The Oil Palm

RSPO Scheme Questioned in the Malaysia Star

As Malaysia announces plans to develop a national palm oil certification scheme to ensure continued opportunity for growers, the Malaysia Star published an editorial questioning the ability of the Roundtable for Sustainable Palm Oil (RSPO) to deliver these services. This weekend the Star posed the question: Do we need the RSPO? The representation of Malaysian industry and especially growers compared to NGOs and to large Western consumer goods manufacturers is at the heart of the author’s criticism of RSPO.

Usually it is environmental groups, who seek to influence the palm oil market based on their ideological views, criticizing the RSPO for not going far enough in regulating industry members. The source of this latest criticism demonstrates that the concerns expressed by environmental organizations amounts to little more than alarmism, and in fact distracts from the unabashed effort to drown out producers in the decision-making process. As noted in the Malaysia Star editorial, growers account for only 18% of the organization’s membership of 495 members, despite being disproportionately affected by the organization’s decisions. The Malaysia Star points out the inherent, problematic effects that the RSPO poses to growers through its current structure –

“…[Take] composition by category. Oil palm growers have just 87 members, a mere 18% but palm oil processors and traders have 191 members or 39% while consumer goods manufacturers and retailers have 186 members or 38%. Again, growers are swamped.

Perhaps there are executive board provisions for growers, but no. It looks bad, real bad. They have four allocations, the same as for NGOs, with two for environmental ones and two for social ones. Palm oil processors, consumer goods manufacturers, retailers, and bankers and investors have two each, again swamping growers.

That means oil palm growers are overwhelmed three to one by others on the executive board…How growers have allowed themselves to be so weakly represented on the RSPO to the extent that they have much less say than others is impossible to understand. At the least, they should have had an equal representation – it’s their product which is being certified.”

The RSPO is an evolving body of cooperation between various stakeholders. The disproportionate representation in the favor of environmental NGOs and their private sector patrons helps to explain why standards are evolving in a manner that smallholders feel discriminates against them. Given that 39% of Malaysian palm oil is produced by smallholders this is indeed worrying. Just this year, a US zoo became the newest member of the RSPO, though it is unclear what interest they have in the industry, apart from being ideologically sympathetic to environmental NGOs. For the RSPO to remain credible as a collaborative organization established to address concerns about the industry and work towards a more sustainable future, a better balance needs to be struck, both in terms of membership and approach.