better regulation. There is no recognition in the report that things such as better regulation of land-use planning, and stronger enforcement of biodiversity protection laws will likely have a much greater impact on biodiversity protection than, say, tightening up existing voluntary standards.  This is important when considering commodity exports from different jurisdictions. By way of example, there is considerable pressure for Brazilian beef producers to adopt sustainability standards, but no such pressure on British producers.

So what are IISD’s motives here?

The first appears to be to keep the certification debate focused on Western concerns about the environment, and push social and economic concerns to the periphery.  We can surmise that IISD likely did this report to help push the European agenda to regulate palm oil.

The second appears to be to maintain a negative attitude to commodity production, specifically palm oil, in developing countries.  There appears to be a reluctance to either laud or criticise any certification scheme or commodity. This is a shame. From IISD’s data, it’s patently obvious that palm oil leads the global agricultural community in certification; whereas competing oils (soybean) and other staples (maize, wheat) are laggards. An obvious conclusion and recommendation is that campaign groups put more of their energy into advocating for stronger sustainability standards of palm oil so greater uptake of other commodities can occur.