Business

Indonesia develops rival
sustainable palm oil scheme

The Indonesian government hit out at the Kuala Lumpur-based Roundtable on Sustainable Palm Oil (RSPO) on Tuesday, asserting that it was finalizing its own scheme for sustainable palm oil production.

“The Indonesian Sustainable Palm Oil [ISPO] scheme is designed to make palm oil production sustainable in compliance with Indonesian laws and regulations,” Agriculture Minister Suswono said in a written address at the opening of the eighth annual RSPO conference.

Palm oil company executives saw the statement as a reflection of the government’s disappointment with the increasing criticism by international environmental NGOs of several major palm oil producers in the country for alleged deforestation.

Several consumer goods multinationals such as Unilever and Néstle have been pressured by groups such as Greenpeace to suspend palm oil purchases from Indonesian producers alleged to have damaged the environment by expanding their plantations.

Large buyers in Europe and the US have also warned that they would stop buying palm oil from Indonesian companies that were not certified by the RSPO.

Several executives fron the Indonesian Palm Oil Producers Association (Gapki) and the government-sponsored Indonesian Palm Oil Board urged local companies to boycott or quit the RSPO, alleging that the organization had departed from its original objective and mission.

Gapki also attacked the RSPO certification process as imposing burdens that were unaffordable for small- and medium-scale companies, let alone smallholders.

Gapkindo executives said the manner in which RSPO enforced its principles of sustainability would hinder the development of the palm oil industry, which last year earned US$12.3 billion from exports and directly employed more than four million people.

Rosediana Suharto of the Indonesian Palm Oil Commission said fees for ISPO certification would be waived for small- and medium-size companies and smallholders.

However, both Suswono and Suharto failed to elaborate what measures the government would undertake to make the ISPO and its certification process internationally accepted as credible, in view of Indonesia’s reputation as one of the most corrupt countries in the world.

RSPO president Jan Kees Vis of Unilever, the Anglo-Dutch consumer products giant, said his organization as of last month had 386 members consisting of major palm oil producers from Indonesia and Malaysia, which together account for 85 percent of global production, major NGOs such as WWF, Oxfam, Sawit Watch, large banks and consumer product companies.

“Seventy-five palm oil mills in Indonesia and Malaysia with a total capacity of 3.2 million tons have been certified in conformity with the RSPO principles and criteria,“ Vis added.

He said 25 of the certified mills with a combined capacity of more than one million tons were located in Indonesia, the world’s largest palm oil producer, which this year is estimated to produce more than 20 million tons.

“The RSPO is now preparing a program to make it virtually free for smallholders to have their palm oil certified,” Vis added.

Norman Jiwan of Sawit Watch, an NGO specializing in monitoring the palm oil industry, argued that it would not be adequate if the ISPO upheld only Indonesian laws and regulations, because the scheme would still fall short on several other measures vital for sustainable palm oil management.

Jiwan said the principles of sustainable management promoted and assessed by the RSPO for its certification process were more complete, covering such elements as transparency, legal and regulatory compliance, best production practices, environmental responsibility and commitments to local community development, human rights and land rights, among others.

Derom Bangun, a member of the RSPO executive board, said the green consumer campaign had been mounting around the world.

He said that even though Europe bought only around 8 to 10 percent of Indonesian’s palm oil and “our biggest markets now are in Asia, notably China, India, Pakistan, we cannot simply ignore RSPO and the principles of sustainability it promotes”.

“Even consumer products from China and India may eventually find it extremely difficult to enter developed countries if their products contain uncertified palm oil,” Bangun pointed out. (lnd/Vin)

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