Jakarta Globe, Nivell
Rayda, November 02, 2012
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Singapore.
The Roundtable on Sustainable Palm Oil has often been met with resistance,
suspicion and lack of government support in Indonesia since its establishment
in 2001. But former Indonesian Agriculture Minister Bungaran Saragih believes
this will change within five years.
“There are
[palm oil] companies that have been doing bad things for many years and are now
struggling to meet the criteria [set by the RSPO],” the former minister told
the Jakarta Globe on the sidelines of the 10th Annual Roundtable Meeting on
Sustainable Palm Oil in Singapore.
“The
criteria is basically the same [as stipulated by Indonesian laws] because they
are based on common sense. But it takes a change in mind-set and a change of
culture for some,” he said. “Right now we [Indonesians] haven’t reached that
tipping point yet but it takes time and we will get there.”
Bungaran
predicts that the way Indonesia’s palm oil companies do business will be greatly
transformed by 2015, when major consumer goods companies begin buying only
certified palm oil products.
The RSPO
has attracted several multinational consumer goods companies, such as Procter
& Gamble and Unilever, and retailers such as Wal-Mart and Carrefour, which
have all pledged to use only certified palm oil by 2015.
“Once that
happens, [Indonesian palm oil] companies will have no choice. I say in 2017 we
will see a lot more companies joining RSPO,” he said.
Cherie Tan,
Unilever’s global procurement director for renewables and smallholder
development, said her company was ahead of the curve by purchasing 100 percent
certified palm oil this year.
As of May,
only three million metric tons out of 25 million tons of palm oil produced in
Indonesia received RSPO certification, which means selling Indonesian palm oil
to multinational manufacturers like Unilever, which alone buys 3 percent of the
world’s palm oil, would be almost impossible.
Convincing
palm oil producers in Indonesia to acquire sustainability certification from
the RSPO has proven to be a daunting task, said the body’s vice president, Edi
Suhardi.
Edi, who is
also the head of sustainability at palm oil producer Agro Harapan Lestari, said
only 68 oil palm growers, processing and trading companies and users in
Indonesia were certified. And 14 of them, including Unilever, were
international companies operating in Indonesia.
“There is
some skepticism and suspicion from [Indonesian] business associations and the
government,” he said.
Desi
Kusumadewi, director of RSPO Indonesia, confirmed that some palm oil companies
were hesitant to get RSPO certification, with some even accusing the group of
acting on behalf of foreign agendas.
The
Indonesian government has been reluctant to recognize the environmental
standards set by the RSPO, which is used by many European buyers. Instead,
Indonesia created its own standard aided by the Indonesian Palm Oil Producers
Association (Gapki), which exited the RSPO last year after its members
expressed frustration at the tough environmental standards set.
President
Susilo Bambang Yudhoyono has defended uncertified palm oil companies, urging
developing countries to review restrictions on trade beyond tariff walls at the
World Export Development Forum in Jakarta last month.
Desi said
since the market was turning its attention to sustainable palm oil, Indonesian
palm oil companies would soon have little choice but to adopt RSPO standards.
“There are
some [companies] that are hesitant but there are those that have already met
the criteria but lack documentation,” she said.
Then there
are the smallholders — small, independent palm-oil growers — who cannot afford
to pay auditing firms, a key requirement for an RSPO certification. Desi said
the RSPO has plans for the smallholders, who make up around 38 percent of
Indonesia’s palm oil output.
“The RSPO
has earmarked 10 percent of its income to help these smallholders acquire
certifications. We are now deliberating the exact procedures and requirements,
but I can tell you now that we won’t cover 100 percent of the [certification]
costs to give them a sense of ownership,” she said.
Desi said
she hoped that most of the earmarked money, which had already reached $951,000,
would go to Indonesian smallholders.
“It’s a
worldwide amount but as the largest CSPO producer we should get a significant
portion of it,” she said.
Bungaran
said Indonesia was moving in the right direction to meet the world’s need for
sustainable palm oil. “Even today we have major palm oil companies joining RSPO
and we are the number one producer of sustainable palm oil.”
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