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behind this increasing interest in RSPO-certified palm oil is the current debate on
biofuel-induced deforestation in Southeast Asia and its accompanying impacts (i.e.,
biodiversity loss, GHG emissions). The CEO of a large palm oil production company referred to this social pressure by implying that “environmentalists are so
obsessed with palm oil production that they forgot the illegal timber industry, which
still is the main driver of deforestation”.
The adoption of the RSPO standards can produce a series of environmental and
social benefits both locally and globally. Compliance with the RSPO standard
implies the adoption of certain socially and ecologically responsible practices.
Some of these practices can promote environmental quality and subsequently
enhance the provision of certain ecosystem services. Additionally RSPO-certified
firms are required to monitor and document regularly their performance. Such
activities usually entail higher production costs. In fact, managing a RSPO-certified
plantation can cost RMM 20/ha/yearr. (USD 6.3/ha/year) more than a conventional
farm. Despite this interest the market does not recognize RSPO-certified palm oil
with a good premium (just USD 5–8/ton, with CPO prices hovering around USD
800/ton).
At the time of the survey, palm oil biodiesel production was a new business
option, and shifting to it was not always a feasible investment strategy. For example,
a large palm oil producer in Bohor (Malaysia), with decades of experience in the
industry, had laid careful plans to commence biodiesel production. However when
the production was about to start, the company encountered problems that mainly
stemmed from European concerns over potential “food vs. fuel” conflicts, as well as
the decreasing petroleum prices and the increasing CPO prices (July 2010). In a
way they were “forced” to halt their biodiesel investment plans fearing that their
venture into biofuels might hurt their well-establish business in the food sector.
Even though they were considering selling the biofuel conversion plant, they were
also considering obtaining RSPO certification for some of their plantations in order
to guarantee the good image of the company. In fact the adoption of RSPO certification is seen by several companies as a means of improving their image and as a
prerequisite to secure a competitive advantage in the EU, the USA, and Japanese
markets, whether for food or biodiesel production.
With these things in mind, the main question that remains is: will RSPO certification, in its current format, be enough to guarantee palm oil sustainability in the
long run? In our view there are three main reasons why this will become more difficult in the future.
First of all, a large portion of the Malaysian/Indonesian palm oil exports goes
(and will go) to China and India, two countries that have a lax approach toward
environmental standards. Secondly, as biodiversity loss and climate change have
become the most dominant environmental concerns in the palm oil sustainability
discourse, the RSPO will be under increasing pressure to design more effective
strategies to tackle these issues. However as the results of our survey have shown,
biodiversity loss and climate change are the two impacts with the most polarized
perceptions regarding the extent to which the sector can tackle them in a costeffective manner. If the RSPO adopts standards that are not cost-effective, then palm
10 Stakeholders’ Perceptions of Ecosystem Services and Human Well-Being Impacts…
behind this increasing interest in RSPO-certified palm oil is the current debate on
biofuel-induced deforestation in Southeast Asia and its accompanying impacts (i.e.,
biodiversity loss, GHG emissions). The CEO of a large palm oil production company referred to this social pressure by implying that “environmentalists are so
obsessed with palm oil production that they forgot the illegal timber industry, which
still is the main driver of deforestation”.
The adoption of the RSPO standards can produce a series of environmental and
social benefits both locally and globally. Compliance with the RSPO standard
implies the adoption of certain socially and ecologically responsible practices.
Some of these practices can promote environmental quality and subsequently
enhance the provision of certain ecosystem services. Additionally RSPO-certified
firms are required to monitor and document regularly their performance. Such
activities usually entail higher production costs. In fact, managing a RSPO-certified
plantation can cost RMM 20/ha/yearr. (USD 6.3/ha/year) more than a conventional
farm. Despite this interest the market does not recognize RSPO-certified palm oil
with a good premium (just USD 5–8/ton, with CPO prices hovering around USD
800/ton).
At the time of the survey, palm oil biodiesel production was a new business
option, and shifting to it was not always a feasible investment strategy. For example,
a large palm oil producer in Bohor (Malaysia), with decades of experience in the
industry, had laid careful plans to commence biodiesel production. However when
the production was about to start, the company encountered problems that mainly
stemmed from European concerns over potential “food vs. fuel” conflicts, as well as
the decreasing petroleum prices and the increasing CPO prices (July 2010). In a
way they were “forced” to halt their biodiesel investment plans fearing that their
venture into biofuels might hurt their well-establish business in the food sector.
Even though they were considering selling the biofuel conversion plant, they were
also considering obtaining RSPO certification for some of their plantations in order
to guarantee the good image of the company. In fact the adoption of RSPO certification is seen by several companies as a means of improving their image and as a
prerequisite to secure a competitive advantage in the EU, the USA, and Japanese
markets, whether for food or biodiesel production.
With these things in mind, the main question that remains is: will RSPO certification, in its current format, be enough to guarantee palm oil sustainability in the
long run? In our view there are three main reasons why this will become more difficult in the future.
First of all, a large portion of the Malaysian/Indonesian palm oil exports goes
(and will go) to China and India, two countries that have a lax approach toward
environmental standards. Secondly, as biodiversity loss and climate change have
become the most dominant environmental concerns in the palm oil sustainability
discourse, the RSPO will be under increasing pressure to design more effective
strategies to tackle these issues. However as the results of our survey have shown,
biodiversity loss and climate change are the two impacts with the most polarized
perceptions regarding the extent to which the sector can tackle them in a costeffective manner. If the RSPO adopts standards that are not cost-effective, then palm
10 Stakeholders’ Perceptions of Ecosystem Services and Human Well-Being Impacts…