Palm Oil - Certification Process Offers Producers an Option to Buy Their Way Green

by Joyce Nelson

In early September, Rainforest Action Network (RAN) launched a major campaign targeting 20 of the largest snack food companies that use palm oil in their candy bars and potato chips. “Cut Conflict Palm Oil, Not Rainforests” says RAN, citing massive conversion of rainforests and peatlands to palm oil plantations in Malaysia and Indonesia. RAN’s campaign also highlights labour abuses, declining wildlife populations, and violent clashes between communities and palm oil developers.

RAN says these issues cause major risk to the reputations of

brands like Kraft, Nestle, Hershey’s, Conagra Foods, Dunkin’ Donuts, Mars, General Mills, PepsiCo, among others.
Ironically, however, many of these same companies and/or their suppliers have already long pledged to source only palm oil certified under the Roundtable on Sustainable Palm Oil (RSPO). And, they likely have their “Greenpalm Certificates” to prove it.
Therein lies a story of NGO-business “collaboration” gone terribly wrong, leading to a decade of greenwashing during which palm oil production and use has almost tripled, along with environmental and societal horror stories from Southeast Asia and, increasingly, Africa.

Greenpalm Certificates
The Roundtable on Sustainable Palm Oil was formed in 2004 – the brainchild of the international World Wildlife Fund for Nature (WWF) and food giant Unilever. The RSPO involves growers, processors, multinational food companies, investors, and NGOs.  For the Roundtable to classify palm oil as “certified sustainable,” growers must undergo third-party assessments verifying the oil is the product of “legal, economically viable, environmentally appropriate, and socially beneficial management and operations.” These RSPO certification standards are quite high, but – in a bizarre twist – the standards are only voluntary, not mandatory, for RSPO members.

Even more problematic, when the RSPO was first established, one of its member companies came up with a scheme for paper “offsets” called Greenpalm certificates. This scheme allows a purchaser of palm oil to claim that all its sourced palm oil has been “sustainably produced,” when in fact it has instead simply purchased Greenpalm certificates.
John Bryant, the CEO of food giant Kellogg Co., explained (Financial Post, March 8, 2012): “We take the whole area of sustainability of palm oil very seriously. We buy sustainably sourced palm oil, and where it’s not available we buy the green certificates to cover it.”

As The Economist (June 24, 2010) noted, “Big companies all buy from processors and traders [like Wilmar, Archer Daniels Midland, Cargill, Bunge], rather than directly from plantations. In an ideal world, plantations and mills would be certified as sustainable, and the oil they produce would be shipped separately. But this is expensive, say people in the industry, so there is no large-scale segregation of supply: if plantations produce oil certified as sustainable, it [physically] gets mixed in with the rest.”
In 2012, only about 15 per cent of global palm oil production was RSPO certified.

In its September 2013 report, Certifying Destruction, Greenpeace International stated: “RSPO-certified producers receive certificates for each tonne of certified palm oil they produce, then sell these certificates via the Greenpalm online marketplace to palm oil end users such as food manufacturers, who may then claim to be ‘supporting sustainable palm oil’….Certificates are traded anonymously and the actual palm oil in the end user’s products is bought on the open market. This system offers no traceability; end users usually do not know which plantation either the Greenpalm certificates or the physical palm oil came from. The palm oil in their products may be from plantations involved in forest destruction.”

That situation has fostered the purchase of Greenpalm certificates by global companies, who consider the offset price to be just another part of their marketing expenses.
Costing about $3 per ton for palm oil, or $20 per ton for palm kernel oil, the paper offsets are, according to nationalgeographic.com (August 8, 2013), “a cheap marketing alternative to physical sustainable palm oil, which runs at many times that cost, depending on the product.” Multinational brands “have been quick to jump on the opportunity to divert criticism with the use” of these certificates. “Corporations including Unilever, Kellogg, and Avon products clearly state on their websites that they are ‘sourcing sustainable palm oil’ through the use of these certificates.”

The Palm Oil Consumers Action (POCA) group calls Greenpalm certificates a greenwashing tool and an “obstacle” to developing a sustainable industry. POCA’s LeAnn Fox told nationalgeographic.com, “If we look at other certification bodies like the organic label or fair trade label, when you buy something that is organic or fairly traded, that’s what it is. No one else has offsets like the RSPO where brands could say we couldn’t find organic product so here’s a conventional one and the offset we bought to [magically] make it organic.”
In May 2013, the RSPO – at its Extraordinary General Meeting in Kuala Lumpur – formally rejected calls to stop certifying as “sustainable” palm oil produced through deforestation, the use of poisonous chemicals like paraquat, and the destruction of peatlands. Desmogblog.com (May 6, 2013) called this “an exercise in patently absurd Orwellian PR: if something produced through wholesale destruction of tropical rainforest is considered ‘sustainable,’ the word has lost any meaning at all. But the decision is sadly symptomatic of broader challenges faced by sustainability certification efforts across a variety of different industries.”

Why Protect the RSPO?
After the Kuala Lumpur meeting, even RSPO co-founder WWF declared the Greenpalm certificate process a failure and joined a new palm-oil certification body, the Palm Oil Innovation Group. Nonetheless, neither RAN, nor Greenpeace International, nor WWF International is calling for companies to abandon the RSPO. Apparently, that’s because at the upcoming AGM of the RSPO in November 2013, some Malaysian palm producers are threatening to withdraw from the RSPO and weaken it substantially – thereby leaving little to build on. But if another certifying organization is starting, it’s not clear why the RSPO is necessary.

Greenpeace’s Certifying Destruction report states:  “The Palm Oil Innovation Group (POIG) is an initiative by NGOs and progressive palm oil companies not to reject the RSPO but to go beyond it through additional requirements for the industry…. While RSPO standards on forest conversion and other areas such as land rights are clearly inadequate, they remain an important improvement over no standards at all. Hence, Greenpeace is not calling for companies to abandon the RSPO; rather, we call for them to go beyond RSPO standards.”

But according to the UN Permanent Forum on Indigenous Issues, at least 60 million more peasant farmers worldwide risk losing their land and means of subsistence because of the planned rapid expansion of palm oil plantations into Africa and elsewhere.  Liberia, Uganda, Cameroon, Angola, the Congo, Nigeria, the Ivory Coast, Ghana, Togo, and the Phillippines have all been targeted for palm oil development. And those Greenpalm certificates will likely be used to ‘justify’ such expansion to the public.

Gang Green?
In a piece for The Nation (May 1, 2013), Naomi Klein took aim at several Big Green NGOs – WWF, the Nature Conservancy, Wildlife Conservation Society, Natural Resources Defense Council, Conservation International – for their failure to divest from fossil fuels. She wrote:  “Maybe that shouldn’t come as a complete surprise, since some of the most powerful and wealthiest environmental organizations have long behaved as if they had a stake in the oil and gas industry. They led the climate movement down various dead ends: carbon trading, carbon offsets, natural gas as a ‘bridge fuel’ – what these policies all held in common is that they created the illusion of progress while allowing the fossil fuel companies to keep mining, drilling and fracking with abandon. We always knew that the groups pushing hardest for these false solutions took donations from, and formed corporate partnerships with, the big [greenhouse gas] emitters. But this was explained away as an attempt at constructive engagement – using the power of the market to fix market failures. Now it turns out that some green groups are literally part owners of the industry causing the crisis they are purportedly trying to solve.”

Similarly, in a hard-hitting piece called Way Beyond Greenwashing: Have Corporations Captured Big Conservation? published in greenmedinfo.com (August 11, 2013), Jonathan R. Latham, co-founder and executive director the Bioscience Resource Project, questions the whole notion of NGO collaboration with big business, especially the goal of using commodity certification to achieve “market transformation” of industries.

He writes: “In public, the conservation nonprofits [like WWF] justify market transformation [by certification schemes] as cooperative; they wish to work with others, not against them. However, they have chosen to work preferentially with powerful and wealthy corporations. Why not cooperate instead with small farmers’ movements, indigenous groups, and already successful standards, such as fair-trade, organic and non-GMO?  These are causes that could use the help of big international organizations… Instead, the new ‘Responsible’ and ‘Sustainable’ standards [for agribusiness] threaten organic, fair-trade, and local food systems which are some of the environmental movement’s biggest success.”
Latham further notes:  “One clue to the enthusiasm for ‘market transformation’ [certification schemes] may be that financial rewards are available. According to Nina Holland of Corporate Europe Observatory, [commodity] certification is ‘now a core business’ for WWF. Indeed, WWF and the Dutch nonprofit Solidaridad are currently receiving millions of euros from the Dutch government (under its Sustainable Trade Action Plan) to support these schemes. According to the plan, 67 million euros have already been committed, and similar amounts are promised.”
Meanwhile, the dark story hidden behind the Roundtable on Sustainable Palm Oil keeps unfolding.

Captive Children
Palm oil and its derivatives are found in thousands of products worldwide, everything from packaged donuts, scented candles, and soap, to lipstick, toothpaste, candy bars and biodiesel. One of the reasons that palm oil is used so widely – instead of alternatives such as canola oil, soy oil, sunflower oil, or olive oil – is that it is cheap by comparison.

Recently, a team of investigators found out just why palm oil is “cheap.” In July, Brandeis University’s Schuster Institute for Investigative Journalism released a report stating that thousands of child workers and forced labourers are being held captive on plantations owned by one of Malaysia’s biggest palm oil producers, Kuala Lumpur Kepong (KLK), an RSPO member which sells to palm oil supplier Cargill, which in turn sells palm oil to Nestle, General Mills, Kraft Foods, and Kellogg.

A similar situation exists in Indonesia. Report author E. Benjamin Skinner wrote for Bloomberg Businessweek (July 18, 2013): “A nine-month investigation of the industry, including interviews with workers at or near 12 plantations on Borneo and Sumatra – two islands that hold 96 per cent of Indonesia’s palm oil operations – revealed widespread abuses of basic human rights. Among the estimated 3.7 million workers in the [$44 billion] industry are thousands of child labourers and workers who face dangerous and abusive conditions.  Debt bondage is common, and traffickers who prey on victims face few, if any, sanctions from business or government officials.”
A glimmer of hope: the US Federal Trade Commission (FTC) is now cracking down on “eco-friendly” fraudsters who try to bamboozle the public. And their crackdown may even hit the powerful RSPO.

In 2012, the FTC issued a revised set of rules under which companies can claim that a product or process is environmentally sound. Otherwise, the FTC legal watchdogs will take them to court, as they’ve done to big clothing retailers selling “bamboo” products that are actually rayon, paint manufacturers claiming their products emit no hazardous fumes, and others.

According to the New York Times (May 31, 2013), the new FTC guidelines “also update previous guidance on what constitutes a legitimate certification or endorsement.  They now state explicitly that any certifying body must be independent of the industry it oversees and that any ‘material connection’ to that industry must be disclosed.”
One would hope that slavery, deforestation and land-grabbing – all passed off as “green” and “sustainable” through the Greenpalm certificates – would catch the attention of the Federal Trade Commission.  Meanwhile, consumers are spreading the word to avoid buying palm oil products, especially by eating primarily whole, local, and homemade foods.

During Earth Island Journal’s recent interview with Naomi Klein, she referred to the “elite roots” of many environmental organizations and their “not being willing to give up their elite status” in order to make real change. Within days of that interview being published in the UK’s The Guardian, Kensington Palace in September announced that Prince William was leaving the military to form a conservation coalition which includes WWF-UK.

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Joyce Nelson is an award-winning freelance writer/researcher and the author of five books.

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