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Editorial: Sustainability is the basic issue

It would be misguided for Indonesian companies to boycott or quit the Kuala Lumpur-based Roundtable on Sustainable Palm Oil (RSPO), as demanded by several executives of the palm oil producers association (Gapkindo) and the government-sponsored Palm Oil Board

The Jakarta Post
Wed, November 10, 2010

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Editorial: Sustainability is the basic issue

I

t would be misguided for Indonesian companies to boycott or quit the Kuala Lumpur-based Roundtable on Sustainable Palm Oil (RSPO), as demanded by several executives of the palm oil producers association (Gapkindo) and the government-sponsored Palm Oil Board.

Such a move against RSPO, which opened its eighth annual conference and exhibition here Tuesday, would not resolve the international attacks on several major Indonesian palm oil companies for allegedly damaging natural forests through plantation expansion. The core issue is that big buyers in Europe such as Unilever and Nestle have been pressured by environmental campaigners such as Greenpeace and consumer organizations to stop buying palm oil from Indonesian producers that have not gained green certification under the RSPO principles and criteria.

Allegations that European palm oil buyers have used this pressure from NGOs as a bargaining weapon to get lower prices from Indonesian suppliers, given the country’s position as the world’s largest producer, seem groundless.

The suspicion that the green campaign is a subterfuge by the producers of vegetable oil such as soybean, sunflower, rapeseed and corn oil in rich countries in coping with the fierce competition from palm oil is misplaced.

First of all, the principles and criteria assessed for RSPO green certification are precisely the best practices of agricultural development we have ourselves been promoting: legal and regulatory compliance, the best production practices, environmental responsibility and commitments to employees and local community development.

 The concern that European and American vegetable oil producers have abused RSPO for their own business interests also seems misplaced because RSPO groups the largest palm oil producers from Indonesia and Malaysia, which together account for more than 85 percent of the world’s palm oil output, almost all major consumer products companies in developed countries, such respected NGOs as WWF, Oxfam and Sawit Watch, big financial institutions and palm oil-based industries.

The right mix of membership, currently totaling 386, would protect RSPO from abusive control by giant consumer products manufacturers or vegetable-oil suppliers in industrialized countries.

Moreover, the highest authority in RSPO is the annual general assembly of members whereby one member holds one vote. It is also this assembly which selects the 16 members of the RSPO Executive Board that consist of four representatives from palm oil producers (growers) – one from Indonesia, one from Malaysia, one from the rest of the world (Africa and Papua New Guinea) and the other one representing small holders – two each from processors, consumer products manufacturers (such as Unilever, Procter & Gamble, Nestle), financial institutions such as the World Bank, environmental NGOs and social NGOs.

 With such a membership and voting structure it would be difficult for any group to manipulate the RSPO.

 Instead of bashing RSPO or trying to set up a counter green certification scheme for palm oil, which will not likely be credible, it would be much more effective and productive for Indonesian companies and NGOs to be more active within the RSPO to make improvements to its green certification scheme.

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