Late last month, the Roundtable on Sustainable Palm Oil (RSPO), the leading standard for certifying an oil found in half of all supermarket products, released a draft of a new set of rules for how the commodity can be cultivated in ways that do not harm people or the environment.
RSPO, which certifies one-fifth of the world’s palm oil as sustainable, has been under pressure to update its standard, as regulators have signalled that certification for forest-risk products such as palm oil, soy and rubber does not go far enough to prove the validity of sustainability claims. “The reality is that markets, regulators and consumers are no longer willing to accept a certificate as full and final proof of sustainability,” RSPO’s chief executive Joseph D’Cruz told attendees at the organisation’s annual conference a year ago.
The European Union’s regulation on deforestation-free products (EUDR) in particular has prompted RSPO to interrogate the rigour of its standard. Analysis has found technical and fundamental gaps between the certification and the legislation, and critics have suggested that EUDR, and regulations that are likely to follow it in other jurisdictions, challenge the legitimacy of RSPO and other commodity certification schemes. EUDR, which is set to be delayed partly as a result of lobbying from palm oil producers, requires companies in the palm oil supply chain to provide information beyond what is needed to be RSPO-certified.
RSPO’s standards, which are finalised through consensus among growers, consumer goods firms, retailers and non-governmental organisations (NGOs), are called the RSPO principles and criteria (P&C), and are reviewed every five years. The first P&C were adopted in 2005, the year after the founding of RSPO; 2024 is the third iteration. The P&C consist of seven principles – one less than the last iteration – and more than 40 criteria that growers need to fulfil. RSPO last published its revised P&C in 2018, when the certification prohibited deforestation after November of that year, planting on peatlands, and improved workers’ and human rights defenders’ rights.
The latest version of the standard, which will be effective from 13 November 2025, features commitments to protect forests and peatlands, reduce the climate impact of the industry, and safeguard the rights of workers, Indigenous groups, local communities and environmental defenders.
The P&C “represent a significant step forward in ensuring the sustainable growth of the palm oil industry through implementable and auditable standards,” the organisation said in response to criticism from environmental watchdog Greenpeace.
Greenpeace said that the standard weakens its no deforestation commitment by allowing forest clearance after November 2018 – the benchmark set when the P&C were last revised – as long as remedy and compensation procedures are applied. This will mean that the RSPO standard is still not compliant with EUDR, which has stipulated that no deforestation can occur December 2020.
Joining the Eco-Business Podcast to discuss the implications of 37-page document is RSPO’s director of standards and sustainability, Yen Hun Seng, a data scientist who joined the organisation a few months before the last P&C was launched in 2018.
Yen Hun Seng, director of standards and sustainability, Roundtable on Sustainable Palm Oil. Image: RSPO
Tune in as we discuss:
- How has RSPO changed in the last five years?
- How has RSPO managed lobbying during the P&C revision process?
- How has the new standard changed on deforestation?
- How does the standard align with EUDR?
- How are smallholders being included in the sustainability conversation?
- What to expect from RSPO’s annual conference this month?
The edited transcript:
You joined a few months before the launch of the last principles and criteria which were launched in November 2018. In that time, RSPO has gone through quite a lot of change. Take us through some of those changes and some of the pressures that RSPO has been under to revise its standard.
I came in as a data scientist, and the thing that struck me was that RSPO is a very complex organisation. It is a multi-stakeholder organisation. We convene for change.
Reflecting on what’s happened over the five years: yes, we have a new standard. It was a big step forward in a lot of areas. But in that time, RSPO certification has also grown. We have gone from about 360 mills at the end of 2018 to over 500 certified mills today. Production has grown from about 12 million metric tonnes to over 16 million metric tonnes in 2023. Sales of CSPO – certified sustainable palm oil – have grown from about 6 million metric tonnes to over 10 million metric tonnes in 2023. We have to be doing something right to see all this growth. That encompasses a huge range of issues on people, planet, and prosperity.
I think everyone acknowledges that RSPO is the gold standard, and we can say a lot of things about what we are doing on smallholders, labour, deforestation, biodiversity, climate change. But RSPO is more than just the standard. It’s also about the processes and the support systems that underlie the standard, how it’s implemented, how compliance works, how assurance works, how the data is generated and becomes traceable, and that all supports the standard itself.
We are also developing Prisma, a unified architecture that will bring together all our different standard systems and procedures under one umbrella architecture to really digitise our systems and deliver the data necessary that people in the supply chain need.
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The process can take time. It can involve some disagreements…But everyone is in the same room because they want the same thing.
At the same time, we have to acknowledge that the market environment has changed in the last five to six years. We have got new regulations. The expectations of our members in the downstream and in the wider value chain have evolved and the standard has to keep pace. So, to answer your question, we have revised the standards for several reasons:
One, because we are obliged to. RSPO is a member of the ISEAL Alliance and ISEAL Alliance Code of Good Practice for standards development states that we have to review a standard at least every five years and revise it if necessary. That review was conducted and it was concluded that a revision was necessary.
Two, we revised the standards because we should. We wanted to strengthen implementability, auditability and clarity to support assurance – the standard could be clearer in certain aspects to reduce interpretation risk.
Three, we revised the standard because we have to. There are new pressures and expectations, and it’s our responsibility to prepare our members for the things that are being expected of them today and perhaps tomorrow.
What has it been like managing the various stakeholder groups and the lobbying to push for how the standard should be shaped?
A lot of sleepless nights! Just to give you a flavour of the stakeholder constituencies that are involved. RSPO is an organisation rooted in consensus. Our stakeholders are the seven ordinary membership sectors that represent the palm oil value chain; the growers, those that buy it and use it, the processors, traders, the consumer goods manufacturers, retailers, banks, investors and civil society, which includes the environmental and social non-governmental organisations.
What you call lobbying, I would call representing stakeholder interests. All of these representatives have to come together and find a way forward on all the different aspects that we care about in a way that is impactful and implementable. The process can take time. It can involve some disagreements. There may be differences in opinions in how specific indicators were structured or worded. “This word’s missing.” “I don’t like that word.” “This word carries this implication.” There may be huge debates about practical concerns in operational realities.
There may even have been some unintentional mistakes or phrasings that required stakeholder feedback to adjust. And that’s why we also had a very extensive stakeholder consultation process in seven countries across the world involving different parties coming together and agreeing on the way forward.
Because everyone is in the same room because they want the same thing. They want to progress and they want to show that RSPO is representative of what sustainable palm oil is. It’s a tireless process.
How do you ensure that each of the stakeholder groups has an equal voice during the standard revision process?
RSPO is based on balanced and proportional representation. So different stakeholder groups are given an equal share based on the proportion and in balance with the rest of the groups. Ultimately, they have to come to a consensus in how to move forward.
Let’s talk about deforestation. In the last P&Cs in 2018, deforestation was prohibited. What has changed in the 2024 P&Cs regarding the need for companies to avoid clearing forests to get certified? Greenpeace is concerned that RSPO has dropped the high carbon stock approach methodology to come up with its own version. Greenpeace also says that RSPO is allowing forest clearance after November 2018 as long as remedy and compensation procedures are applied. Can you respond to those two concerns?
For high carbon stock, the principle we are talking about here is Principle 7 in the Principles & Criteria. Specifically, Criterion 7.7, which is high conservation value and high carbon stock. High carbon stock is still in the standard. Criterion 7. 7 has been reformulated without any diminution but to clarify the procedure and enhance implementation.
It is worth noting that RSPO is more than just the standard. It is about supporting procedures and the systems that surround it. A lot of these requirements and rules on land clearing – what can be developed, what can’t be developed – actually happen at the membership level. It’s a prerequisite for certification.
As you enter the RSPO as a member, you have to disclose what your land holdings are. We have to do a land use change analysis to see what has happened in the span in which RSPO has been active and remediate if necessary.
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High Carbon Stock is still very much in the standard and nothing has changed in terms of (no-deforestation) cut-off dates.
We also have the new planting procedure. If there are any new oil palm developments from our members – and this happens all before certification within the standard – we check that this has been done according to the various scenarios and timelines.
HCV and HCS are the foundation of this. Together they approximate what a natural forest is, which is in alignment with the various regulations that are being developed or are in development. So we are providing clarity on what we are protecting. We’re putting everyone on a firmer foundation on what they have achieved.
And because there are different definitions of forest and of deforestation, we can also use our supporting systems that we are developing – like Prisma, geospatial analysis, and deforestation alerts – to address any gaps and advise our members accordingly. The 2018 [no deforestation] cut-off is still there – it is in Criterion 7.7 in Annex 5.
We will be providing further clarity on the scenarios that apply. But nothing has changed substantially in terms of forests and conservation approach.
HCV has been there since day one, in November 2005, when the pilot standard was introduced. HCS was introduced in 2013 and then became a clearance criteria in 2018. We are iterating on that in a way that is clearer and enhances implementation.
RSPO’s approach to conservation goes beyond just addressing deforestation, it covers reforestation, aforestation, rehabilitation. We have the remediation and compensation procedure. It is also about peatlands, riparian reserves, steep terrain, and fragile and marginal soils. All these sensitive and critical ecosystems that may not be a forest, but are still very important to protect. RSPO already goes beyond a lot of what upcoming regulations are looking at.
HCS is still very much in the standard and nothing has changed in terms of cut-off dates. We will be providing further guidance and further details in the months to come to provide more clarity before the standard becomes effective.
Greenpeace called the new standard a “missed opportunity” to fully align RSPO with the European Union Deforestation Regulation (EUDR). Just because you’re RSPO certified, it doesn’t automatically mean that you are EUDR-compliant. How do you respond to that?
First of all we have to look into the nuts and bolts of the EUDR regulation, and – delay not withstanding – we are actually prepared for the EUDR both in terms of systems and compliance.
The EUDR is more than just (a regulation on) deforestation. It also has requirements on human rights, on free, prior and informed consent (FPIC), and legal compliance. All of these are in our standards and we have tried to enhance or improve them in ways that make it clearer, that support implementation, and make it more auditable.
Also, EUDR requires traceability of the granular information. That’s why we are upgrading our systems into Prisma. I don’t think there’s a single standard or approach out there that is aligned fully with the EUDR.
We can try to move the alignment and I think the European Commission has also acknowledge that the RSPO is in very close alignment with EUDR.
Gaps may exist. But we have systems that are being developed to address those gaps and advise our members, accordingly.
But I think what Greenpeace is getting at is the definition of forest and deforestation in the EUDR itself, which RSPO is in alignment with, but perhaps not completely.
I don’t think it is possible to actually be in full alignment, simply because the EUDR has also just released its guidance and that changes things, because now there are caveats on fallow, or temporarily abandoned land, that is still considered agricultural lands for at least 10 years if agricultural activity resumes.
So there is more nuance in how you are actually clarifying what a forest is. And I think RSPO is very much in alignment with that.
We are also in alignment with the other regulations that are out there. The UK Environmental Act 2021 uses a similar definition of forest, but now includes also forests that are partially or permanently submerged in water, including peatlands and intertidal mangroves.
The United States Forest Act that is currently being debated uses a definition of forest that is similar. But now there is a clarification that it [a forest] should be composed mainly of native species, which requires on-ground verification.
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I don’t think there’s a single standard or approach out there that is fully aligned with EUDR.
And also the US Forest Act is looking at illegal deforestation so that the sovereign laws of the country are respected.
So there are different definitions out there – to expect one standard to meet every one of those, I think, is a very high bar.
What we can do is be firm and confident in what we stand for and have the systems in place to detect any potential gaps and advise our members accordingly.
It’s also worth noting that RSPO’s entire suite of standard systems and procedures is also very much in alignment with EUDR. Not much has been mentioned about it, but the EUDR also applies to the exporters from the EU of anything involving the seven commodities according to Appendix One. So If palm oil enters into Rotterdam, it has to be fulfilled with EUDR due diligence.
But if that refinery in Rotterdam sells it to a German derivatives processor, who then sells it on to a Belgian oleochemicals company that exports it to the US, that Belgian oleochemicals company also has to do due diligence based on the palm that it might be using. And if that US company that re-exports some of the products back to France, the whole EUDR due diligence happens all over again.
So the whole traceability chain needs to be complete internationally and intra-Europe for that to happen and RSPO, in conjunction with the supply chain certification standard and the development of Prisma, will have the ability to provide that full supply chain traceability.
The Malaysia and Indonesia governments have been pushing back on EUDR, arguing that smallholders struggle to comply with the regulation, because of the stringent traceability requirements. Tell us how RSPO is trying to include more smallholders in its certification scheme.
Reflecting on the last two years, I think the point about smallholders is justified – not just in palm oil, but in the other commodities, particularly rubber, coffee, and cocoa.
There are at least seven million oil palm smallholders around the world that are either fully or partially involved in palm oil. They have different operational realities, different frameworks that they are working with. But what is true across all the commodities is that smallholders are furthest up the upstream supply chain, which is very long and complex. Any market or trade disruptions disproportionately affect them.
They have no say in it, and even if they are doing exactly what they are supposed to be doing in terms of sustainability, they may be excluded, because of pressures elsewhere. So it’s very important that we include them. We have the independent smallholder standard that was introduced in 2019 for the purposes of certification and bringing them into a certified supply chain.
The 2024 revision of the Independent Smallholder (ISH) Standard takes a clearer approach, which are broken down into steps, to really try and make it easier for independent smallholder groups that join RSPO to become certified. That’s already a considerably long journey in itself. It can take between four to six years for groups to join and become certified from the point of first engagement.
So we hope that we can reduce the timelines to bring more of them in. I think we have seen some traction in that. In 2023, we have seen the number of certified independent smallholders globally grow by about a third. We’ve also got schemes for smallholders to consider as well. And this is across eight different geographies.
There is still a long way to go. We need our partners and collaborators to work together to continue to bring smallholders in because we can’t have them afford to lose interest in sustainability. If they feel they can’t be included in the wider sustainability economy, excluding them could lead to unintended consequences. If smallholders feel that they can’t be included and that their voices are not heard, they may very well not practise sustainability.
But market mechanisms are also important. Credits for independent smallholders, which RSPO does have, are important. There are direct market mechanisms that compensate the ISH groups for their work, that’s bought by manufacturers and retailers of end products.
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If smallholders feel that they can’t be included and that their voices are not heard, they may very well not practise sustainability.
We encourage our downstream members to continue supporting ISH groups with IS credits. But also listening to the smallholders themselves, having gone through all the stakeholder consultations. What they really want is to establish beneficial relationships with the mills that they physically sell the fresh fruit bunches to, because they have to sell the fruit to someone.
We need to create an ecosystem that’s inclusive, that they can form those relationships with certified mills, that results in not just a market mechanism, but also a relationship that will benefit their livelihoods in the long run.
The P&C Principle 5 is on smallholder inclusion. And there’s been a new addition to that. We are now requiring certified mills to provide opportunities to engage with and actively consult interested smallholders with a view to them being part of their mills’ physical RSPO supply chain. We want to close the loop and ensure that certified smallholders have a pathway to the market, and the information on sustainable practices that they are putting in place is available for the rest of the market to trace back to.
I think we are barely scratching the surface of what we can do. But at least the standard is more inclusive.
Let’s get on to human rights, which is another point of contention in the latest standard. So some social NGOs raised the alarm that an earlier draft of the standard dropped the principle of FPIC, which gives Indigenous peoples and local communities the opportunity to push back against any potential development. But the latest draft of the standard includes FPIC in it. Can you tell us a bit about RSPO’s stance on FPIC?
FPIC has been retained in full in the final draft.
The earlier drafts had worded it as “rights of communities were respected”, which is, I guess, a wording that the social NGOs and other stakeholders had issues with. And that’s why we had two to three months of very intensive stakeholder consultations. And that’s why we wanted to hear the feedback in the first place so that we can make adjustments. The earlier language that couched it in a different way has been reformulated into the 2018 language.
Tell us what we can expect from RSPO’s upcoming annual roundtable in Bangkok, that is happening from 11 to 13 November.
It’s themed “Partners for the next 20” because we just had our twentieth anniversary. I think we have achieved quite a lot in 20 years. RSPO has managed to change the vocabulary of sustainability in the palm oil industry in general.
We’ve got to 20 per cent of global palm oil production in 20 years. Some might say that that’s not enough. But I can say that achieving that has been no mean feat, especially because the absolute numbers of certified volumes are still growing by about half a million to a million tonnes a year.
And compared to other commodities that have a sustainable standards like RSPO, only cotton is higher. Other certified agricultural commodities are still at about 10 per cent of certification levels or below.
And beyond just the headline numbers, we also want to get better at talking about the actual positive impacts that we know we are making on the ground, that we know our RSPO members are enabling.
And that’s why we also have our revised theory of change and our impact report that dives into the details of that. What can we say on climate change? What can we say on biodiversity? What can we say about community engagement? What can we say about women’s empowerment?
If you look forward to the next 20 years, we are likely to see at least another four reviews of the standards – potentially four more revisions if those reviews conclude that revisions are necessary.
So the standard itself does need to keep up with the times, and that’s why we need partners, we need collaborators, we need the world’s best minds to come together and convene to continue to ensure that the standard can keep up with the times.
We can’t predict the future, so future-proofing the standard is always going to be a bit of a tricky issue. It’s never going to be a silver bullet. But what we can do is also future-proof the systems under it – the mechanisms, the systems, the assurance aspect of it to enable continued certification and future implementation.
We need to upgrade and digitise our systems. You can’t just rely on a certificate. You need the information behind that certificate.
But also in consideration of things that are happening that reflect what the world might need in five or 10 years, such as climate change, we are redeveloping our palm greenhouse gas (GHG) emissions calculator to a new version 5 that’s in alignment with the GHG protocol. Particularly Scope 1 and Scope 2 emissions.
We are also looking at things like water scarcity, given the change in climate patterns and the likelihood of water scarcity becoming more acute and potentially triggering conflicts between water users.
We could also be looking at introducing some modular aspects to the standards. We could be looking at how certification itself could be strengthened with verification and validation mechanisms.
We are also looking at how we could provide better advice to wider industry and even other agri-commodities and how they can accelerate on their own pathways to sustainability. There is a lot that we can do.
