IFC / World Bank Group support of RSPO

IFC (part of the World Bank Group) supports the development of the RSPO, primarily through its Biodiversity and Agricultural Commodities program (BACP). Read about it via its flyer here, http://www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/fly_Biodiversity_BACP/$FILE/BACP+Flyer.pdf.

Reported in the BACP newsletter, Issue 10, June 2011:

Through its grant-making facility, BACP supports the RSPO both directly and indirectly.

BACP provided a grant directly to the RSPO to support a Biodiversity Coordinator and activities of the Biodiversity Technical Committee (BTC).

BACP has given grants to various NGOs and other organisations, in support of their efforts at RSPO, these include:
• PanEco Foundation is working to demonstrate the potential for palm oil production on Indonesia's 4.7 million hectares of degraded land in an effort to preserve the country’s biodiversity-rich areas of High Conservation Value (HCV) from being converted to palm oil plantations......
• The Zoological Society of London (ZSL) is working to 1. improve the effectiveness of the biodiversity-related RSPO Principles and Criteria......
• Fauna and Flora International (FFI) has been piloting an innovative partnership model that helps producer companies comply with the biodiversity-related criterion of the Roundtable for Sustainable Palm Oil (RSPO)’s Principles and Criteria. The partnership engages large-scale producers to take an active role in protecting and managing HCV areas on or adjacent to their concessions......
• The World Resources Institute (WRI) is working to make compliance with RSPO biodiversity related principles and criteria easier for producers by providing necessary information and toolkits for successful and sustainable production on degraded land......

IFC’s BACP also has various efforts Supporting the Round Table for Responsible Soy (RTRS).

BACP states: Agricultural expansion is the leading cause of habitat loss around the world and poses one of the gravest threats to global biodiversity. Tropical export commodities have dramatically increased production in the last fifty years, resulting in the destruction of much tropical habitat. The Biodiversity and Agricultural Commodities Program (BACP) seeks to reduce the threats posed by agriculture to biodiversity of global significance by transforming markets for target agricultural commodities. To transform the commodity markets, BACP supports projects that generate greater supply, demand and financing of biodiversity-friendly products. Projects must meet specific criteria and address one of the four following components:
1. Removing policy barriers
2. Supporting better production
3. Increasing demand for biodiversity-friendly products
4. Encouraging financial services to support biodiversity-friendly practices

Source: http://www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/newsletter_biodiversity_BACP_issue10/$FILE/BACP_Newsletter_Issue+10.pdf.

Khor Reports comment: NGOs and other organisations have been quick to avail themselves of BACP funding for their projects. It is surprising to us that growers (especially the smaller estates, smallholders and/or those operating near high conservation / sensitive areas), who may have quite a lot work to do too, do not seem to have done so yet (not listed among 'grantee highlights' in the BACP newsletter). Perhaps BACP could assist them too?

Greenpalm CSPO premium dives to 30 cents

Greenpalm reports on its website: "GreenPalm passes key milestone as 2 millionth certificate traded... GreenPalm, the certificate trading programme that enables businesses to support sustainable palm oil production, is celebrating the trade of its 2 millionth certificate. This milestone has been achieved in just over two and a half years, enabling palm oil producers to earn over $15m of additional income for operating sustainably."

Greenpalm's market data shows that palm oil certificates last traded at 30 cents and PKO certificates trade at $3.90.

Source: http://www.greenpalm.org/en/home, accessed 6 September 2011.

Khor Reports comment: The 30 cents premium is a big come down from the near USD40 price premium that certified sustainable palm oil (CSPO) first traded at. Arguably, Greenpalm's price is the most important single market indicator for the demand for sustainable palm oil, which is so far only available under the Roundtable for Sustainable Palm Oil (RSPO) initiative. The price collapse, of about 99%, indicates an excess of supply over demand for the RSPO's CSPO. At 30 cents per metric tonne of CSPO, there is scant hope for additional income for those operating sustainably. Most of the largest palm oil growers are heavily committed to RSPO certification and they will be hoping that this lead price indicator picks up. Palm oil sustainability experts often estimate the cost of RSPO certification at USD6-12 per metric tonne for corporate growers. Smallholders have been slower to get onto the programme; growers often say that a fair premium is needed to help this group. Sustainability practitioners point out that it may not be so difficult for this group to participate; but they need a change of mind-set and a dash of pride and hope. Although the market for sustainability seems to deliver a "no" - let's hope that is a temporary message.