A group of major consumer goods companies and investors have publicly called on the Roundtable on Responsible Palm Oil (RSPO) to strengthen its standards following mounting criticism of the multi-stakeholder platform. This has left the RSPO pondering whether it can afford to continue to move at a pace that keeps less ambitious companies engaged or whether it should allow more progressive members to set the agenda, Ben Cooper reports.
It is generally held that multi-stakeholder partnerships and collaborations are an effective way of tackling tough sustainability issues. Such platforms have notable strengths, not least in benefiting from pooled experience and fostering discussion and consensus-building.
Go deeper with GlobalData
Their almost universally accepted weakness, however, is they can be glacially slow in driving progress.
The Roundtable on Responsible Palm Oil (RSPO) was, in its early days, hailed as a model of inter-stakeholder collaboration but has faced mounting criticism as the years have gone by. In more recent times, campaigners have become increasingly critical of the programme, suggesting its standards are not sufficiently stringent and its enforcement and auditing processes are flawed. Some have branded the programme "greenwash".
To a degree such criticism from activists is not uncommon and, perhaps telling its own story, the RSPO had become somewhat inured to it. However, the volley of criticism the the organisation received last week from a group of powerful companies and investors in an open letter to RSPO secretary general Datuk Darrel Webber last week took the debate over the efficacy of the body to quite another level.
The letter, which includes prominent food companies such as ConAgra Foods, General Mills, PepsiCo, Mars Inc and Kellogg, along with retailers such as Walmart, Carrefour and Albertstons-Safeway among its signatories, acknowledges the strengths of the RSPO as a programme, underlining the letter represents criticism and a push for reform from within the organisation, by virtue of the fact the RSPO is a multi-stakeholder organisation. These are companies that have led and actively participated in the initiative.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataConstructive criticism
The letter says the RSPO is "uniquely positioned" to "support, promote and enforce" the widespread uptake of responsible and sustainable production practices across the palm oil industry but the food companies and retailers, along with the numerous investor groups which also signed the letter, wish to strengthen the initiative to ensure palm oil "is produced in a manner that does not degrade the environment or result in violations of human rights".
Stating the RSPO does not provide protection in regard to "some of the most critical externalities of palm oil production", the letter calls for an accelerated review of the Principles & Criteria, leading to the adoption and implementation in 2016 of some key requirements, namely to conserve high carbon stock areas; to protect peatlands, regardless of depth; to report on greenhouse gas emissions and reduction targets; and ensure palm oil originates from known sources. This would be two years ahead of the next scheduled review.
The letter also calls on the RSPO to "strengthen transparency, auditing and enforcement among member companies", and specifically to "improve quality control measures for high conservation value and human rights assessments to ensure objective, rigorous auditing, verification and grievance processes".
Speaking to just-food, Mark Mills, partner at Generation Investment Management, a firm that considers sustainability in its investment, reinforced the positive emphasis of the intervention. The RSPO has, Mills says, undertaken "significant work" to define standards for the sustainable production of palm oil, and provided an "important benchmark for the Sustainable Palm Oil Investor Working Group as we engage with buyers, growers and traders in the palm oil industry to work towards the development of a more sustainable palm oil industry".
Mills continues: "In recent times we have been pleased to see commitments made by leading growers to No Deforestation, No Peat and No Human Rights exploitation, which go beyond the current standards of the RSPO. Hence we have called upon the RSPO to hasten the process of strengthening its standards."
The business voice
Erinch Sahan, private sector policy advisor at Oxfam, which sits on the governing board of the RSPO, sees the fact last week's letter has come from a coalition from the corporate side of the initiative as critical to the intervention. "It is incredibly important to have that business force calling for stronger standards across the board on any commodity," Sahan tells just-food. "It just makes immeasurably different impacts compared to an Oxfam coming out and calling for something. We need that business voice."
In particular, he adds, such criticism encourages origin country governments to be stronger, and given the need for strong governance and leadership in countries where palm oil production has led and is still leading to forestation this is a vitally important factor. "We need higher standards because the biggest barrier we face is governments or regulators saying an initiative it is going to be anti-business, it's going to push away trade if we increase standards," Sahan continues.
Rather than viewing the letter as criticism of the RSPO as a body, as it might be if it had come from an external group, Sahan sees the letter as the RSPO using its "convening power to push for stronger standards". The organisation's "ability to convene the business voice is the right direction for it to go in".
Sahan also points to the fact Oxfam itself, for example in its Standing on the Sidelines report last year, has been critical of RSPO members regarding human rights and deforestation. "We've highlighted some RSPO members in the past who have been weak on lands rights issues and deforestation issues".
This powerful coalition cannot be ignored and their open discontent with the RSPO standards and enforcement places the platform at something of a crossroads.
Lowest common denominator
Sahan concedes in "any initiative there is going to be an element of lowest common denominator", and this is the challenge that coalitions such as the RSPO always face. They require the "right breadth" of participants to gain widespread progress but need to be sufficiently "selective" to ensure a meaningful level of action on the part of the participants. Above all, an organisation has to "stop the laggards from impeding progress", and in that context Sahan feels it is appropriate for a "group of the ambitious" to push for higher standards.
Mills agrees it is the classic dilemma for multi-stakeholder groups such as the RSPO, adding that within the way such coalitions function there should "and does appear to be" a way that allows "for pioneers to set new standards which will get picked up by other organisations that may have slower decision making processes".
In the case of the RSPO, the mechanic for achieving some sort of compromise, or twin-track, way of progressing is the introduction of "RSPO+", a voluntary addendum which would allow companies to adhere to a set of higher standards, covering the areas raised in the letter, such as greater protection of peatlands and land rights.
The idea behind RSPO+, a spokesperson for the RSPO told just-food, is to promote the work of those members who wish to move faster on sustainability standards while "making sure we keep everyone on board and travel together towards market transformation". In that sense, it is very much in keeping with one of the primary imperatives of an multi-stakeholder initiative, namely to build and preserve consensus. However, in this instance it is doing so by effectively dividing the organisation's governing standards into two parts which could be seen in itself to be challenging that consensus. The RSPO+ concept is currently being considered by the RSPO board.
Ignacio Gavilan, sustainability director at the Consumer Goods Forum (CGF), which includes in its retailer and manufacturer membership many of the signatories to the letter, believes the organisation is in a "difficult position" with some members wishing to move faster than others. The spirit of the letter, he believes, was to ensure the RSPO does not get stuck in a "comfort zone" and he believes the RSPO needs to find a way forward which "reflects the most progressive companies and helps the learners to step up".
While there appears to be a feeling among a range of stakeholders and observers RSPO+ could provide such a way forward, it may only be a temporary fix. Speaking with just-food last week, Lucia von Reusner, shareholder advocate at Green Century Capital Management, another signatory to the letter, said the higher standards "ultimately need to be incorporated into the core principles and criteria applicable to all member companies, in order for the RSPO to avoid confusion and logistical complexity in the marketplace and supply chain".
There is an analogy with brand marketing. The presence of higher standards – a premium offering – will ultimately leave some consumers reflecting the product they have been consuming leaves something to be desired. Of course, the objective is always to trade consumers up to the premium level. In that context, the RSPO+ needs to be a mechanic to equalise the RSPO up to the higher standards.
This article is part of just-food's management briefing on the latest developments in the sustainability of supply chains for four key commodities: palm oil, cocoa, soy and sugar.
For more on why there has been a step change in industry engagement on cocoa, click here.
