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Greenwashing the palm oil industry

3 February 2010 14 Comments
Environmentalists argue that what began as an initiative to clean up dirty palm oil production practices, the Roundtable on Sustainable Palm Oil has become little more than an NGO-endorsed greenwashing tool. Rebecca Zhou reports.

Due to an increase in worldwide demand for food, palm oil production has grown dramatically since it began in the early seventies. Image: CELCOR

Due to an increase in worldwide demand for food, palm oil production has grown dramatically since it began in the 1970s. Image: CELCOR

The Roundtable on Sustainable Palm Oil (RSPO) was set up by the World Wildlife Fund (WWF) to involve companies in creating more sustainable ways of producing palm oil. However environmental experts believe that not only is the RSPO ineffective, it has become a way to green wash poor practices.

“The RSPO gives the companies a green front and encourages more consumption, which is precisely the cause of the problem,” said Valerie Phillips, forest campaigner of the Greenpeace branch in Papua New Guinea, one of the three countries most adversely affected by the palm oil industry.

The Roundtable board includes stakeholders from producers, processors to traders and retailers who work with NGOs to develop a set of ‘Principles and Criteria’ that all member companies must follow to be certified.

One of the environmentalists’ main concerns is that there is no legal framework around the ‘P&C’ and companies work at their own pace to meet them. Often they are not met at all.

“It is a voluntary initiative so the company cannot even be held accountable for failing to meet standards,” said Eddie Tanago of the Centre of Environmental Law and Community Rights (CELCOR) in Papua New Guinea.

“Up till now there are 11 or 12 companies certified under RSPO mechanism, however all of the companies have gotten complaints because of most of them are not following the principles and criteria of RSPO but still have the certificate,” said Agrofuels campaigner from Friends of the Earth Indonesia, Torry Kuswardono.

WWF’s Global Forest and Trade Manager Lydia Gaskell says that companies wanting to be certified are given action plans and targets according to ‘the size of the company and how sustainable they are.’

“To take a company off certification for failing to meet standards and criteria is at the very least, impractical,” said Gaskell. “There would be no need for the RSPO if everyone was meeting those principles and standards from day one.”

The fact that action plans and targets are negotiable is another weakness, said Grant Rosoman, Forests Campaigner for Greenpeace International. He believes that WWF’s close affiliation with businesses has led to compromises in their conservation efforts.

Misuse of environmental indicators

Under the P&C, the company must work with WWF to identify ‘High Value Conservation Forest’ (HCVF) areas prior to plantation. WWF, with the assistance of other independent consultancies such as Daemeter Consulting use a HCVF ‘toolkit’ as a framework to define these areas.

“They’ve taken the HCVF concept and misused it,” said Rosoman, “The HCVF is essentially open to interpretation and when used this way, the assessments see heavy interference from the company.”

“Say the assessment is done and 50 percent of the land is written off as being primary forest. The company says not feasible. It then becomes negotiable with WWF to reducing that down to a more ‘economic level’. In the end it gets to something ridiculous like only 10 percent of the area.”

WWF has been under fire in the past for receiving enormous levels of funding from corporate companies. In 2007, it received $20 million from Coca Cola for research into water efficiency. Its 2008 annual Financial Report recorded revenue of $196.5 million while Greenpeace reported a 2007-08 revenue of a little over $40 million.

“WWF needs to take a side and really stick to their guns and not be influenced by the client. Poor HVCF assessments risks good work done on the ground,” said Rosoman.

Kuswardono is also concerned with the lack of transparency with HCVF assessments and the role that WWF plays in the process.

“It’s hard to know what WWF’s role is because they are always acting in the gray area between the government and the company,” said Kuswardono.

“Although WWF will set principles and criteria which promote their interests in HCV forests, they won’t push the companies to implement them.”

Violation of land rights

Investigations into RSPO certified company Wilmar International show that it has been clearing land without proper consultation with communities. Criterion 2.3 in the P&C states that the company must ensure ‘use of land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent’ and that prior negotiations with locals must involve ‘open sharing of all relevant information in appropriate forms and languages, including assessments of impacts, proposed benefit sharing and legal arrangements.’

Kuswardono says that when companies do consultations, they are insufficient and often misleading.

Child pushing a wheelbarrow. Image: CELCOR

Child pushing a wheelbarrow. Image: CELCOR

“They will use tactics of division by selecting certain figures of the community who support their projects and cause a divide between communities in this way.”

A joint investigation by NGOs into Singapore palm oil giant Wilmar International in October 2009 revealed that crucial information about land rights were often omitted during negotiations with community. The team discovered that a large majority of local people living in the Landak plantation area had been misled into relinquishing their land to the company.

Under Indonesian law, the land leased to a company is returned to the government, and not the original owner. The investigation showed that those who agreed to relinquish their land did it under the belief that they could reclaim ownership after expiration of the lease.

The investigation team reported that ‘they [community leaders] vehemently asserted that the lands were theirs and should revert to them and that they had only lent the lands to the companies for their use (hak pakai). Two interviewees in the widely separated districts went on to say that they would never have agreed to release their lands if they had known that this was permanent.’

Health issues

A study by CELCOR in 2006 reveals that some of Cargill’s plantations managed by its subsidiary Higaturu, have also gravely affected communities’ health.

In 1976, Higaturu, a subsidiary of Cargill started a plantation in Popondetta in Oro Province, where the Kokoda Track is situated. The health effects of the mill on local communities for the past 33 years has been severe and in some cases, irreversible.

The study documented the effects of nine toxic chemicals such as the herbicide ‘paraquat’ used commonly in all plantations as well as a variety of insecticides. Its effects range from skin diseases, ulceration and alterations to the Central Nervous System resulting in intense nausea and loss of reflexes. Paraquat was banned by the European Union (EU) in 2007 but remains legal in most developing countries. Though it is still commonly used in Australia and New Zealand, there are strict regulations governing it.

“The people live all the way down near the rivers there and those rivers have all been polluted with the effluent from the mills. The company reports claim that it is a hundred per cent treated but it’s not,” said Tanago.

“The people depend on the river for living. They drink from it and they wash their clothes in it and they continue to do so because they have nowhere else to go.”

In response to allegations of pollution made by CELCOR and Friends of the Earth to the RSPO grievances panel in 2008, Wilmar responded that they would prepare ‘to adopt a precautionary approach by conducting Environmental lmpact Assessments, a full HCVF Assessment and Social Impact Assessments before any land development in the area commences.’

But Tanago maintains that he has not seen any real commitment from the company.

“Their complaints have fallen on deaf ears. The company says that there is no scientific backing and sometimes they will just refuse to answer them. There is evidence of suffering though. About 60 per cent of a village of 200 people are affected. Only few ever speak up about it.”

WWF also seems to believe that complaints from the communities and findings of NGOs require more substantial evidence.

“There will always be allegations, and WWF can’t be everywhere at once.”

“Cargill and Wilmar are definitely not a hundred per cent there yet,” said Gaskell, “In fact I wouldn’t say that any of the companies are quite there yet.”

“WWF is very much aware of the situation on the ground,” said Grant Rosaman, forests campaigner for Greenpeace International, “But when WWF becomes an external assessment body for the companies, the companies become their clients and it gets very difficult for them to stay loyal to their agenda.”

Forest Restoration coordinator for WWF Indonesia, Fitrian Ardiansyah concedes that some companies on the Roundtable have continued their malpractices.

“This is a challenge for us. And we have been naming and shaming companies which use the RSPO to cover up their practices,” said Ardiansyah.

The RSPO website has a list of companies whose memberships have been terminated but no such ‘name and shame’ list that draws attention to the alleged malpractices of major companies like Wilmar and Cargill exists. An older version of the RSPO website however, did report a complaint made against Wilmar International by Friends of the Earth in January 2008.

Complaints made against companies are dealt with by the Grievances Board, which consists of stakeholders instead of external assessors. In response to the allegations against Wilmar, the executive board stated that ‘There are three items in the response where further assurance is to be secured…none of these three items, individually or collectively, were considered as invalidating the acceptability of the response.’ There was no specification of what those three items were and whether Wilmar delivered its assurance. At the time of this article’s publication, the executive board’s response had been removed from the new RSPO website, a move that further shows the board’s lack of transparency.

The Singapore biofuel giant remains a member of the Roundtable and received full certification in January 2009 as ‘a testament of Wilmar’s strong commitment towards sustainable palm oil production, based on sound management and active engagement with the different stakeholders in the palm oil supply chain’, according to a company press statement.

Villagers are contracted by major companies to harvest palm oil. Image: CELCOR

Villagers are contracted by major companies to harvest palm oil. Image: CELCOR

Gaskell describes the Roundtable as a ‘journey of improvement’ that WWF guides them along. It is also a journey for the organisation itself, which is constantly seeking ways to improve the principles and criteria.

“RSPO has worked hard to get a set of standards that are far and beyond the current level of practices. They are the best practice management right now. And those standards are not set. WWF will continue working with companies to strengthen them.”

But both international and local campaigners believe that WWF is missing the point, which is that without a legal framework within the country that can govern a company’s actions, the RSPO is useless. Furthermore, local governments often have no regard for the environmental impacts of plantations and this makes it difficult for the company to carry out assessments without heavy financial losses and thereby making them more likely to skip the process.

Government indifference

In Indonesia, the Department of Agriculture regulates and distributes permits to companies. These location permits provide for the transfer of rights of the land to companies for commercial uses but are only valid for three years. In that time, companies must carry out initial surveys, socialisation programs and environmental impact assessments, secure investments, apply for and be granted requisite permits for clearance and construction and install the necessary infrastructure. Delays occur for a number of reasons and permits are often forfeited if the company cannot complete the process on time.

“It is very likely that the companies will not perform assessments or community consultations properly because they are afraid they will lose the land to someone else,” said Kuswardono.

“The government in Indonesia or Papua New Guinea doesn’t care how much forest will be destroyed when they give out these permits.”

The same investigation by Sawit Watch, Wild Asia and Forest Peoples Programme found that as a reaction to complaints of other businesses, governments often rush to reallocate these permits to other companies. Wilmar International was reported to have had over a total area of 120,100 ha in 2006 with active permits. By 2009, the Minister for Agriculture had cancelled permits to almost all these areas and had then restored to Wilmar only 52,204 ha. The main receiver of the permits was a company called Djarum, which is not RSPO certified and was alleged to have cleared land without conducting environmental impact assessments or securing agreements from host communities.

“The big task which WWF and RSPO should focus on is creating a legal bind for the HVC assessments so that companies can be held accountable for their actions,” said Tanago.

“Nothing is being done right now about the pollution and land clearance because the government is on the company’s side.”

WWF concedes that it is a difficult situation but maintains that it is taking a constructive approach.

“We have been involved with the Indonesian government since the early days of the RSPO and taking all the necessary steps in the process,” said Ardiansyah, former forest restoration coordinator for WWF Indonesia. “It is a difficult process because the government does not yet understand.”

“But I would say that 50 per cent of the P&C have already been incorporated into government agenda. The critical points related to social and indigenous issues are not quite there yet.”

Carbon emissions

Palm oil production also accounts for a large majority of Indonesia’s carbon emissions. When each hectare of peatland is drained for oil palm production, an estimated 3,750-5,400 tons of carbon dioxide is released over 25 years. Due to this, Indonesia is the highest emitter of greenhouse gases after China and the U.S.

The Roundtable held its annual conference in Kuala Lumpur in early November 2009 and according to its press releases, the executive board managed to ‘reach a compromise in which some emissions reduction requirements will be directly incorporated in the Roundtable’s certification standards.’ Again, the standards to be followed will be voluntary.

“This is a move in the right direction,” said Adam Harrison, WWF’s representative on the RSPO Executive Board in a press statement released after the meeting. “We encourage companies to embrace emissions reduction standards once they become available and do their part to avoid the catastrophic effects of climate change.”

The fact that the RSPO does not factor the enormous levels of CO2 emitted from plantations has been one of the primary concerns of NGOs. WWF appears to consider the outcome of the latest annual meeting a constructive step forward but it is unlikely that the others will agree.

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  • http://redapes.org redapes

    Thank you for this highly informative article on the palm oil industry and the RSPO!

    The palm oil and timber companies are quickly destroying the land and annihilating the biodiversity of Indonesia, Malaysia and Papua…

    One powerless, voiceless victim of the onslaught is the gentle orangutan, which shares 97% of its DNA with humans. These majestic creatures are critically endangered in the wild because of rapid deforestation and the expansion of palm oil plantations.

    Orangutan Outreach
    http://redapes.org
    Reach out and save the orangutans!

  • http://redapes.org redapes

    Thank you for this highly informative article on the palm oil industry and the RSPO!

    The palm oil and timber companies are quickly destroying the land and annihilating the biodiversity of Indonesia, Malaysia and Papua…

    One powerless, voiceless victim of the onslaught is the gentle orangutan, which shares 97% of its DNA with humans. These majestic creatures are critically endangered in the wild because of rapid deforestation and the expansion of palm oil plantations.

    Orangutan Outreach
    http://redapes.org
    Reach out and save the orangutans!

  • Tropicaleli

    I feel that this article did more to encourage the rampant spread of palm oil into forested areas than do stop it.

    The RSPO is at least making an effort to change the practices of palm oil companies in the right direction, including halting all clearing of High Conservation Value Forests. Supporters of the RSPO also support strong governance and strong laws. But, let’s face it–changing laws takes time, and often even if strong laws exist, they are not enforced. You can not blame it for being voluntary because the only thing that is not voluntary is the law and currently, unfortunately, the law is behind forest clearance by palm oil producers.

    In the meantime, a faster way to instigate change is to push the market to demand change–and RSPO is one tool through which we can do this. I agree that the RSPO needs to be more transparent in how it handles its grievances. But this problem alone should not negate the entire organization.

    I would ask the author, what is the alternative to supporting RSPO? Telling companies to buy palm oil from that is not certified? Telling companies not to buy palm oil at all? Unfortunately if you vote for the second option, then you should realize that only a small percentage of palm oil goes to the EU or other western countries. Most stays in Asia, so if you wanted to change things you would need to get palm oil users all over Asia to refuse to buy. Good luck.

    Let’s all join together in making the RSPO as strong and transparent as it possibly can be because it’s currently the best option we’ve got!

  • Tropicaleli

    I feel that this article did more to encourage the rampant spread of palm oil into forested areas than do stop it.

    The RSPO is at least making an effort to change the practices of palm oil companies in the right direction, including halting all clearing of High Conservation Value Forests. Supporters of the RSPO also support strong governance and strong laws. But, let’s face it–changing laws takes time, and often even if strong laws exist, they are not enforced. You can not blame it for being voluntary because the only thing that is not voluntary is the law and currently, unfortunately, the law is behind forest clearance by palm oil producers.

    In the meantime, a faster way to instigate change is to push the market to demand change–and RSPO is one tool through which we can do this. I agree that the RSPO needs to be more transparent in how it handles its grievances. But this problem alone should not negate the entire organization.

    I would ask the author, what is the alternative to supporting RSPO? Telling companies to buy palm oil from that is not certified? Telling companies not to buy palm oil at all? Unfortunately if you vote for the second option, then you should realize that only a small percentage of palm oil goes to the EU or other western countries. Most stays in Asia, so if you wanted to change things you would need to get palm oil users all over Asia to refuse to buy. Good luck.

    Let’s all join together in making the RSPO as strong and transparent as it possibly can be because it’s currently the best option we’ve got!

  • http://www.reportage-enviro.com Rebecca

    Tropicaleli,

    I agree that it’s the best we’ve got at the moment and it has the potential to do a lot of good, but currently it is being misused and it seems that the RSPO does more to hush up what companies do wrong rather than expose them and push them to change.

    To answer your question, obviously the alternative is not to all rally behind uncertified palm oil, or to demand that production cease altogether. I think the point environmentalists are trying to get across is that what is deemed by the RSPO as ‘certified’ palm oil is a product of compromise and negotiation and is in the end so watered down that it is probably not much better than the uncertified kind. Meanwhile, companies are able to use the RSPO certification as good PR.

  • http://www.reportage-enviro.com Rebecca

    Tropicaleli,

    I agree that it’s the best we’ve got at the moment and it has the potential to do a lot of good, but currently it is being misused and it seems that the RSPO does more to hush up what companies do wrong rather than expose them and push them to change.

    To answer your question, obviously the alternative is not to all rally behind uncertified palm oil, or to demand that production cease altogether. I think the point environmentalists are trying to get across is that what is deemed by the RSPO as ‘certified’ palm oil is a product of compromise and negotiation and is in the end so watered down that it is probably not much better than the uncertified kind. Meanwhile, companies are able to use the RSPO certification as good PR.

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