Palm Oil Monitor – Weekly Update 5th September 2018

Is GAR attacking Greenpeace?

Golden Agri Resources appears to have lost its patience with the ‘no palm oil’ campaigns in the European Union. Its sustainability lead, Anita Neville, told Food Navigator:

“If you claim that you are not using palm oil because you are concerned about deforestation, and you are replacing it with animal fat or with soy, you basically just displace the issue of deforestation from Indonesia to probably Brazil (where large amount of land is used for soy farming) … In which case, you don’t care about deforestation and you don’t want to be part of that solution, you basically want to cash in on hysteria around palm oil.”

GAR’s ire seems to have been prompted by the growing understanding that no matter how well palm oil producers behave – whether by implementing ‘no deforestation’ policies, looking after local communities, generally improving their practices across the board and having a significantly lower deforestation footprint than other major food commodities – they are consistently painted as the ‘bad guy’ and used as fodder in NGO fundraising campaigns.

This also comes at a time when major palm producers are actively calling for ‘no deforestation’ policies to be introduced and made mandatory in the RSPO scheme.

So what might have set off GAR?

Greenpeace’s ‘Rang Tan’ campaign was released last week; for all intents and purposes, this is an anti-palm oil video.  There are no subtle messages about having companies adopt RSPO certification, or implementing ‘no deforestation’ policies. It is a clear message: drop palm oil.

It flies in the face of everything Greenpeace is doing as part of the High Carbon Stock Approach, and will possibly burn goodwill between Greenpeace and companies it has worked with over the past few years, e.g. GAR.

This is a clear and deliberate move. It isn’t a small change to a policy position. This is a high-profile campaign that has drafted a celebrity, Emma Thompson, for the execution. It follows the ‘emotional’ path that Greenpeace UK lead John Sauven foreshadowed two weeks ago. According to Marketing Week, Sauven said that statistics on biodiversity and the environment are “quite cold …  I don’t think people can really use that information. If you want people to take action, you need to find a way to motivate them to take action.”

If ‘Rang Tan’ is successful enough, more such ‘emotional’ campaigns will probably follow.

How will palm oil producers respond? So far they’ve been silent. In an emotional debate, facts and science don’t work. Producers inevitably will need to consider their own shock tactics.

In the past Greenpeace has hedged its bets on palm oil; it has said it is not anti-palm oil, and maintained that it supports sustainable production. It has done deals and alliances with producers like GAR. This appears to have been thrown out the window, and GAR’s response looks like the first indication of the palm oil sector finally waking up, albeit slowly, to that new reality.

Can ISPO be strengthened?

Indonesia’s GAPKI has called for the strengthening of the Indonesia Sustainable Palm Oil (ISPO) scheme. Specifically, GAPKI is calling for the scheme to cover the industry’s downstream products as well as CPO.

What GAPKI is effectively asking is that different elements of the supply chain be certified. This would require the development of a traceability or chain of custody standard for ISPO, in addition to the certification of production.  MSPO, in contrast, is currently completing its supply chain certification standard.

GAPKI’s call comes at the same time that ISPO is facing a complete overhaul.

As we mentioned several weeks ago, UKAID and Indonesian NGO Kehati are undertaking a ‘Revamping ISPO’ program.

At the same time, there is a draft Presidential Decree in Indonesia that seeks to ensure the scheme is in line with all other legal requirements.

But, the real strengthening that needs to take place is ensuring that the scheme can be considered a standard in the strict sense. This is potentially problematic; our understanding is that BSN (Badan Standardisasi Nasional – Indonesia’s standards body) doesn’t have the scope in its official remit to cover sustainability standards.

This is a problem because to have credibility – not just among NGOs but among international certification and standards bodies –  a national standard needs to have undergone the appropriate standard development process according to international norms. And, ideally, it should be published and endorsed by the national standards body.  A Presidential Decree will not change this. It will generate political goodwill from the top, but the strengthening really needs to take place from the bottom up.

MSPO has followed the required international norms in developing its standard.  This is something that is yet to be recognised by policymakers in the European Union, particularly the European Commission’s special study on palm oil.

UKAID’s involvement with the ISPO standard stands in contrast with the UK approach to MSPO. The UK is seeking a trade deal with Malaysia following Brexit; a step to expediting this process will be recognising and/or supporting MSPO, which it is yet to do.

European Union Publishes anti-African Palm Oil Research

Palm oil press was dominated last week by a new EU Joint Research Council (JRC) paper on the ‘threats’ caused by palm oil development in Africa, and specifically to primate species.  The paper also had CIRAD researchers on board.  Yet, the JRC paper had several shortcomings, including: there is growing global demand for palm oil;

  • The suitability of land for oil palm cultivation in Africa almost perfectly matches primate (e.g. chimpanzee) ranges;
  • Certification and land-use planning tools may not mitigate any threats or damage;
  • Therefore reducing demand for palm oil is a good idea.

As far as papers go, the data is all there, and it’s reasonably robust. However, the overall hypothesis is best described as a hammer looking for a nail.

The areas that the researchers consider to be of highest coincidence of both palm oil suitability and primate areas appear to be in the Democratic Republic of Congo, Republic of Congo, Cameroon and Gabon, as well as Guinea and Sierra Leone.

‘Suitability’ as described by the researchers comes from robust FAO and other data; it refers only to oil palm cultivation.

But ‘suitability’ in the commercial and political world is a completely different beast. Just because the DRC is a ‘suitable’ place for growing oil palm, it does not mean that the commercial criteria for making a major investment in oil palm will be positive. The political, policy and commercial risks of investing in anything in the DRC are extraordinarily high. It would take a brave CEO and an even braver board to invest there, whether it’s for palm oil or petrol.

Even after a palm industry is established, it does not mean that expansion will be profitable or risk free. Nigeria sits right in the middle of the study area. Its palm oil industry is the third-largest in the world – but its productivity is extremely low and its profitability is marginal. This is due to a number of factors, including processing and transport infrastructure, land tenure risks and so on. Need evidence? Nigeria imports palm oil. From Southeast Asia. Because it’s cheaper.

The problem with this paper is not that its information or conclusions on the overlaps between palm suitability and primate range is wrong; it appears to be quite robust.

The problem is that drawing a direct line from that crossover to chimpanzee threats, and then to a recommendation on reducing palm demand across the board is a huge stretch of credibility. And this doesn’t even consider that the same areas might be suitable for other crops, or for timber exploitation.

A message that can be inferred from the paper is that reducing palm consumption will save primates in Africa; this is implied in much of the media coverage of the article. And this is simply not true.

The bigger question is why JRC and CIRAD research is pursuing palm in Africa. CIRAD has had many programs in support of palm in Africa. But the political climate in France is taking an anti-palm turn. This is particularly the case in the emerging debate on HCS and ILUC. Can this type of research be used to state that palm oil is ‘high risk’ when it’s from anywhere – including Africa?

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