Palm oil's green body comes under fire from activists

By Emily Chow

KUALA LUMPUR, Nov 7 (Reuters) - Some activist groups are withdrawing support for the palm oil body that provides sustainability certificates for the industry, saying it is biased towards producers and its complaints panel is flawed.

Aidenvironment, an Amsterdam-based green group, could become the latest to cut ties with the Roundtable on Sustainable Palm Oil (RSPO) over what it calls poor handling of a complaint against major palm producer IOI Group (IOIB.KL) .

RSPO -- a body of palm producers, consu

mer companies, and activist groups -- has long faced criticism for weak enforcement standards. Some faith was restored earlier this year when RSPO suspended IOI's certificates, which then dissipated when RSPO revoked the suspension four months later.

A withdrawal by green groups, long seen as the conscience of the RSPO, could undermine the credibility of the industry body, especially for consumer manufacturing companies under pressure globally to ensure they have a sustainable supply chain.

It would also create a larger disparity at the RSPO's already skewed roundtable -- NGOs make up less than 2 percent of the RSPO's 3,080 members worldwide.

"We're going to have a meeting with the RSPO," said Eric Wakker, senior consultant at Aidenvironment Asia, who wants the watchdog to publicly admit they've made "serious mistakes" with the IOI case. "If the RSPO is not going to come up with a real commitment to change, we're going to throw in our membership."

"The RSPO secretariat is more interested in selling certified palm oil than they are in securing the credibility of their sustainability claim," Wakker told Reuters

RSPO is focused on its processes and is not going to make decisions based on sentiment, said Stefano Savi, global outreach and engagement director of the RSPO.

"Overall, the number of NGOs that continue or have started supporting RSPO in the past year is far greater than the number of those who have unfortunately decided to disengage from the process," he told Reuters.

IOI Group did not immediately respond to a request for comment.

Aidenvironment's threat to quit comes as RSPO members and industry players began gathering in Bangkok on Monday for the group's annual roundtable conference meeting this week.

SOAP TO SOUP

Palm oil is the most widely used edible oil in the world, found in everything from margarine to cookies and from soap to soups. One of the cheapest edible oils on the market, it is extracted from the pulp of the palm fruit that drops from trees in tropical plantations, most of them in Malaysia and Indonesia.

Between 1990 and 2010, up to 3.5 million hectares of forests were cut down for palm oil plantations in Indonesia, Malaysia and Papua New Guinea, according to the World Wildlife Fund (WWF). That's a land area the size of Germany.

Palm oil plantations operating in remote rainforests have come under unprecedented scrutiny the past few years, not only from the mounting influence of activists, but from their customers as well.
Certification of environmentally sound behavior is required by some major palm oil buyers in the West, including major food and candy makers such as Nestle (NESN.S) , Unilever (ULVR.L) , Mars and Kellogg (K.N) .

RSPO initially suspended IOI's certificates in April based on an AidEnviornment complaint that the company had illegally chopped down rainforests in the Indonesian province of West Kalimantan and planted oil palms on peatlands, which are highly flammable when drained. Peatland fires across Indonesia in recent years have led to a massive haze of dangerous pollution across large parts of Southeast Asia.

Green groups who had hailed the RSPO move were disappointed when the body lifted the suspension before IOI's proposal to improve its operations had been verified on the ground. Leading global palm oil buyers had yet to resume buying from IOI after the April suspension.

Australian NGO Palm Oil Investigations (POI), which is not an RSPO member, has stopped encouraging consumer companies to seek RSPO certification, after the IOI reversal.

"After IOI was reinstated, we couldn't push anyone to that certification anymore," said POI founder Lorinda Jane. "If they are going to certify destruction, even just one company alone, it tars every producer with the same brush."

Swiss-based NGO PanEco resigned as an RSPO member in June, citing failures in its complaints panel, monitoring and audit
process.