Exploring sustainable palm oil production in Indonesia

Our Low-Emissions Agriculture research theme is examining opportunities and barriers to producer participation in the sustainable palm oil certification. Photo: World Bank
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Ago 15, 2013

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Paul Winters, Hsuan-wen "Ann" Kuo and Chanisa "Nan" Niljinda (University of Michigan School of Natural Resources and Environment)

Our Low Emissions Agriculture research team, together with Master students from University of Michigan, are visiting palm oil plantations in Indonesia. Together they are exploring opportunities and barriers to producer participation in the Roundtable on Sustainable Palm Oil (RSPO) Certification.

The flight from Jakarta to Pekanbaru in Sumatra’s Riau province is only about an hour and half, but the change in scenery is dramatic. The hustle and bustle of an emerging megacity of over 10 million people - and nearly as many motorbikes! - gives way to a small urban core amidst one of Indonesia’s major agro-industrial landscapes. Then, there’s another 3-4 hours of driving before we actually get to the palm plantation.

For three days, the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) Low-Emissions Agriculture research team and Master students from the University of Michigan’s School of Natural Resources and Environment were guests at an oil palm plantation in East Sumatra.

During our visit, the plantation’s staff walked us through the complete process of producing crude palm oil, from harvesting fresh fruit bunches to crushing and refining the oil before it is shipped overseas to markets throughout Asia, Europe, and the United States.

The University Master students are in Indonesia this summer to investigate the sustainability of the oil palm industry. At the same time, our research theme on Low-Emissions Agriculture is examining the opportunities and barriers to producer participation in the certification.

Learn more about commodity agriculture, supply chains and their sustainability

In addition, the theme will be looking the program’s additionality, that is, the progress towards implementing sustainable practices that could not have been achieved without the guidance and support of the Roundtable on Sustainable Palm Oil (RSPO), a voluntary certification scheme, with specificS Principles and Criteria.

The plantation straight away pointed out the parts of production process where sustainability practices were employed. For example, integrated pest management decreased the amount of pesticide applied to the crops. A methane capture system resulted in a zero-waste production process.

In addition, smallholder farmers from the local community enjoyed many of the benefits from these best practices as the parent company had provided technical assistance and financial support to their local community partners.

To the representatives from this company, applying environmental- and agricultural best practices, dealing fairly with the local community, and even sharing information with us as researchers was second nature. But this experience is by no means assured if you choose to visit many, if not most, of the oil palm plantations in Indonesia or the rest of Southeast Asia, Africa, or South America.

Palm oil plantation and workers in Indonesia. Photo: Hsuan-wen "Ann" Kuo

Palm oil expansion is a leading cause of deforestation in the tropics and prospects for boosting sustainability all too often are of secondary concern. The potential for profit is high and governments of developing countries consider palm oil expansion a significant opportunity to lift millions of people out of poverty.

RSPO has also received criticism of not being strict and stringent enough. Unresolved issues relate to palm oil expansions into peat lands and forests, and creating clear performance standards on greenhouse gas emissions and pesticides (PDF), among other things.

Palm oil production is a major driver of deforestation. Photo: Rainforest Alliance

However, the RSPO is one way in the right direction, guiding companies efforts to develop its product more responsibly.

But despite the sustainability initiative taken by a select group of companies, there are still vastly more non-certified than certified palm oil companies. The annual production of certified palm oil from RSPO members is just over 7 million tonnes, and currently 14 per cent of annual global volume of palm oil production.

An active debate is ongoing amongst non-governmental organisations (NGOs) and between NGOs and businesses about which sustainability practices are necessary and how quickly industry members ought to adopt them into their production processes.

A case study of our work in Indonesia will be featured in a report about the conceptual linkages between the design and structure of certification programs and participation and additionality.

A second team will be in Brazil later this summer to study the Sustainable Agriculture Network’s (SAN) certification for sustainable cattle production. The project is funded by a CGIAR Climate Change, Agriculture, and Food Security grant to conduct research on the various systems governing the development of commodity agricultural products.

We are only halfway through conducting the interviews we have scheduled with stakeholders--including growers, manufacturers, sustainability consultants, third-party assessors, and social and environmental NGOs, but already a few important themes have emerged:

1. NGOs and producers use different indicators of success. For example, principle 8 of the RSPO certification requires companies to continuously improve on their sustainability commitments. Many of the NGOs we’ve spoken to interpret this requirement to mean that companies must continue to meet increasingly stringent targets for sustainability. Companies on the other hand, tend to view continuous improvement in a more open-ended way, periodically reviewing their progress from a baseline. This affects the rate of uptake of new sustainability practices.

2. Membership in the RSPO is a tool for recruiting new companies, serving as a step-ladder to certification. There is a distinction between certified and non-certified growers, but another level that is important to recognize is this intermediate group who are members, but not yet certified. Companies that become members join the multi-stakeholder conversation about how the industry can move towards greater sustainability. They learn from their peers about the successes and hurdles and they learn more about environmental and social issues through regular interactions with NGOs. While sustainability takes time, which is bought by this intermediary step, the concern from NGOs is that this step may also lead to a delay in efforts to become certified in a timely manner.

This week, we will visit another plantation in Sumatra as well as get the opportunity to meet with various stakeholders in Sanggau, West Kalimantan. These interviews and visits continue to provide us with a picture of how the design of RSPO certification can and does affect the participation of growers.