Biofuel Fueling Deforestation
The latest European Union plan to ban palm oil has been defeated, but the anti-palm oil forces in Europe have only just begun.
The different lawmaking arms of the EU — the European Commission, Parliament and the Council — recently reached a compromise on the bloc’s revised renewable energy regulations, known as the Renewable Energy Directive (RED). Like all EU compromises, it is messy, but with one element of certainty: the proposed ban on palm biofuels has been rejected.
RED is of significance to Indonesia. The regulation effectively subsidizes renewable fuels for transport, including Indonesian palm oil, and has increased demand for Indonesian exports in recent years.
This led to palm oil taking market share from less competitive EU oilseeds, such as rapeseed. The most recent evidence of this is claims of dumping made by European biofuel producers against Indonesia, which was rejected at the World Trade Organization.
There is furious lobbying around the RED revisions. European farmer and Green groups wanted palm oil banned. This was supported by members of the EU Parliament and several EU governments.
The European Commission knew a ban was unworkable from a trade policy perspective: it opposed the plan. Some EU member states’ governments, pursuing ongoing trade relations with Indonesia and Malaysia, also opposed the ban.
The final compromise juggles the interests of European farmers, the EU’s trade interests, and a general desire to phase out food/feed-based biofuels.
Green parliamentarians hailed it as a victory, stating palm oil was being “phased out” by 2030. This has been widely reported in the media: it is not accurate.
The RED text contains no specific phase-out of palm oil. Palm oil is not even mentioned. The proposed ban on all palm oil biofuels from 2021 has disappeared. Forbes reported that the EU Parliament “surrendered” in the negotiations and backed away from banning palm oil.
Instead, the text says that in 2019 the commission will finalize a methodology to determine which biofuels — and their production processes — can be considered “high risk” in terms of greenhouse gas savings. This will incorporate both indirect land-use change (ILUC) and high carbon stock (HCS).
On paper, all crops — European crops included — will be subject to the same measures.
Any “high-risk” biofuels — imported or European — will have their use frozen at 2019 levels, and the commission will then recommend a phase-out strategy for high-risk biofuels, commencing in 2024 and ending in 2030.
But “high risk” is yet to be determined. The ‘high carbon stock’ criteria may be carried over from the original RED. Schemes such as RSPO, RED and ISCC already comply if that is the case.
ILUC is the true wildcard here. The ILUC debate has been going on for nearly a decade. The concept has been criticized repeatedly for its lack of a robust methodology.
But it’s not just oil palm growers that dislike ILUC. European farmers — including offshoots of Deutscher Bauernverband (German Farmers’ Association) — have been critical of ILUC. This is because ILUC is one of the main arguments used by the Greens against feed- and food-based biofuels, whether in the EU or elsewhere.
After the European summer, the commission will begin work on defining what “high risk” biofuel feedstock means for purposes of the biofuel policy.
Additionally, Europe is moving to regulate palm oil used for foodstuffs. As a first step, the European Parliament is considering a motion calling for controls on agricultural imports from developing countries.
Palm oil has been singled out despite being well behind other commodities — such as beef, soybean and maize — in terms of its deforestation footprint. This is to be expected from the European Parliament; a lopsided vote against palm oil is almost certain.
Following that, the EU will finalize the “EU Action Plan” on deforestation. This action plan will seek to introduce a new regulation aimed at curbing palm oil imports. Ideas being floated include a trade agreement and licensing system for palm oil — similar to the VPA-FLEGT model currently used for Indonesian timber product exports. Indonesian officials and business groups have been quick to push the idea of using Indonesia Sustainable Palm Oil (ISPO) certification as the basis of such an agreement.
These types of policies often serve a dual purpose. They protect the domestic industry with a regulatory barrier, and fall in line with the EU’s euro-centric notion of sustainable development.
For nearly a decade, palm oil has been a target for European agriculture, lawmakers and non-government organizations. There is nothing about the revised RED policy that changes this, even though the ban was defeated. Those in the industry need to be ready for the policy battles to continue. The EU and Palm Oil
RSPO Background & Update (November 2020):
The Roundtable on Sustainable Palm Oil (RSPO) is an industry body formed in 2004 with a mission to reassure consumers that palm oil bearing its certificate of approval is free from links with primary forest destruction, damage to endangered species’ habitats or abuses of the rights of indigenous peoples and communities. As you can see, just from the following links, complaints and commentary, the RSPO is severely lacking after 16 years of blowing smoke.
Certified ‘sustainable’ palm oil plantations endanger mammal habitats and biodiverse tropical forests over 30 years. https://phys.org/news/2020-07-certified-sustainable-palm-oil-fields.html
Earth.org supports sustainable palm oil in concept. Not there, yet. https://earth.org/how-palm-oil-contributes-to-environmental-destruction/
Environmental Investigation Agency: Who’s watching the Watchmen (2019) https://eia-international.org/news/palm-oil-watchdogs-sustainability-guarantee-is-still-a-destructive-con/
Environmental Investigation Agency: Who’s watching the Watchmen (2015): https://eia-international.org/report/who-watches-the-watchmen/
Mongabay Perspective (2020) https://news.mongabay.com/2020/08/palm-oil-certification-sustainable-rspo-deforestation-habitat-study/ RSPO meaningless
Palm Oil and Biodiversity (2018) https://www.theguardian.com/environment/2018/jun/26/palm-oil-disastrous-for-wildlife-but-here-to-stay-experts-warn
BBC November 2020 https://www.bbc.com/news/world-asia-54798452
New York Times, Wholesale Deforestation https://www.nytimes.com/2018/11/20/magazine/palm-oil-borneo-climate-catastrophe.html?action=click&module=Top%20Stories&pgtype=Homepage
As you will see, in 2015, the Environmental Investigation Agency (EIA) and Grassroots released the report Who Watches the Watchmen? It revealed reckless management, extensive fraud as well as sub-standard and underhand assurance processes within the RSPO. The RSPO is often hailed as the best certification scheme for palm oil based on its standard – the Principles and Criteria (P&C). However, it receives far less scrutiny as to how it is ensuring its standards are adhered to and, therefore, its impact. Four years on from that report, the RSPO is about to start implementing its new and improved P&C – and we return to the scene of the crime to assess what, if anything, has changed and how the RSPO has responded to the serious concerns raised in 2015. Investigations have found that the action taken by the RSPO is severely lacking. Despite it setting up an Assurance Task Force, this body has failed to deliver and complete its objectives. The Assurance Task Force stands as one of the worst-run working groups of the RSPO. It has been disorganized, unprofessionally managed, and has chronically missed deadlines. The last update from the Assurance Task Force in 2018 reported 55 per cent of the activities were incomplete. Of the five key objectives under the Task Force, only the development of Free, Prior and Informed Consent guidelines has been completed, but their effectiveness is unknown. For the other four objectives, the actions and outputs under each of them has not led to the fulfillment of the objectives. Many of the same issues remain, have recurred and could easily occur again.
Non-adherence to the RSPO’s standards is systemic and widespread, and has led to ongoing land conflicts, labor abuses and destruction of forests. As the world approaches 2020 targets to halt deforestation, the RSPO needs to rapidly implement radical solutions to restore its credibility. We question whether the RSPO is willing and able to rectify its systemic failures – ultimately, voluntary certification is too limited by its voluntary nature.
The Watchmen report identified:
- Auditors providing fraudulent assessments that cover up violations of the RSPO Standard and procedures;
- Auditors failing to identify indigenous land right claims;
- Auditors failing to identify social conflicts arising due to abuse of community rights;
- Auditors failing to identify serious labor abuses;
- Auditors failing to identify risks of trafficked labor being used in plantations;
- Ambiguity over legal compliance;
- Auditors providing methodologically and substantively flawed High Conservation Value (HCV) area assessments that will enable destruction of HCVs;
- Certification bodies displaying weak understanding of the P&C standard;
- Certification bodies providing suspect assessments in response to legitimate complaints from NGOs, which fail to address the substance of the complaints;
- Conflicts of interest due to links between certification bodies and plantation companies.
Following the publication of the Watchmen report, a Resolution on ‘Ensuring quality, oversight and credibility of RSPO assessments’ which compelled the RSPO to act on the concerns raised was adopted in 2015 by RSPO members. The RSPO formed the Assurance Task Force (ATF) in 2016. (Better late than never.)
Four years later, significant concerns about the RSPO’s assurance systems still remain. More widely the credibility and impact of third-party certification schemes is in doubt. The New York Declaration on Forests concluded in September 2019 that deforestation has accelerated not diminished, despite certification schemes.
In 2018, the RSPO adopted a new and improved Principles and Criteria (P&C) that includes provisions for ensuring no deforestation, no new planting on peat, the protection of human rights defenders, improved workers’ rights and better smallholder inclusion. All audits undertaken from November 2019 will be assessed for compliance with this new P&C 2018. In 2019, the RSPO also announced it would establish a permanent Assurance Standing Committee (ASC). These developments are a natural point at which to take stock and undertake an analysis of the performance of the RSPO’s systems to-date.
With that powerful admission firmly on the table, what did RSPO stand for prior to 2019? The producers and buyers throughout the supply chain were clearly duped. That or they were complicit in one of the most destructive green-washing schemes in history.
The Watchmen report raised a number of concerns around the RSPO’s complaints system including that it failed to properly address the complicity of auditors in non-compliances which led to complaints, that certification bodies were allowed to assess complaints for companies they had certified – a clear conflict of interest – and measures were not taken against auditors even when the culpability of auditors was established in the complaints.
One of the key shortcomings highlighted was RSPO’s inability to detect violations before considerable harm had occurred and its unwillingness to contemplate a system which proactively identifies violation through the its own processes.
As of October 2019, there were 38 open complaints in the RSPO system. The longest has been open nine and a half years. About one third have been open more for than three years. On average, it takes 700 days before complaints are closed. According to the RSPO, the most frequent complaints are on Free, Prior and Informed Consent (FPIC), HCV areas and certification bodies – the very same issues documented in the Watchmen report.
The failures raised back in both 2013 and 2015 still remain institutionalized. Many NGOs have raised continuing concerns about the RSPO’s complaints – Profundo provides
recent examples of such concerns, as do the case studies in this report. RSPO members quitting the RSPO rather than resolving complaints remains a problem and seems to prevent the RSPO from sanctioning members over complaints to minimize its risk of losing members. The RSPO adopted a resolution in 2018 to try and discourage members with unresolved complaints from avoiding their obligations by divesting or membership withdrawal. It is yet to be seen how well this can be implemented.
According to the Forest People:
The Roundtable on Sustainable Palm Oil (RSPO) accepted a complaint against Golden Agri-Resources (GAR), alleging numerous violations of Indonesian law and RSPO standards. Based on state-of-the-art GIS and satellite imagery, the complaint alleges that GAR is illegally operating oil palm plantations inside Indonesia’s protected Forest Zone. The complaint, lodged by Forest Peoples Programme and Elk Hills Research, cites recent bribery convictions of multiple GAR officials in Central Kalimantan as evidence that the company was both aware of these land-use violations and corruptly tried to cover its tracks. According to the complaint, over 75,000 hectares of GAR’s land appear to be being used for unlawful oil palm production, representing over 15% of GAR’s total plantation area.
FPP and Elk Hills Research have called on RSPO to investigate these serious violations of RSPO standards and to suspend the sustainability certificates of GAR’s operations.
“RSPO knew about this bribery case when it was first reported but took no action. The RSPO Complaints Panel has also delayed for years taking action on the numerous other human rights violations and land disputes by GAR that we have exposed in previous complaints but which remain unresolved” says Marcus Colchester, FPP’s Senior Policy Advisor.
“The RSPO is meant to ensure accountability but instead allows impunity. This must end,” said Colchester.
“For too long, Golden Agri has benefited financially from unsustainable and unethical practices, while using its RSPO membership to represent to investors and customers that it behaves sustainably and ethically,” said Brennan Bilberry, co-founder of Elk Hills Research. “The serious evidence of deforestation, bribery, and general lawlessness we have uncovered warrant quick action by the RSPO, so it can put an end to what appears to be GAR’s systemic misconduct. It is time for multinational consumer goods companies to make good on their sustainability commitments by re-examining their relationship with companies that contribute to deforestation and corruption.”
US investors interested in environmental, social, and governance (ESG) objectives funded the work by Elk Hills Research, which contributed to this complaint—the first of its magnitude.
“It’s time for investors who are serious about ESG to move from mere passive avoidance to more active engagement, either by demanding that problematic companies change their practices or, if necessary, by exposing flagrant violations of environmental and good-governance laws. By working to uncover wrongdoing like that alleged in our complaint, investors can ensure that the worst offenders suffer real consequences, which may be key to preventing corporate wrongdoing,” said Jamie Crooks, co-founder of Elk Hills Research.
Thanks to Forest People! I applaud your work.
With that said, the question remains, what does RSPO stand for today? In a complaint filed in 2020 by Forest People, it claims that RSPO is complicit in bribery schemes, cover-ups and overall mismanagement. So, why should the world believe them after 16 years of crimes against nature and humanity? One of the founders of the group is Paul Polman, the former CEO of Unilever. He has just been tapped to head a global effort against greenwashing. Please ask him to drain the swamp at RSPO. The group must be part of the solution. It can’t continue to help cover up the problem. Meanwhile, ask yourself if you really need Nutella, Girl Scout Cookies and other junk foods that are responsible for destroying vital ecosystems. Ask yourself if a biofuel is really a good thing if the “bio” means rainforest destruction. There is a better path forward than wholesale destruction and fraud. Mr. Polman, answers begin with the truth. I’m here to help.