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Environmental benefits or social — but rarely both — under RSPO, study finds

An oil palm plantation in Indonesia. Image by Rhett A. Butler/ Mongabay.

  • Oil palm plantations certified under the Roundtable on Sustainable Palm Oil (RSPO) can promote environmental benefits, but have a limited impact on rural development, a new study has found.
  • The study analyzes trade-offs between development and environmental impacts of RSPO on local communities in Indonesia.
  • It found that the certification scheme can be effective in terms of promoting both conservation and development outcomes, but under certain conditions.
  • A key factor found to influence the outcomes is terrain flatness: steeper slopes are more expensive to cultivate, making it less likely that palm oil companies will implement more environmentally friendly practices.

JAKARTA — The world’s leading palm oil sustainability certification scheme may have helped reduce deforestation and pollution in areas where it’s applied, but has had a limited impact on rural development, a study shows.

The paper evaluates the trade-offs between the development and environmental impacts of Roundtable on Sustainable Palm Oil (RSPO) certification on local communities in Sumatra and Kalimantan, the Indonesian portion of the island of Borneo. The two regions account for more than 90% of oil palm expansion since 1990 in Indonesia, the world’s biggest producer of palm oil.

The study authors said little is known about the trade-offs and complementarities between the environmental and socioeconomic goals of the RSPO at the village level. To delve into the issue, they used a data set covering five time points from 2003 to 2014 and encompassing 7,983 and 3,545 villages in Sumatra and Kalimantan respectively.

For environmental outcomes, the study looked at reductions in water, air and land pollution, deforestation, loss of primary forests, and incidence of fires, which are often associated with oil palm expansion and production.

In terms of developmental outcomes, the study focused on the provision of public goods in each village, such as the number of private educational facilities, the number of households with access to non-state sources of electricity, and the presence of health centers.

According to the study, RSPO brought small environmental benefits to the villages, reducing deforestation by an average of 0.05% and 1% in Sumatra and Kalimantan, respectively. It fared better on pollution, decreasing the incidence of village land pollution in Kalimantan by 21%.

“These results are consistent with previous studies that find small benefits or statistically insignificant impacts on environmental outcomes,” the researchers said in the study.

Study co-authors Janice Ser Huay Lee, a land systems scientist at Nanyang Technological University (NTU), Singapore, and Daniela Miteva, an associate professor of sustainable development and economy at Ohio State University, said these environmental benefits could just as well be attributed to environmental protection regulations in Indonesia and the country’s mandatory certification scheme, the ISPO.

Increased urbanization could also be a factor: “However, in Sumatra, we also detected a decrease in population density. Therefore, we cannot rule out the possibility that the positive environmental impacts are due to decreased population pressure,” Lee and Miteva told Mongabay.

They added that while the paper “is an important first effort, more research is needed on migration and the channels through which voluntary market-based interventions like RSPO have an impact.”

In terms of village infrastructure, the study found that RSPO certification increased the average number of private educational facilities in villages in Kalimantan, but had no statistically significant effect on other village development indicators in either region.

“Our results indicate that, although the RSPO has had limited impacts on the number of village educational and health facilities in the first few years since its implementation, it had an overall positive impact on supporting environmental quality,” the study said.

In cases where RSPO certification increased developmental outcomes, it might be because certified producers provided additional village public goods as compensation to local communities, to secure rights to produce oil palm on village land so that they could meet certification requirement, according to the study.

“We expect the additional benefits due to RSPO to accrue in villages that have unresolved land tenure issues with the oil palm concession holder at the time of certification,” Lee and Miteva said.

The lack of significant improvements in most village development indicators found in the study may be due to the nature of criteria intended to ensure that companies contribute to village development.

The 2007 RSPO criteria that certified companies must “contribute to local sustainable development wherever appropriate” is vaguely worded, and thus may lack stringency due to potentially broad interpretation by auditors, the study suggests.

Moreover, guidance on how to implement this criteria is also vague.

Lee and Miteva said the lack of improvements in village development indicators might also be because rural development benefits take some time to materialize, and the study time period was too short to capture any significant changes in the villages. Furthermore, the indicators used for measurable outcomes for rural development from the RSPO are limited, with the study focusing on infrastructure indicators (public goods) rather than on household-level indicators like poverty, health, employment, and malnutrition, Lee and Miteva said.

While there seem to be trade-offs between the development and environmental impacts of RSPO, the researchers also found cases in Kalimantan where RSPO certification contributed to positive development and environmental benefits at the same time: a complementarity.

Oil palm fruit bunches in a truck for transport to market. Image by John C. Cannon/Mongabay.
Oil palm fruit bunches in a truck for transport to market. Image by John C. Cannon/Mongabay.

Slope matters

Complementarities are more likely where villages are located on flat land, the study found.

Villages with slopes of less than 2° in Kalimantan were found to have a significant increase in the number of private educational facilities, as well as decreases in land pollution and deforestation.

Lee and Miteva said this might be because flat land is cheaper to cultivate, and hence more profitable, allowing palm oil companies to implement more environmentally friendly practices there.

At the same time, RSPO increases the bargaining power of local communities, since certification can’t be granted unless tenure disputes with local communities are resolved.

“Thus, the combination of increased communities’ bargaining power and higher profitability on gentle slopes implies that a concession holder may be willing to provide more benefits to the local communities in these areas in order to gain access to the land,” Lee and Miteva said. “The above is what, we believe, is driving the complementarity at gentle slopes in Kalimantan.”

In villages located in areas with slopes of more than 3°, the study found more trade-offs, with RSPO certification increasing the probability a village would have a health center while experiencing deforestation at the same time.

Lee and Miteva said this is because companies might not be able to afford more environmentally friendly practices on steeper terrain, which isn’t as cheap to cultivate as flat land.

“However, they may still have to provide compensation to local communities,” they said.

Another factor that could contribute to the trade-offs is population increase.

“We find that in Kalimantan there was a slight (but not statistically significant) increase in population density at higher slopes,” Lee and Miteva said. “This is where we observe the trade-offs between health facilities and deforestation.”

The study said that, “Especially on gentle slopes where oil palm production is most profitable, certification may create incentives for improving village infrastructure and mitigating negative environmental impacts associated with oil palm production and expansion.”

It found the environmental benefits of RSPO certification to be significant on gentle slopes, with 10% reduction of deforestation on slopes of less than 2° in both Kalimantan and Sumatra. But on slopes of more than 3°, RSPO certification had the opposite effect.

“More land area under RSPO certification also resulted in more remaining primary forest and reduced the incidence of water pollution in Sumatra villages on slopes of less than 3°, while in Kalimantan, certification reduced the incidence of land pollution on slopes of less than 2°,” the study said.

All these findings show that RSPO certification can be effective in terms of promoting both conservation and development under certain conditions, according to Lee and Miteva.

“Future research is needed to tease out the different mechanisms/channels through which RSPO affects change on the ground, however. Our work is an important first step in that direction,” they said. “Future work also needs to assess the longer-term impacts of certification. In terms of policy implications, we would recommend RSPO help collect more and better publicly available data from certified concessions at least. These data can facilitate future impact evaluations.”


Lee, J. S., Miteva, D. A., Carlson, K. M., Heilmayr, R., & Saif, O. (2020). Does oil palm certification create trade-offs between environment and development in Indonesia? Environmental Research Letters15(12), 124064. doi:10.1088/1748-9326/abc279


CORRECTION (07/12/2021): The article has been updated to cite another author of the study, Daniela Miteva, in the quotes.


Banner image: An oil palm plantation in Indonesia. Image by Rhett A. Butler/ Mongabay.


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