The palm oil industry is particularly involved in the development of sustainability standards. Driven by growing global demand, palm oil production has expanded rapidly in the last few years. Palm oil is the most widely consumed vegetable oil in the world, and its popularity has grown even more with the emergence of new market opportunities in the biofuels sector, in addition to its traditional food and oleochemical uses.
This strong growth has unquestionably contributed to the economic development of the main producer countries – Indonesia and Malaysia – which account for 87% of global production. Palm oil cultivation provides income for many smallholders, whose produce accounts for around 40% of world palm oil output.
Environmental and Socio-economic Concerns
However, the expansion of palm oil cultivation has also generated serious environmental concerns. It results in tropical deforestation and thus has a major impact on biodiversity loss, with the decline of emblematic species such as orangutan in Southeast Asia. It contributes to climate change through deforestation, but also through the conversion of peatlands, which are of vital importance in soil carbon sequestration.
The huge forest and bush fires in recent years in Indonesia which are associated with clearing lands for agricultural or forestry plantations caused severe air pollution and public health problems across the sub-region. In addition, industrial plantations are sometimes responsible for polluting waterways, into which chemical inputs and processing plant waste are dumped.
Moreover, this expansion has sometimes resulted in social abuses and human rights violations, in the form of land grabbing by plantation companies at the expense of local and indigenous communities or of the exploitation of plantation workers.
Sustainability Standards in Oil Palm Industry
Condemnation of these abuses by NGOs and growing consumer awareness of the adverse impacts of the expansion of palm oil plantation have driven the development of sustainability standards. Such standards are aimed at transforming production practices in order to mitigate their adverse environmental and social effects.
In 2001, representatives of the food processing and distribution sector launched a dialogue with WWF and plantation companies, leading to the creation in 2004 of the first voluntary sustainability standard in the sector, the Roundtable on Sustainable Palm Oil (RSPO).
There are now 2.41 million hectares of RSPO-certified plantations, while sustainable palm oil accounted for 20% of world trade in this product. Meanwhile, several other initiatives proposing a vision of palm oil sustainability have emerged, positioning themselves as either a complement or an alternative to RSPO.
New Challenges to Overcome
The development of these initiatives demonstrates the growing awareness among producers, the industry and the public authorities of the need to transform the sector to enable it to contribute to the Sustainable Development Goals (SDGs). But this proliferation of sustainability standards itself poses new challenges, even though the environmental and social problems that motivated their emergence remain unresolved.
At the institutional level, the proliferation of sustainability initiatives since the creation of RSPO reflects a real fragmentation of the regulatory framework. This proliferation also raises the question of the articulation of these voluntary standards with the public regulations and national sustainability standards that producer countries have adopted.
Finally, measures to ensure the sustainability of palm oil cultivation need to bolster their credibility by guaranteeing better inclusion of the millions of smallholders, and by contributing in an effective, measurable way to mitigating the adverse social and environmental impacts of growth in palm oil cultivation. In this field, the role of collaborative and multidisciplinary research in providing strong evidence-based impact evaluation of standards is crucial.
Note: This is an excerpt from the book Achieving Sustainable Cultivation of Oil Palm (Volume 2) published by Burleigh Dodds Science Publishing.