Markets working to support sustainable development

Roundtable for Sustainable Palm Oil (RSPO)

The Roundtable for Sustainable Palm Oil (RSPO) promotes the growth and use of sustainable oil palm products through what the RSPO calls “credible global standards and engagement of stakeholders”.

The RSPO is a forum for discussion of palm oil sustainability, in addition it has produced a set of standards for RSPO certified palm oil. Members wishing to sell RSPO certified palm oil must comply with the production and supply chain standards detailed below. Certification is by an independent third party auditor.

Production Standards*   

  • Commitment to transparency
  • Compliance with applicable laws and regulations
  • Commitment to long-term economic and financial viability
  • Use of appropriate best practices by growers and millers
  • Environmental responsibility and conservation of natural resources and biodiversity
  • Responsible consideration of employees and of individuals and communities affected by growers and mills
  • Responsible development of new plantings - Criterion 7.3: “New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.”
  • Commitment to continuous improvement in key areas of activity

*limited adaptations for National Interpretations

Supply Chain Standards

  • RSPO approves of 3 supply chain management systems: Fully segregated; mass balance; book and claim
  • Independent verification of the traceability procedures required by accredited certification body.

Consumption

  • Many manufacturers and retailers are now employing a sustainability policy towards palm oil sourcing.
  • Manufacturers can either directly buy certifed palm oil or they can partake in the market for sustainable palm oil certificates (Green Palm)
  • The establishment of the RSPO is partly in response to industry fears of consumer boycotts and/or disapproval.

Trademark

In May 2011 RSPO released a trademark so that companies can show to consumers that they use RSPO-certified palmoil. 

Market coverage: 

Figures from the RSPO for 2013 show that there is a total area of 1,215,525 ha of palm oil under RSPO certification. Of ths 45% is in Indonesia and 45% in Malaysia. For 2012 the supply of certified palm oil stood at 6.72 million tons. Worldwide production of palm oil for 2010 was estimated to be about 46.9 million tons (Economist).

 

Background information: 

Non-profit established in 2004 with the backing of WWF and cooperation of Aarhus United UK Ltd, Golden Hope Plantations Berhad, Migros, Malaysian Palm Oil Association, Sainsbury's and Unilever.

Based in Zurich, Switzerland. Secretariat has main office in Kuala Lumpur and a satellite office in Jakarta.  Has multi-stakeholder membership base, growing from the original 10 members to 389 as of 2009. There are a total of 1338 members, including 44 certified growers, 212 certified mills, 246 supply companies, and 633 facilities (only 9% of members are palm oil producer organisations). 

Funding source: 

Total Funding (2009): 2,978,509 RM (2010US$962,830)Membership (84%), sponsorship (15%), donations (1%).Certification outsourced to 3rd party certifiers. Owners or operators of Mill pay certification costs – competition between certifiers designed to keep prices low.

Notable information: 

The Mill owners or operators pay for the costs of certification – small growers who supply the Mill in question have 3 years to comply with RSPO principles and criteria.

The RSPO intervention in the case of Sinar Mas, has been lauded by Greenpeace as a potentially defining moment in the RSPO’s history – the case is ongoing, however RSPO has rounded on one of its major members for failing to comply with Indonesian environmental laws and RSPO membership standards.

At the latest Round Table (RT8) in November 2010 there has been major disagreement between industry and environmental groups with each accusing the other of 'block voting' and attempting to change the direction of the RSPO. The contentious issue of including GHG emissions within the sustainability metric of RSPO certification is ongoing. Disagreement between environmentalists and industry actors threatens to devalue RSPO as South East Asian industry representatives are investigating the possibility of forming an alternative roundtable and industry organisation.

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