More palm oil producers are looking to be certified to allow them to continue accessing the European Union although it may lead to higher expenses.
The EU is due to fully enforces its 2011 regulation on food labeling, which would require a separate label detailing the various vegetable conten of food items.
Roundtable on Sustainable Palm Oil (RSPO) Indonesia director Desi Kusumadewi said the international certification and multi-stakeholder organization just added a new requirement mandating that any palm oil company seeking to obtain the certificate must first discontinue establishing plantations on peatland.
The new criterion has revised the RSPO’s former principles and criteria (P&C) to incorporate additional standards, which had already applied to carbon emissions, peatland, pesticides, forced labor, human rights and anticorruption.
Due to the fact that many existing producers operate on peatland — a practice permitted under a 2009 Agriculture Ministry regulation on the utilization of peatland for oil palm cultivation — they would need to pay extra for an audit of their peat plantation operations that would assess the environmental impact in those areas.
“We still witness many companies requesting certification; the new criteria does not discourage them,” Desi said.
Desi said that he RSPO certification emerged from downstream entities exerting pressure on the upstream.
“Producers may have received stronger calls for sustainable practices from their end-users or from banks in order to receive funds,” she said.”
She said companies listed on the stock market also performed better when they were certified as a sustainable firm.
Indonesia is the largest RSPO — certified palm oil producer in the world, contributing 48.4 per cent of the total global supply of sustainably produced palm oil.
Global production of certified sustainable palm oil (CSPO) rose by about 31.5 percent to 10.76 million metric tonnes between Jan. 2013 and April of this year, while certified production areas grew by 50 percent to 1.53 million hectares.
CSPO sales are expected to hit a record high this year due to larger purchase commitments from main-buyer countries.
In the first quarter of this year, CSPO sales rose 48.7 per cent to 506,586 metric tonnes, a new quarterly high, according to RSPO.
The significant increase, Desi explained, was greatly attributed to the EU’s food labeling regulation and national commitments from buyers.
The EU introduced the food labeling regulation in 2011 and will start enforcing it in December of this year, obliging all food producers to acquire labels if they use rape oil, palm oil, soy oil or any other types of edible oil that are currently categorised as vegetable oil.
Palm oil imports to the EU account for 10 per cent of total global production, according to a report by Reuters.
A wave of negative campaigning, however, has been aimed at oil palm cultivation, especially in Indonesia and Malaysia — a natural habitat for the orangutan — where activists say rain forests have been destroyed to make room for oil palm plantations.
Desi said that green certification had been widely acknowledged as a way to reassure consumers that a chunk of global production was being produced through sustainable means.
“By putting a sustainable logo on the products, it may help tackle negative campaigning on palm oil and at the same time prevent consumers from shifting to products using other vegetable oils, which themselves are not necessarily more likely to have been more sustainably cultivated than palm oil,” she explained.
