First company performance report published on compliance with stricter palm oil sustainability requirements
08 June 2014
In 2013, the Palm Oil Innovation Group (POIG). a multi-stakeholder palm oil sustainability initiative, was launched by “a group of progressive palm oil companies together with environmental and social NGOs”. POIG emerged out of dissatisfaction with the 2013 review of the Roundtable on Sustainable Palm Oil (RSPO) principles and criteria, which it was thought “could have been more innovative, especially on the issues of deforestation, carbon stocks, biodiversity and social relations”. POIG is “committed to reinforcing and improving the RSPO Principles and Criteria” by recognising the attainment of higher standards than those currently required under the RSPO scheme.
According to Greenpeace, the POIG Charter goes beyond RSPO requirements and “addresses deforestation, peat land development, greenhouse gas emissions, pesticides, water accountability, comprehensive free prior and informed consent of indigenous peoples and local communities, food security…, transparency and corruption, and traceability”.
Membership of POIG is only open to producers with a proven track record of producing palm oil to the highest standards of sustainability. Specifically, to become a “grower member” of the group, palm oil companies must “have achieved at least 50% RSPO certification… and [must] commit to 100% certification within two years of joining”.
The major ACP palm oil producer, New Britain Palm Oil Limited (NBPOL), was one of only two palm oil companies involved in the launch of the POIG initiative. According to NBPOL’s 2012/13 Sustainability Report, it engaged with the POIG initiative in response to evolving stakeholder concerns on sustainability requirements, with a view to meeting “the expectations of even the most prominent critics of palm oil production”.
According to NBPOL’s 2012/13 Sustainability Report, the company first attained full RSPO certification in 2008, for its operations in Papua New Guinea (PNG), the Solomon Islands and the UK, with its certification successfully extended to newly acquired operations in 2012, including sustainability certification for all of the company’s smallholder oil palm producers. NBPOL maintains that it is now “the leading supplier of traceable, segregated sustainable palm oil in the world”.
NBPOL reports that it continues to invest in methane capture arising from palm oil mill effluent, as part of a broader commitment to “zero new carbon emissions”. The company also reports that it seeks to pass on to smallholder producers a share of price premiums gained from the attainment of sustainability certification. In 2013, NBPOL maintained that it was paying a premium equivalent to US$8.72/tonne of crude palm oil for certified sustainable smallholder production, while “book & claim” GreenPalm certificates were priced much lower, at US$2.76/tonne.
NBPOL’s 2012/13 sustainability report provides an assessment of the company’s performance against the stricter POIG criteria, rather than the standard RSPO standards.
Editorial comment
With palm oil production in PNG and the Solomon Islands and refineries in the UK and PNG, NBPOL has played a leading role in developing stricter sustainability principles and criteria in response to evolving consumer concerns. This places NBPOL, an ACP-based company, in the forefront of debates around sustainability requirements.
Significantly, one of the objectives of the POIG initiative is to create “added value for innovative and progressive producers through increased market recognition and demand for palm oil products from innovative and improved practices”. This can be seen as a vitally important development in the sustainability debate, since it seeks to ensure that end users place a commercial value on the attainment of sustainability standards, to the benefit of primary producers.
This is a critical issue for the ACP in the evolving sustainability debate in OECD countries. Securing price premiums (“increased market recognition”) on sustainably produced goods can be seen as essential in maintaining sustainable production at times of adverse market developments or weather-affected production levels.
The experience of NBPOL suggests that within the ACP, experience exists that could be tapped into, thus strengthening collective ACP engagement in major policy debates around issues such as private sector sustainability standards and the critical issue of the distribution of the costs and benefits of sustainability certification along the supply chain (see Agritrade special report, ‘ The ACP and increased private sector demands for sustainability certific...’, 26 May 2014).
