There are a number of voluntary and mandatory standards that apply to palm oil. Certification schemes vary in their aims, scope, and methodologies, and each scheme has strengths and weaknesses. However, by addressing these strengths and weaknesses, schemes can evolve to push for improved practices and make sustainable production of agricultural commodities the norm.
A number of standards exist to support responsible palm oil production:
- Certification standards, such as the Roundtable on Sustainable Palm Oil (RSPO), establish common commitments and guidance for growers and lend credibility to their claims on the sustainability of their operations; therefore providing assurances to buyers and investors.
- In addition to certification schemes, voluntary initiatives, such as the Palm Oil Innovation Group (POIG) and the Sustainable Palm Oil Manifesto (SPOM), have been established and endorsed by a number of growers, committing them to criteria for sustainable production.
- Mandatory national standards, such as the Indonesian Sustainable Palm Oil system (ISPO), which is applicable to all oil palm growers in Indonesia, have also been developed to address industry sustainability at a national level.
The following standards are covered in this section:
- Roundtable on Sustainable Palm Oil (RSPO)
- International Sustainability and Carbon Certification (ISCC)
- Rainforest Alliance (RA)/Sustainable Agriculture Network (SAN)
- Roundtable on Sustainable Biomaterials (RSB)
- Palm Oil Innovation Group (POIG)
- Sustainable Palm Oil Manifesto (SPOM)
- Indonesian Sustainable Palm Oil (ISPO)
- Malaysian Sustainable Palm Oil (MSPO)
- The HCS (High Carbon Stock) Approach
The Roundtable on Sustainable Palm Oil (RSPO) is a multi-stakeholder, non-profit group founded in 2004 with the objective of “promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders.”
The RSPO unites seven sectors of the palm oil industry in regular dialogue, including investors, growers, retailers and NGOs. It uses a consensus voting system to develop standards and criteria for its members and it is now the dominant certification scheme for palm oil in foodstuffs and household products.
Principles and Criteria (P&C) for certification
The P&C form the basis of the RSPO certification scheme. First drawn up in 2007 and revised in 2013, the P&C comprise eight basic principles:
- 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
- Commitment to Continuous Improvement in Key Areas of Activity
In order to claim compliance with the P&C and achieve RSPO certification, growers must be assessed by a third-party RSPO-accredited certification body every five years, with an annual audit for continued compliance.
The current P&C can be found here on the RSPO website, together with a breakdown of the indicators and guidance on how to become certified.
Annual Communications of Progress (ACOPs)
- Annual Communications of Progress (ACOP) reports are compulsory annual reports submitted by all Ordinary and Affiliate members of the RSPO, used to assess their progress towards producing and procuring RSPO-certified sustainable palm oil.
- These reports help the RSPO to review members’ commitments and gain feedback on the process of implementing the P&C and are a vital tool for increasing the transparency of companies’ operations and commitments to sustainability.
- Time-bound plans (TBPs) are a crucial component of the ACOPs, in which members must state clear timelines for producing or sourcing 100% RSPO CSPO.
- These facilitate increased transparency and accountability of company commitments and gauge the ambition and level of commitment of a member to achieving RSPO certification.
- The RSPO issued voluntary best practice guidance for setting and reporting on TBPs along with the 2013 ACOP submission. This specified that members should:
- Certify their first estate within three years of joining the RSPO and that 100% of estates should be certified within 5 years;
- That the first of the company’s associated smallholders and out-growers should be certified within three years of the company’s first estate certification and that 100% should be certified within five years;
- That the first of the company’s independent FFB suppliers should be certified within six years of their first estate certification and 100% within nine years.
Sourcing and trading certified palm oil
Due to the complexity of the palm oil supply chain and the variable volumes produced and traded, multiple chain-of-custody and trading mechanisms are necessary to meet the needs of producers and buyers and to support the uptake of CSPO.
There are four supply chain models for RSPO Certified Sustainable Palm Oil (CSPO):
- Identity Preserved: CSPO is kept segregated from all other sources (certified and non-certified) and a batch of certified palm oil can be traced from plantation to factory to retailer.
- Segregated: certified palm oil is kept segregated from non-certified palm oil, but is blended with other batches of CSPO and cannot be traced back to a specific plantation.
- Mass Balance: Certified palm oil is mixed with uncertified palm oil, but quantities are monitored administratively so that claimed volumes are matched.
- Book and Claim: This bypasses the need for physical traceability of certified palm oil through the supply chain. Producers can earn RSPO Credits (formely traded as GreenPalm Certificates) for producing certified sustainable palm oil. RSPO Credits are then sold via an online platform to users (retailers, manufacturers), who can then claim to support sustainable production of equivalent volumes purchased.
GreenPalm certificates representing 2016 production will cease trading on 31 March 2017. Any certificates for 2017 claims should be traded through PalmTrace from 1 January 2017.
- The RSPO Complaints System addresses grievances against both RSPO members and the RSPO system itself.
- Both RSPO members and non-members from interested parties (e.g. workers, local communities) can submit complaints, which are first reviewed by the Secretariat and then passed on to the Complaints Panel for decisions and further action to facilitate a resolution.
- They are published and accessible on the RSPO website after deliberation has taken place.
See here for more information on the RSPO Complaints System and how it works.
- RSPO NEXT has been developed to recognise the efforts of RSPO members who are exceeding the requirements of the RSPO P&Cs (link to P&Cs section).
- It is a voluntary commitment put forth in addition to the existing P&Cs and incorporates more stringent assessment standards, with guidelines regarding deforestation, fire, peat, human rights and landscape approaches, among other issues. These are measured through a combination of reviewing company policies and on-the-ground verification.
- This additional assessment gives member companies the opportunity to go beyond the requirements of the RSPO and demonstrate a stronger commitment to environmental and social responsibility.
See here for more information on RPSO Next.
The International Sustainability and Carbon Certification (ISCC) scheme is a system for certifying the biomass and bioenergy industries, oriented towards the reduction of greenhouse gas emissions, sustainable land use, protection of the natural biosphere and social sustainability.
- ISCC applies across the supply chain and so can verify traceability from a plantation right through to the consumer.
- ISCC can be applied to meet legal requirements in the bioenergy markets, as well as to demonstrate the sustainability and traceability of feedstock in the food, feed and chemical industries (ISCC PLUS).
- The scheme received the world’s first official state recognition through the German government’s biomass sustainability ordinance (BioNachV) in 2010, and has since been recognised by the European Commission as one of the first certification standards to demonstrate compliance with the EU Renewable Energy Directive’s (RED) requirements.
- The system currently certifies over 2,500 operations worldwide, of which at least 300 are palm related, including plantations, mills, refineries, biogas plants, warehouses, trading and waste management systems, among others. All certificates are available online via a searchable database, along with lists of expired, withdrawn and fake certificates.
See the ISCC website for more information about the scheme.
The Rainforest Alliance (RA), established in 1987, aims to change land-use and business practices to reduce their impacts on both biodiversity and local people. The Sustainable Agriculture Network (SAN) is a large coalition of non-profit conservation organisations formed in 1997 working to mitigate the environmental and social risks associated with agriculture.
- Together, these two organisations operate a global system for certifying the sustainability of farms in a variety of sectors. Products that meet the sustainability requirements set out by SAN receive the Rainforest Alliance certification seal.
- The SAN Sustainable Agriculture Standards – the core criteria within SAN’s sustainability standards – cover a number of areas, such as wildlife protection, water conservation, ecosystem conservation, and community relations, among others.
The Roundtable on Sustainable Biomaterials (RSB) is a global certification scheme to encourage the sustainable production of biofuels and other biomaterials.
- It was established in 2007 as the Roundtable of Sustainable Biofuels, and in 2013 increased its scope to include all biomaterials.
- The RSB has two sets of principles and criteria for certification – one which applies to any type of feedstock on a global scale, and one which is specifically consolidated to comply with the EU Renewable Energy Directive (EU-RED).
- These standards encompass social, environmental and economic aspects of sustainability, such as greenhouse gas emissions, rural development and financial viability.
See the RSB website for more information.
POIG is an initiative between environmental and civil society organisations and industry companies that aims to build upon the RSPO Principles and Criteria (P&C) and existing company commitments – especially on issues of deforestation, carbon stocks, biodiversity, greenhouse gas (GHG) emissions, pesticide use and social relations.
Launched at the Tropical Forest Alliance meeting on 28th June 2013 in Jakarta, the POIG Charter holds that certain P&C should set clearer performance standards for certified growers with the following recommendations:
- Introduce a High Carbon Stock (HCS) approach to land development
- Maintain and restore peatlands and prohibit their clearance
- Publicly report GHG emissions from all sources
- Minimize the use of chemical fertilizers and toxic pesticides
- Prohibit cultivation of Genetically Modified Organisms (GMOs)
- Manage water sources and their use responsibly and transparently
- Protect and conserve wildlife through High Conservation Value (HCV) assessment
POIG members argue that this builds a business case for responsible palm oil by bridging the gap between producers and consumer companies such as Ferrero, Nestlé, Procter & Gamble and Unilever, which have made “No Deforestation” commitments.
In 2014 POIG released its first ‘Charter Indicators’ list, which stipulates the specific conditions to be met regarding issues such as peat development, HCV and HCS management and the FPIC process, among others. These indicators have since been trialled and revised.
The Indonesian Sustainable Palm Oil (ISPO) Foundation is a national non-profit organization aiming to improve the sustainability and competitiveness of the Indonesian palm oil industry and contribute to the Indonesian government’s objectives to reduce greenhouse gas emissions and draw attention to environmental issues.
Also known as Yayasan Kelapa Sawit Berkelanjutan Indonesia (YASBI), ISPO was established on 6th July 2009 to implement a certification policy system designed by the Indonesian Ministry of Agriculture. Compared to a voluntary initiative like the Roundtable on Sustainable Palm Oil (RSPO), the ISPO system is mandatory and applies to all oil palm growers operating in Indonesia, from large plantation companies to smallholders, although requirements for each vary..
ISPO audits have been conducted by independent certification bodies since May 2012, with a deadline involving all Indonesian growers by the end of 2014.
ISPO is part of the wider Sustainable Palm Oil (SPO) Initiative, developed with the support of the United Nations Development Programme (UNDP). The establishment of the SPO Initiative is in line with UNDP’s mission to help countries such as Indonesia find ways to ensure that economic growth becomes sustainable and empowers the poor and the marginalized population.
The system supports the implementation of many of Indonesia’s existing laws and regulations, and the assessment of growers relies heavily on AMDAL – the Indonesian Environmental Feasibility Assessment.
- The SPO Initiative aims to increase smallholder capacity and improve livelihoods, better protect the environment and reduce GHG emissions, through the following strategic components:
- Strengthen the capacity of smallholders focusing on good agriculture practices and environment protection
- Strengthen ISPO standards to protect forests, enhance biodiversity conservation, and mitigate and monitor greenhouse gas (GHG) emissions
- Facilitate social responsibility, empowering related communities and mediation systems
- Reinforce the ISPO framework and clarify ISPO standards for wider acceptance
- Establish national and provincial platforms to ensure transparency in the sector and to promote sustainable palm oil
See the ISPO website for more information.
The Malaysian Sustainable Palm Oil (MSPO) Certification Scheme is the national certification scheme in Malaysia through which oil palm plantations, independent and organised smallholdings, and palm oil processing facilities are certified against the MSPO Standards (MS 2530:2013 series).
The MSPO Certification Scheme is voluntary and industry-driven. It came into effect in January 2015 and is operated and owned by the Malaysian Palm Oil Certification Council (MPOCC), an independent organisation incorporated as a company in December 2014. MPOCC is tasked with the development and implementation of the MSPO Certification Scheme across Malaysia.
The MSPO Standards contain seven principles that cover:
- Management commitment and responsibility
- Compliance to legal requirements
- Social responsibility, health, safety and employment conditions
- Environment, natural resources, biodiversity and ecosystem services
- Best practices
- Development of new plantings
The HCS (High Carbon Stock) Approach
The HCS Approach is a methodology designed to enable companies to put their “no deforestation” commitments into practice in their operations and supply chains.
The HCS Approach calls for the rigorous implementation of High Conservation Value (HCV) assessment, and mapping of peatland and riparian areas. It integrates Free, Prior and Informed Consent (FPIC) processes for the recognition of rights and interests of local communities. The HCS Approach identifies types of HCS forest class that require protection and prioritizes the allocation of two degraded land classes (low-carbon scrub areas and open land) for any proposed development.
Through the HCS Approach, companies will protect peatlands, HCV areas and HCS forests within their concessions and together with other stakeholders, and work with rights holders to identify and protect such areas in adjacent landscapes. It has been agreed that companies should not excise peatlands, HCV areas and HCS forests from their concessions, unless it is to achieve their protection.
See the HCS Approach resource site for more information.