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Lack of price premium for certified palm oil endangers sustainability initiative

The palm oil industry’s sustainability initiative is making considerable progress toward improving its environmental performance, but needs to do more to accelerate the adoption of responsible practices, argue researchers writing in’s open access journal Tropical Conservation Science.

Gary Paoli and colleagues review recent gains under the Roundtable on Sustainable Palm Oil (RSPO), a body established by a range of stakeholders to establish social and environmental criteria for palm oil certification, including growing membership and production of certified sustainable palm oil (CSPO) (388 voting members and 3.25 million tons of CSPO from 641,000 ha of plantations), wider uptake of CSPO by markets (60% of available CSPO purchased), and greater participation by small-holder producers (25,000 household farms). But they note fundamental changes are still needed to ensure the RSPO can effectively mitigate environmental harm.

New oil palm plantation on the border of Gunung Leuser National Park in North Sumatra.

One of the major challenges facing wider adoption of RSPO standards is lack of financial incentives for producers. Currently CSPO fetches only a one percent premium over conventional palm oil, a figure which is often insufficient to cover the cost of certification. Therefore encouraging buyers and traders to share the cost burden of greener palm oil production is an important step to improving the viability of the RSPO, according to the authors.

Paoli and colleagues also highlight the need for conservation groups to constructively support the efforts of palm oil producers. They suggest stronger partnerships between NGOs and palm oil producers could improve on-the-ground practices and help ensure that messaging at the executive level translates to actual conservation actions. Activist groups will still play a “vital role” in ensuring sustainability initiatives stay on track.

Finally Paoli and colleagues call for more support from producer country governments in the form of regulations that permit conservation activities within concession areas.

Without concrete action, the authors warn the RSPO could fail to achieve its mission of improving the sustainability of palm oil. For example, the RSPO is already being challenged by a weaker Indonesian sustainability standard, the ISPO, which is expected to launch next year and could further reduce margins and the credibility of certification schemes in the eyes of consumers.

The authors conclude that if executed properly, RSPO standards could slow rates of biodiversity loss outside protected areas.

“We are hopeful that if the broader RSPO membership makes progress on the issues discussed above, and leading RSPO members stay the course, then industry improvements will accelerate and the RSPO may well deliver long-term positive benefits to biodiversity in Southeast Asia.”

Paoli, G. D., Yaap, B., Wells, P. L. and Sileuw, A. 2010. CSR, Oil Palm and the RSPO: Translating boardroom philosophy into conservation action on the ground. Tropical Conservation Science December 2010 | Vol. 3 | Issue 4 | pages 438-446.

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