01/01/2008 (The Star Online) - Oil palm companies are subjecting themselves to scrutiny to meet consumer demand for eco-friendly palm oil. Palm oil is heading for certification – the first tangible sign of a commitment towards sustainable production of the versatile yet controversial commodity.

The first certificate is expected to be issued by the first quarter of 2008, after the call for environmentally and socially responsible production of the crop came five years ago.

Buyers are waiting anxiously for the certification as they have promised to supply certified palm oil to their clients – oil refiners, food manufacturers, consumer goods producers, retailers and even biofuel plant operators – who in turn have set deadlines to phase out the use of palm oil from uncertified sources.

Environmental campaigns in the West linking palm oil production to orang utan extinction, peat fires and displacement of indigenous communities have resulted in consumer boycotts of supermarket chains and demand for sustainable palm oil.

The march towards biodiesel production using palm oil has also met with warnings that the so-called green fuel could be a net emitter of greenhouse gases and accelerate, instead of stalling, climate change. There is also concern that the biofuel rush could come at the expense of food production, given that palm oil is the world’s most important edible oil.

At the recently-concluded fifth meeting of the Roundtable on Sustainable Palm Oil (RSPO) in Kuala Lumpur, the verification and implementation mechanisms of the certification system were presented to some 500 participants from 30 countries representing major players in the palm oil supply chain, from growers to retailers, banks, investors, and pressure groups from environmental and developmental organisations.

The certification process will authenticate growers’ claims that their products are derived from plantations that follow the Principle and Criteria (P&C) set by the initiative. It will also enable manufacturers to assure consumers of product “traceability” through eco-labelling.

Palm oil is the most popular vegetable oil in the world commodity market, with 37 million tonnes produced last year. With its membership accounting for almost 40% of palm oil production and utilisation in the world, RSPO is regarded as an influential force for sustainable palm oil.

But several issues remain unresolved after five years of deliberations. Expansion of oil palm estates on fragile ecosystems and displacement of indigenous communities are two contentious issues that divide supporters and critics of RSPO. 

Indonesia overtook Malaysia as the largest oil palm producing country with an output of 16 million tonnes last year. The area of land under oil palm plantation in Indonesia tripled between 1995 and 2005. Close to six million ha of plantation has been developed and millions more are planned.

A report by the Indonesian Forest Ministry and European Union states that to meet the rising world demand for palm oil from 20 million tonnes to 40 million tonnes by 2020, some 300,000ha of new estates will be needed each year. It added that inevitably, most new estates would come up in wetlands, as the more desirable dry lands are already occupied.

Such expansion plans are largely driven by the demand for biofuel in rich nations. In early 2007, the European Union endorsed a minimum target for biofuel to constitute 10% of its transport fuels by 2020. 

Greenpeace has called for a moratorium on deforestation of peat swamp forests for oil palm expansion. Its political advisor for energy Wolfgang Richert says just like the campaign on soybean in the Amazon which got three major traders agreeing to stop expansion in the Brazilian rainforest, Greenpeace will continue to pressure RSPO members to commit on this important move.

“It’s crucial for RSPO to get rid of partial certification. Otherwise, it’ll just be another green-washing exercise, undermining its credibility.” 

Richert also notes that Principle 7, which forbids new planting on primary forests or areas of High Conservation Value from 200, is weak.

“You can argue that most Indonesian forests are not primary forests anymore. So, RSPO will actually (end up) certifying palm oil produced from deforestation of secondary forests. RSPO members should commit to develop on the millions of hectares of abandoned, degraded land instead,” he says.

Friends of the Earth (FOE) highlights that as RSPO only gives sustainability certifications for each plantation, other plantations in a company could remain unsustainable.

“Inevitably, palm oil companies will use a sustainability certification to green-wash, even though it will by no means guarantee that the company is guilt-free of environmental and social violations. The RSPO must refuse to certify palm oil coming from any company still involved in destructive palm oil production,” said Paul de Clerck, FOE corporate campaigns co-ordinator.

FOE Europe chapter is campaigning against the EU biofuel policy, cautioning that the demand for palm oil will drive conversion of forests to plantations on a scale far beyond what the RSPO could guarantee is sustainable. It has called for a moratorium on European financial subsidies and targets that encourage the development and production of large-scale biofuels.