Palm Oil Cultivation and Sustainability Issues

In recent times, there has been a constant rise in demand of palm oil from all parts of the world. This has led to a high rate of growth in oil palm production at a CAGR of more than 6% both by high yield and high acreage. But this has raised several sustainability issues globally. The major problems created include deforestation; loss of biodiversity; climate change; misuse of pesticides etc.

One example is that in Indonesia and Malaysia, almost one third forest was lost in only last one decade due to expansion of the oil palm. Forests are cleared and peat swamps are drained, also burnt which causes air pollution (haze) in large areas and ultimately contributes to global warming. Loss of natural forests results in loss of several ecosystem services; loss of livelihoods; and also imperils the wild species because their natural habitats are being destroyed. Some of the most affected species include Sumatran Rhino, Sumatran Tiger, Elephant and Orangutan.

Here, the notable point is the Oil Palm itself is not a problem. The problem is how it is cultivated and palm oil is produced. If it is done right – for example, degraded land is used to grow oil palm instead of bringing down forests; it can serve as a catalyst to growth of livelihoods and enhance biodiversity. Roundtable on Sustainable Palm Oil (RSPO) and Green Palm are such initiatives that promote the sustainable production of palm oil.

Roundtable on Sustainable Palm Oil (RSPO)

Roundtable on Sustainable Palm Oil (RSPO) is a multi-stakeholder platform established in 2004 to address the key issues and concerns towards promotion of the production of sustainable palm oil. It included major palm oil players such as AAK, KLK, Sainsbury’s, Unilever, WWF etc.

RSPO has developed a set of standards for production of Sustainable Palm Oil, which are called RSPO Principles and Criteria. It has also come up with a certification system to support the production and trade in so called Certified Sustainable Palm Oil (CSPO). Today, CSPO has become a commercial reality and around 6.7 MT of CSPO is being produced. The key RSPO Principles and Criteria include the following:

• There should be no conversion of primary forest or socially or ecological valuable areas for plantations
• Protection of endangered animals and plants
• Protection of ecosystem services such as water, soil and air (including a ban on the use of fire for clearing land)
• No child labour and the creation of educational opportunities for children living on the plantation
• Inclusion and support of smallholders
• Regular assessment of plantations by independent accredited certifiers

In summary, RSPO makes sure that the valuable tropical forests are not cleared and environmental and social safeguards are met in production of palm oil.

However, under normal conditions; the purchasers of the palm oil will not know exactly from where their oil has come from and how it was produced. To solve this issue a trading programme called Green Palm (Book and Claim) was started which gives the consumers flexibility to purchase sustainable palm oil certificates. The RSPO certified palm oil producers register a part of their output with the GreenPalm programme. They are awarded one GreenPalm certificate on sustainable production of one tonne of palm oil. These certificates can be put on sale on the GreenPalm web based trading platform. The manufacturers or retailers can then bid for and buy those certificates online, in order to be able to claim that they have supported the sustainable production of palm oil.