20 Dec 2017: Why did RSPO volume drop in 2016? P&C new policy watch.
Editor's note: I had readers asking why RSPO volume dropped in 2016. A few reasons are cited, including the switchover from GreenPalm. Also, I keep an eye on volume from the big buyers. Notably the biggest buyer submitted volume reports as follows:
For those wanting to hear the side-lines chatter on RSPO, please get in touch for direct briefing. Please note specialists point out that the new P&C has many new policy proposals, including one that conflict estates cannot be sold. FGV investigation on over-priced purchase (considering that 40% unplantable under enviro-social voluntary rules).
Unilever Sells Spreads Business to KKR for $8.1 Billion By Thomas Buckley December 15, 2017 https://www.bloomberg.com/news/articles/2017-12-15/kkr-is-said-to-near-deal-to-buy-spreads-business-from-unilever
International NGOs Condemn IOI Group’s Plan to Divest from Conflict Palm Oil Plantation -- If IOI divests, communities of Long Teran Kanan risk losing their lands, culture and livelihood December 14, 2017 https://www.ran.org/international_ngos_condemn_ioi_group_s_plan_to_divest_from_conflict_palm_oil_plantation
Newsbreak: FGV investigating overpriced Asian Plantations purchase - The Edge Malaysia December 18, 2017 http://www.theedgemarkets.com/article/newsbreak-fgv-investigating-overpriced-asian-plantations-purchase
12 Dec 2017: POIG charter for processors, AOMG update notes RSPO reports loss of 0.55 million tonnes of demand, Sabah-MSPO discord?
Editor's note:
Glad to have chatted to AOMG's Mr Qua who was in Bali. He comments: "At the RT the release of the 2017 Impact Report was announced. Here we saw that total CSPO sales in 2016 had decreased to 5,632,731 MT, down by 549,963 MT from 2015. At RT 14 we heard the oil palm growers co-chair of RSPO, Dato’ Carl Bek-Nielsen in his welcome address hitting out at RSPO members who were using the “no palm oil” label on their products...". Please read here, http://www.aomg.org.my/index.php/2014-03-22-08-56-36/news-updates/85-rt15-bali-28-30-november-2017.
Checking the more recent data, reported sales up to Sept 2017 is 4.5 million (the chart below seems not to have been updated). The dampening impact on non-certification traceability on RSPO volumes has been increasingly apparent; but hopefully, yoy volume expansion can pick up again for 2017. For 2018 onwards, European and global buyer demand and supply from MSPO will be worth watching. Also, Sabah is aiming to come on strong with RSPO supply, it will be good to see what demand commitments they have for this. Sabah says that it will compete on governance, and the discord between Sabah's policy plan and MSPO has hit the news headlines.
source: RSPO
SFD: Sabah palm oil should compete via governance November 18, 2017 http://www.theborneopost.com/2017/11/18/sfd-sabah-palm-oil-should-compete-via-governance/
(Sabah) ‘RSPO is one man’s wish list’ Sangeetha Amarthalingam / The Edge Financial Daily November 14, 2017 http://www.theedgemarkets.com/article/rspo-one-mans-wish-list
POIG publishes charter for sustainable palm oil processors 11-Dec-2017 By Niamh Michail --
The Palm Oil Innovation Group (POIG) has launched a charter for traders and processors of sustainable palm oil that will "break the link between palm oil production and the destruction of forests and peatlands". https://www.foodnavigator.com/Article/2017/12/11/POIG-publishes-charter-for-sustainable-palm-oil-processors?
RSPO Investigating Reports of Ongoing Labor Abuse at Indofood Plantations By Sheany, December 11, 2017 http://jakartaglobe.id/news/rspo-investigating-reports-of-ongoing-labor-abuse-at-indofood-plantations/
8 Dec 2017: Post-RT News flow (more added)
Editor's note: Keeping an eye on post-RSPO RT newsflow. Some who were at the Bali meeting report "not more than 200 in the hall". There were various side meetings going on too, but some NGOs did not make it or left pretty fast. A couple of people were there are now complaining about insurance not covering the travel glitches. A more substantive post-mortem to emerge when participants have time to report.
RSPO Must Respond to Complaints Against Sime Darby: Rights Group By : Dames Alexander Sinaga December 05, 2017 -- Sime Darby said in a statement on Monday (04/12) that the land dispute has been discussed at the RSPO's annual meetings since 2012. "Throughout this period, RSPO complaint manager also visited the communities four times. As of December 2017, SDP [Sime Darby Plantation] management has held 25 meetings with the communities surrounding MAS to earnestly resolve the outstanding issues," the statement said. http://jakartaglobe.id/news/rspo-must-respond-complaints-sime-darby-rights-group/
Labor abuses persist in RSPO-certified palm plantations, report finds by Hans Nicholas Jong on 8 December 2017 https://news.mongabay.com/2017/12/labor-abuses-persist-in-rspo-certified-palm-plantations-report-finds/
Deforestation in Sumatra carves up tiger habitats into ever smaller patches
by Basten Gokkon on 5 December 2017 https://news.mongabay.com/2017/12/deforestation-in-sumatra-carves-up-tiger-habitats-into-ever-smaller-patches/
The palm oil industry promises reform, but there’s still no sign of change, Blogpost by Bagus Kusuma - 4 December, 2017 -- In 2013, Wilmar became the first palm oil trader to adopt a No Deforestation, No Peat, No Exploitation (NDPE) policy. Others followed suit, and by the end of 2014, most household brands and big palm oil companies had sworn to protect Indonesia’s rainforests...Not one of the traders could prove it wasn’t buying from palm oil companies that destroyed rainforests. Most could not even say when there would be no deforestation in their supply chains. Instead of cutting out dirty palm oil, traders have a ‘don’t ask, don’t tell’ policy...http://www.greenpeace.org/international/en/news/Blogs/makingwaves/the-palm-oil-industry-promises-reform-but-the/blog/60820/
Palm Oil Giant Vows to Reform After Indonesian Child Labour Probe By : Beh Lih Yi, November 30, 2017 -- The world's biggest palm oil processor Wilmar has launched fresh measures to improve conditions of thousands of children living on its plantations, but campaigners said on Wednesday that it was not doing enough to tackle widespread use of child labour. ilmar was targeted in an Amnesty International probe last year which found children as young as eight were working in "hazardous" conditions on plantations run by the Singapore-based firm and its suppliers in Indonesia. http://jakartaglobe.id/business/palm-oil-giant-vows-reform-indonesian-child-labour-probe/
Indonesia Says Palm Oil Key to Achieving UN Sustainable Development Goals By : Sheany, November 29, 2017 -- "The palm oil industry is key to Indonesia achieving the Sustainable Development Goals, including poverty eradication and narrowing the development gap," said Mahendra Siregar, executive director of the Council of Palm Oil Producing Countries (CPOPC), as quoted in a statement issued by the Ministry of Foreign Affairs. Indonesia has criticized a resolution on palm oil and deforestation the European Parliament adopted in April, which the country said discriminates against palm oil manufacturers and disregards efforts to introduce sustainable practices in the industry. Mahendra also cited the Amsterdam Declaration, which he said, if adopted, would be an example of discriminative policy, because it does not apply to other vegetable oils. "There have been negative marketing campaigns by several companies, including one by KLM [Royal Dutch Airlines], which demanded that its suppliers not use any palm oil in their products," he said. He also referred to ongoing antidumping policies and subsidies in Europe and said they are unreasonable, because they are not based on any clear evidence. ... http://jakartaglobe.id/news/indonesia-says-palm-oil-key-to-achieving-un-sustainable-development-goals/
30 Nov 2017: RSPO RT15 Bali (from afar) - newsflow and comments, Wed and Thurs (Day 2 and 3)
Editor's note: For various reasons including the more obvious (I don't have substantial corporate expense budget for non-insured travel to Bali), I am looking at RT15 Bali from afar. Am hearing lots from industry friends. Quite a few didn't make it before airport closure and also some left pretty quick once the eruptions escalated. A note on the travel dilemmas here, http://khorreports-palmoil.blogspot.my/2017/11/note-on-bali.html. The airport reopened Wed afternoon, as the winds shifted! Look forward to catching up with participants on and offline. I've updated for Day 2 items, (Day 1 cancelled) and have added Day 3. Those interested in "commensurate effort" should be interested in Ferrero's estimates in the newsflow link.
The great thing is that you can follow RSPO RT15 here... https://twitter.com/RSPOtweets. Video of the opening here, https://www.facebook.com/RSPO.org/videos/1712164242180228/. Thanks to RSPO and those posting! These are official channels. For wider opinions channel, try #RT15 on twitter, https://twitter.com/search?q=%23RT15&src=tyah
Report is of 300 participants remainung at RSPO RT15 as per yesterday afternoon. Compared to 800 participants at RSPO RT14 last year (according to AOMG's write-up, http://aomg.org.my/index.php/2014-03-22-08-56-36/news-updates/76-rt14-2016-bangkok-8-10-november-2016).
Related newsflow
Here are newsflow and chat items related to RSPO and contemporaneous (these are also in my LinkedIn, https://www.linkedin.com/feed/update/urn:li:activity:6341065834101862400). RSPO RT time is widely regarded as that time of year when negative newsflow is especially high for palm oil:
- Wilmar International reports some positives with green finance and child labour policy. Read http://www.todayonline.com/singapore/wilmar-becomes-first-palm-oil-company-link-bank-loan-sustainability-performance and its Child Protection Policy.
- Greenpeace complains on palm oil traders. Read https://uk.news.yahoo.com/greenpeace-slams-indonesia-palm-oil-industry-deforestation-081013528.html and its report.
- KLM Royal Dutch Airlines slammed over inflight magazine for ‘campaign’ against palm oil http://www.thejakartapost.com/news/2017/11/27/klm-slammed-over-inflight-magazine-for-campaign-against-palm-oil.html
- So I am hearing from Bali that some teams are leaving Wed and Thurs (Tues program cancelled and abridged RT15 program set for Wed-Thur). The Surabaya route seems the choice for most. About travel to Surabaya, http://www.news.com.au/travel/travel-updates/incidents/desperate-tourists-pile-on-buses-ferries-to-escape-bali/news-story/eb1e5b1c2af4849fc99cf093497b90c2.
- Ferrero and sustainable palm oil: ...sourced 180,000 tonnes of palm oil or 0.3 per cent of the total global production annually. Out of which, 90 per cent came from Malaysia and the rest from other producing countries. "So, if all edible palm oil used in EU has the same premium as Ferrero, the extra cost would be 500 million euros per annum - that would go to the upstream of Malaysia and Indonesia. "Assuming this extra cost is fully passed to EU consumers, that would mean one euro per capita per year," he explained.... http://www.malaysiandigest.com/news/709575-sustainable-palm-oil-it-takes-two-to-tango-says-ferrero.html.
- RSPO Secretariat leaves out Malaysian palm oil concession maps, says it infringes OSA TheEdge Nov 29, 2017-- “We have been told by our lawyers that the Malaysian maps are under the OSA (and) we want to be on the right side of the law, so we will leave it at that. “However, Sabah has told us categorically that it is absolutely okay with the maps being made public, because its land is a state matter. So for Sabah, members’ maps are published on our website,” he said. http://www.klsescreener.com/v2/news/view/313221
- In chat groups: 1) issue of HCV assessment system (HCVRN-ALS) at the Roundtable on Sustainable Palm Oil (RSPO) and 2) Greenpeace's allegations rebutted by Aksenta Socio-Enviro Management Consulting (refer to tweet: A response to Greenpeace).
Khor Report's synopsis and some comments on RSPO RT15
(screen shots, sources: RSPO Tweets and Linkedin sources as indicated)
RSPO P&C 2018 to include HCS Approach? But what about RSPO Next. Market uptake for this has really muted expectation, and so "commensurate effort" view is gloomy? Some see HCSA inclusion as necessary for survival, some have the very opposite view and ponder demise of interest from non-integrateds.
On Africa - Liberia, Gabon presentations. Was plantable area in forested Africa 41 or 63%? I had my eye on the incremental areas in Africa. Added HCV 13,405 ha and is that plantable 22773-13405= 9368 ha for 41% plantable in total area in forested settings? Oh hang on, maybe they calculate HCV+certified=total; so 13,405+22,773=36,178 so certified (planted) ratio is 63%.
On Smallholders. Talk of RSPO Smallholder Academy, of RSPO Smallholder Empowerment Platform. Mr Sutiyana was the first smallholder in Kalimantan to get RSPO certified. It took a year and a half to become certified and he hopes the 1% of certified independent smallholders will increase to 5% in the next few years. A study reports says that independent smallholders can increase premiums through certification as FFB quality increases and they can sell direct to mills. If profit-NPV is so good for smallholders, I'm just wondering: a) why supply-chain experts report that 1/3 of early certified RSPO smallholders have chosen not to stay on (lead farmers already had better practices!) and b) why I hear year-in year-out from so many working on this their worries about smallholders renewing (and moreover, trouble to convince them to join) and NPP for smallholders? We need studies covering of larger number of certified (and no longer certified) smallholders, done over time. In contrast, some other supply-chain efforts in cocoa and others report much better numbers, even approaching 100,000 of independent smallholders (Indonesia scheme oil palm smallholders are relatively easy to certify as large areas are even fully managed by the inti). Worth checking these other approaches perhaps? Also, it is not accurate to negatively depict smallholder zones as being weak links and black boxes. In reality, a lot of the old-customary use areas are smallholders (post independence decades), and it is in fact expansion in more recent decades that is led by corporate expansion. Well, okay, so smallholders aren't good at documentation and reams of paperwork... so bad.
On HCV. Report that HCV patches smaller that 200 ha are still important for biodiversity and connectivity. 70 plantations NPPs reports were digitised and studied.
On GHG. Faizal Parish presented Impacts of GHG assement and reporting: "Of the 3% peatlands identified in assessments, 100% has being conserved; leading to 308,000 mtVO2/yr of peat oxidation avoided.... 194,100 ha assesses with 30% set aside for HCV, HCS and social."
Panel – Simon Lord, Ben Vreeburg, Faisal Parish: On ‘weak-link’ companies - remove or rehabilitation? One to one basis? “Use a carrot, not a stick”. Certification and beyond to NDPE - how can can RSPO deliver on these. More philosophical question on whether certification is successful if it merely distinguishes leaders from laggards (and not 100% inclusive). "It’s not about beyond certification. It’s about certification AND beyond," said Dr Simon Lord. On addressing the haze, a gloomy statement "national rules will not impact action on the ground". WRI asks about an accountability framework? (remark from a reader: yes, there already is RSPO Next, but are buyers interested?).
End of Wed, Day 2 (Day 1 cancelled), some side events cancelled.
Update on complaints procedures:
Update on complaints procedures:
- further alignment with the dispute settlement made, strengthen relations with certification + accreditation bodies, separation of power
- GA13 resolution has been fully passed - Complaints Panel no longer need endorsement of the Board. CP have power for suspension and termination
- How is a successful complaint filed? CP need clear info and evidence to proceed
- Complaints Panel invite authors of reports to put an official complaint forward. This will enable the full expertise of the CP to investigate. The result is a faster, more transparent resolution
- In response to why complaints are prolonged, the Complaints Panel explain standard operating procedures must be followed. Delays in responses and waits for investigative reports must also be taken into consideration
- Q from @lizajmurphy: what mechanisms are in place for Complaints Panel to learn from past cases? A: CP learnings over the last year are now moving into the P+C review
RSPO P&C 2018
A collection of items, I think are relevant on the new Principles & Criteria 2018 above. "Theory of Change" is important, I am told. Also there is reference to HCS Approach being included?
In the RSPO Tweets:
- Panelists discuss one thing they are proud of being achieved in #RSPO P&C revision, with simplification of text being a highlight for Perpetua George - Wilmar #RT15
- Rosemary Addico @Solidaridadnetw shares a that highlight from the P&C Review is the further inclusion of #smallholders. #RT15
- There are now more specific indicators for implementation, and for auditors says @daryll_reads. #RSPO Criteria is now nuanced #RT15 #sustainable #palmoil
- .@darrelwebb ‘Our vision was to make this the most inclusive P&C to date. Over 10,000 people were reached and given the chance to comment on the review.’ #RT15 #RSPO
- Olivier Tichit ‘P&C is now looking beyond the production of palm, and instead looking at how to achieve the goal of industry transformation’ @ortichit #RT15 #sustainable #palmoil
- “We are going in the right direction [with P&C Review], but we need to communicate what we are doing” @ortichit
(quotes from: https://twitter.com/RSPOtweets)
https://twitter.com/RSPOtweets
The sponsors; note the US-based conglomerates. Some relationship with the rise of US membership at RSPO?
The General Assembly
- Resolution GA14-6a: To confirm the appointment of PricewaterhouseCoopers as the auditors of the RSPO for the financial year ending 30 June 2018. ADOPTED
- Resolution GA14-6b: Relocation of the De Facto RSPO Executive Office to Jakarta, Indonesia, http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6b.pdf; NOT ADOPTED
- Resolution GA14-6c: Strengthening the RSPO Executive Office, http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6c.pdf; NOT ADOPTED
- Resolution GA14-6d: Generation of sustainability practices and fair trade for independent mills, http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6d.pdf; RESOLUTION REMOVED
- Resolution GA14-6e: Enhancing credibility of the "Annual Communications of Progress", http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6e.pdf; NOT ADOPTED
- Resolution GA14-6f: Balanced representation in the RSPO General Assembly voting process based on membership category, http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6f.pdf; ADOPTED.
- Resolution GA14-6g: Official recognition of IGC endorsed Indonesian RSPO grower member representatives within all RSPO forums, as formally representing the Indonesian Growers Caucus (IGC), http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6g.pdf; ADOPTED
- Resolution GA14-6h: Relocation of the RSPO Secretariat Office to Jakarta, Indonesia, http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6h.pdf; NOT ADOPTED
- Resolution GA14-6i: Resolution to Amend The Statutes of the RSPO and the Code of Conduct for members to formalise the role of the Complaints and Appeals Panel, http://www.rspo.org/ga/ga14/Resolutions/ResolutionGA14-6i.pdf; ADOPTED
Source: https://www.rt.rspo.org/c/ga14-notices-announcements31/ and https://twitter.com/RSPOtweets
End of Thurs, Day 3
Mount Agung volcano erupting in Bali – in pictures
https://www.theguardian.com/world/gallery/2017/dec/01/bali-volcano-mount-agung-in-pictures
Mount Agung volcano erupting in Bali – in pictures
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