The Future of…
Palm oil is always at the heart of conversations on reducing deforestation, but today, it’s even more topical due to rising costs because of growing global demands. In a recent article in Eco-business, the new CEO of the Roundtable on Sustainable Palm Oil (RSPO), Joseph D’Cruz laid out why the community needs to do a better job at articulating what sustainable palm oil looks like:
“A sustainable palm oil sector is not just environmentally sustainable. It also needs to meet economic and social sustainability goals. This is a sector that is not just large plantations run by corporations, it is millions of smallholders; building a sector that provides sustainability for these smallholders is a huge opportunity and an important challenge.” In this feature, TFA Perspectives asks the experts for their views on ‘what’s next’ for the future of palm oil production.
Global Envoy for Nature-based Solutions and Country Director for Indonesia and Malaysia, IDH The Sustainable Trade Initiative
It is crucial to find and develop a scalable sourcing area (jurisdiction) that can meet the demand of sustainable palm oil. This requires collaboration, serious and continuous efforts between key stakeholders of palm oil, from big brands, supply chain companies, traders, government, producers, smallholders and CSOs. The efforts need to focus on addressing governance improvement, land legality of smallholders, agreed forest protection a management objectives, living income of farmers and the total economic value of palm oil from that sourcing area. This is not easy, since it will require different companies to do pre-competitive collaboration and invest in the sourcing area, very upfront. IDH and other partners’ work such as SourceUp and others can be seen as a good prototype to have such a scale. It is also important to increase engagement and get good buy-in from Asian markets including in India, China and Southeast Asia for sustainable palm oil. Demand from these markets is huge and the positive involvement of the market players in these regions are key to maintain and improve sustainable palm oil in the long-run. Finding investment for innovative financing models to support producers and farmers for replanting and implementing sustainability targets is fundamental to ensure that productivity of palm oil can be maintained or improved without expanding to forest or peatlands. Works in Indonesia through the CPO Fund (BPDP-KS) or at the global level through different investment fund partners such as AndGreen.Fund, Agri3 Fund, FarmFit Fund and TLFF can be also used to generate investment models and options to accelerate such replanting.
Global Palm Oil Lead, WWF Singapore
It is high time that we think of going beyond controlling the damage and making palm oil production regenerative and nature positive. It is definitely challenging but not impossible, given that more than 700 companies have achieved 100% RSPO certification as per the recent report by WWF and ZSL. With rates of tropical deforestation, biodiversity loss and GHG emissions continuing to rise, companies across the supply chain need to act fast to set, strengthen and deliver on their commitments towards a sustainable palm oil industry.
We call on companies to improve awareness of the 'Shared Responsibility' requirements and targets, ensure accurate reporting of progress, and work collectively to increase the production and sourcing of 100% RSPO-certified palm oil. Systemic market transformation initiatives and transparent reporting via tools like the 'Palm Oil Buyers Scorecard' and SPOTT can catalyse the transition to mainstream sustainable palm oil production, trade and consumption around the world.
General Manager of Programs and Projects, Smallholder Hub Musim Mas
Smallholders account for 40% of the global palm oil production, yet they lack the resources and expertise to improve yield and produce more sustainably. Improving smallholder sustainability while maintaining their livelihoods and yields will be the way forward. We train smallholders directly at our mills and third-party suppliers through our Independent Smallholders Program, the largest in Indonesia.
We want to scale up our efforts by working together within the existing government initiatives. We provide training and capacity-building for village extension officers and create smallholder hubs. These hubs bring together the government and private sector players, including buyers, to train smallholders and build supply chains to sell sustainably-produced palm. We believe such partnerships are the way forward to make sustainable palm oil the norm.
Deputy Director Responsible Sourcing at Proforest
Over the years, we have observed a significant decline of deforestation inside concessions as companies have set commitments to no deforestation and started to implement them (including, for example, concession mapping, High Carbon Value/High Carbon Stock Approach (HCV/HCSA) assessment, geospatial monitoring, grievance management). At the same time, there is a resurgence of deforestation in small producer areas that has to be addressed while securing smallholder livelihood and economic development. There are now established systems able to provide regular deforestation alerts. Where these alerts occur inside a concession with known supply links, it is possible for supply chain companies to use existing commercial relationships to take action to tackle deforestation by engaging with the concession-holder or group. However, where the alerts occur outside concessions it is much more difficult for companies to respond individually as traceability in these areas is often lacking and root causes can be multiple. Many different actors can be involved, ranging from medium-sized plantations, communities or smallholders legally clearing land, to illegal encroachment and land speculation. Supply chain companies do not always have commercial relationships with these actors, nor the right to act on their own as law enforcers or land use planners.
Therefore, it is key to engage with all actors, including intermediaries, to address the challenge of traceability in third-party FFB supply chains. We recognise that achieving traceability to every single production plot is a huge challenge, and therefore it is important for supply chain actors to implement a risk-based approach, such as the Risk Calibrated Approach (RCA), to achieve traceability to production area to address the problem of deforestation. Companies also need to work with other stakeholders, collectively and collaboratively, to plan and implement longer-term forest and livelihood positive actions that proactively, holistically and inclusively address deforestation outside concessions. Landscape initiatives are increasingly providing a platform to operationalise this collaborative action. The Production and Protection Beyond Concession (PPBC) working group of the Palm Oil Collaboration Group aims to do this with a framework for action for companies to deliver a deforestation-free third-party supply base through individual and collective action and monitoring, with current pilots in high risk areas. Companies can then help to scale up forest and livelihood action through proactive interventions and targeted monitoring, prioritising where action is needed and then agreeing and implementing action and monitoring protocols for priority areas.
Companies also need to work with other stakeholders, collectively and collaboratively, to plan and implement longer-term forest and livelihood positive actions that proactively, holistically and inclusively address deforestation outside concessions. Landscape initiatives are increasingly providing a platform to operationalise this collaborative action.
Regional Director for South-East Asia, Tropical Forest Alliance
The palm oil sector has gone through a transition to be more sustainable in recent years, with stronger commitments toward implementing a robust No Deforestation, No Peat, and No Exploitation policy (NDPE). However, these commitments are mainly driven by the big growers while the small and medium growers are struggling in their sustainability transition. Hence, we need to move beyond the buyer-producer relationship and seek to empower and incentivize sustainability at jurisdictional scale to really create systemic shift toward sustainability. Strong buyer-producer relations within a jurisdiction/landscape could be a force of good to bring together multi-stakeholders and create the enabling ecosystems to pursue shared goals and collective actions toward deforestation-free commodity market, trade and investment.
