Time to get tough on environmental crime: legality in palm oil is essential

The European Parliament has put legality high on the agenda in its latest resolution on forests and sustainable commodities such as palm oil.

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Forest land cleared for palm oil, Indonesia (c) EIAimage

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With both the Roundtable on Sustainable Palm Oil (RSPO) and the Indonesian Sustainable Pam Oil (ISPO) certification schemes undergoing reform, it’s time for them to get tough on illegality in the palm oil sector.

Last week, the European Parliament again called for European Union (EU) action to ensure legal and sustainable commodities, inclusive of palm oil, in an adopted resolution.

palm fruits

Oil palm fruits

Illegal land conversion, land-grabbing and deforestation are core justifications for such action. Previous studies by the European Commission have highlighted illegality as a major concern, with half of all commodities exported into the global market from illegally cleared forests and the EU being the largest net importer of deforestation.

A report from the United Nations Environment Programme in July stressed that environmental crime is a “serious threat to peace and sustainable development” but given low priority, despite its value as a crime estimated at hundreds of billions of dollars each year.

The EU is already fighting illegal logging in the timber industry through its Forest Law Enforcement Governance and Trade (FLEGT) Action Plan but action is also urgently needed to combat illegal activities in other sectors such as palm oil.

Watchmen coverThe oil palm sector is riddled with crime and, as our work has shown, even certified oil palm plantations may not have been legally compliant. Our report Who Watches the Watchmen? exposed RSPO auditors for not flagging up uncertainties in legal compliance in oil palm concessions.

This loophole is possible due to certification schemes permitting illegal concessions to be certified if they ‘legalise’ themselves just before becoming certified. Often companies operate and even acquire plantations illegally but then retrospectively acquire the required legal permits before subjecting themselves to an RSPO audit.

In Papua, Indonesia, the company PT Nabire Baru (PT NB), owned by Goodhope Asia Holdings, started clearing years before it had obtained the necessary permits but then subsequently obtained them.

EIA raised serious concerns about PT NB’s illegality to the RSPO and the company is now subject to a RSPO complaint. However, the RSPO is still deliberating on this case and is refusing to share with us, as the complainant, its independent assessment on legal compliance at PT NB.

Elsewhere in Papua, PT Bio Inti Agrindo (PT BIA), owned by the South Korean conglomerate POSCO Daewoo, has recently become a member of the RSPO despite being accused of clearing large areas of land using fires, an illegal practice in Indonesia. Again, the RSPO risks legitimising criminality by certifying it as sustainable because it only requires compliance with all applicable laws and regulations at the time of certification.

Oil palm plantation on deforested land in Papua, Indonesia (c) EIAimage

Oil palm plantation on deforested land in Papua, Indonesia (c) EIAimage

Similarly, the Indonesian Sustainable Palm Oil (ISPO) certification scheme is marred by legality issues and companies are ISPO-certified even though they have not obtained the correct permits in the right order. The legality of land continues to be the biggest issue for the ISPO and a multitude of companies have not gained certification because of it, even though ISPO certification became a requirement in 2014.

This cannot continue. Legality needs to be addressed and is core to sustainability.

While the ISPO reform process is in danger of failing to improve legal compliance in Indonesia, the RSPO’s review of its Principles and Criteria (P&C), due to be finalised in November 2018, presents an opportunity for it to better exclude crime.

To seize this opportunity, our Forests campaigners have submitted recommendations to the RSPO’s public consultation on its P&C review, urging amendments to the text of RSPO P&C Criterion 2.1 which focuses on legal compliance.

Specifically, we have recommended that the text of Criterion 2.1 changes to: “There has been compliance with all applicable local, national and ratified international laws and regulations during permit application, acquisition and operation” as opposed to “There is…”. Without this basic change, it seems inevitable that the RSPO will continue to certify illegality as sustainable.

The resolution adopted by the European Parliament sends a clear signal to the European Commission to act on illegal and unsustainable commodities and provides a clear incentive for the RSPO to exclude crime from its production base, alongside genuinely ensuring no deforestation.

We urge the RSPO (as well as Proforest and others involved in the P&C review process) to amend Criterion 2.1 as a crucial reform in enabling RSPO audits to assess legal compliance.

Cutting out crime, as well as deforestation, will be essential if the RSPO is to retain any credibility and market access.