Sustainable Palm Oil May 2014

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Overview

RSPO – Who are they

CSPO – What is it

Different CSPO models

Social impacts

Environmental impacts

Who are the drivers of change

What are Companies and Countries doing

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RSPO – Who Are They

• In 2001, WWF (World Wildlife Fund) commenced exploring the possibilities for a Roundtable on

Sustainable Palm Oil.

• Founding members were made up of Aarhus United UK Ltd, Migros (largest Swiss retailer), Malaysian Palm Oil Association, Unilever and WWF.

• These organisations prepared the foundation for the organisational and governance structure for the formation of the RSPO.

• The inaugural meeting of the Roundtable took place in Kuala Lumpur, Malaysia, August 2003 and was attended by 200 participants from 16 countries. The key output from this meeting was the adoption of the Statement of Intent (SOI) which is a non-legally binding expression of support for the Roundtable process.

• On 8 April 2004, the "Roundtable on Sustainable Palm Oil (RSPO)," was formally established under the Swiss Civil Code with a governance structure that ensures fair representation of all stakeholders throughout the entire supply chain.

• The seat of the association is in Zurich, Switzerland, the Secretariat is based in Kuala Lumpur with a RSPO Liaison office in Jakarta.

www.rspo.org

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RSPO – Vision and Mission

Vision RSPO will transform markets to make sustainable palm oil the norm

Mission

To advance the production, procurement, finance and use of sustainable palm oil products;

To develop, implement, verify, assure and periodically review credible global standards for the entire supply chain of sustainable palm oil;

To monitor and evaluate the economic, environmental and social impacts of the uptake of sustainable palm oil in the market

To engage and commit all stakeholders throughout the supply chain, including governments and consumers.

The supply chain includes ecosystems, communities, growers, traders, processors, consumer goods manufacturers, retailers, financial institutions, civil society.

www.rspo.org

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RSPO – Why RSPO Certification

• The Roundtable on Sustainable Palm Oil (RSPO) is a global, multi-stakeholder initiative on sustainable palm oil.

• Members and participants in its activities come from many different backgrounds and include environmental and social NGOs, banks and investors, growers, processors, manufacturers and retailers of palm oil products.

• The principal objective of the RSPO is “to promote the growth and use of sustainable palm oil through co-operation within the supply chain and open dialogue between its stakeholders.”

www.rspo.org

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CSPO – What is it?Certified Sustainable Palm Oil Audited! Supply Chain Certification

• Palm oil produced by a mill and it’s supply base• Audited to the RSPO Principles and Criteria • Compliant with the criteria set out in the RSPO Certification

Systems document.

CSPO Certification covers many production and logistical stages between the grower and the final product. Any individual batch of palm and palm kernel oil can be traded through one of four supply chain models that are approved by RSPO:

• Identity Preserved (IP) • Segregated (SG) • Mass Balance (MB) • Book and Claim (B&C).

www.rspo.org

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Book and Claim – Green Palm

• Book and Claim system– Allows for people wanting to make a supporting claim to do so.– On line trading of total PO and PKO volumes. – RSPO Members and comply with the RSPO standards– http://www.greenpalm.org/ $2.50pt PO $45pt PKO

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Mass Balance supply chain

• Mass Balance system– Allows for mixing of RSPO and conventional PO and PKO – Reconciliation of quantity purchased and quantity sold – Supply Chain Certified to maintain integrity of volumes traded– RSPO Members and comply with the RSPO standards

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Segregated supply chain

• Segregated system– Allows for people use Segregated PO and PKO– Allows for multiple plants to supply through the supply chain– RSPO Members and comply with the RSPO standards

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Identity Preserved (IP) supply chain

• Identity Preserved (IP)– Allows traceability back to plantation and it’s supply base– Must be kept separate from all other PO and PKO including SG– RSPO Member and comply with the RSPO standards

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RSPO Small Business Certification

Module G – RSPO Small Business Certification Scheme G.1 Definition G.1.1 Small business certification offers an option for RSPO Supply Chain Certification whereby eligible supply chain operators may achieve certification under a system of reduced auditing requirements designed to minimise the cost for these organizations.

G.2 Membership requirements G.2.1 Processors must: • Obtain legal ownership and physically handle less than 50 MT of palm oil and/or palm kernel oil per year • Operate from a single site • Use less than 3 palm oil inputs.

G.2.2 Distributors must: • Obtain legal ownership and physically handle product in packaged form • Not remove primary packaging • Operate from a single site.

G.3 Supply chain requirements G.3.1 The organization shall ensure that relevant supply chain requirements are met (Module A, B or C).

G.4 Operational requirements G.4.1 The organization shall ensure that: • Its location remains the same • The amount of inputs and total tonnage do not exceed criteria limits • Procedures remain the same • Products remain the same • Trademark does not vary.

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Social Impacts

What are the key social issues of conventional Palm sourcing?

• Damaging for the communities that depend upon these forests for their livelihoods.

• Serious conflicts can arise when palm oil companies disregard the rights of local communities.

• Social impacts of palm oil production can include:

– Land grabs

– Loss of livelihoods

– Social conflict

– Forced migration

• The palm oil industry is vital to the economies of Indonesia and Malaysia, calling a halt on

production is not an option.

• The challenge, therefore, is to ensure that future expansion of plantations does not occur at the

expense of natural ecosystems.

• An estimated 1.5 million small farmers grow the crop in Indonesia, along with about 500,000

people directly employed in the sector in Malaysia, plus those connected with related industries.

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Environmental Impacts

What are the key environmental issues of conventional Palm sourcing?

The serious environmental challenges associated with palm oil production include:• Biodiversity  loss, including loss of rare and

endangered species• Pollution of soil, air, and water• Soil erosion• Greenhouse gas (GHG) emissions and climate change• Loss of key ecosystems

Borneo Indonesia

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Who are the Drivers of Change

• The face of deforestation

http://www.youtube.com/watch?v=1BCA8dQfGi0

Green Peace and other NGO’s

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Media

• The Sydney Morning Herald

• Environment• Stopping the chainsaws• Environment National • Date• March 29, 2014

• Michael Bachelard• Indonesia correspondent for Fairfax Media

• Determined Australian forester Scott Poynton is employing unusual methods in his crusade to get the world's loggers to clean up their act.

• The bad oil: A cleared forest in Indonesia's Kalimantan province in preparation for development as a palm-oil plantation. Photo: AF

www.saynotopalmoil.com

Multiple NGO’s and other media coverage

www.wwf.org.au

www.orangutan.org.au

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What are Companies and Countries doing

• Our sustainable sourcing journey• Unsustainable cultivation of palm oil is contributing to deforestation. Sustainable, traceable sourcing

has the potential to help stop global warming, which is a by-product of the deforestation of large tracts of forestland. That is why, in 2010, we committed to sourcing 100% of our palm oil from certified, sustainable sources by 2015. We are proud that we achieved this target three years ahead of schedule, primarily through the purchase of GreenPalm certificates.

• In 2012, we pledged a landmark target to purchase all palm oil sustainably from certified, traceable sources by 2020. Although this is a hugely complex task because of the enormous volumes we purchase, we are on track to meeting this goal. Our new processing plant in Sei Mangke, Indonesia, once operational, will source palm oil from known and certified sources for our global use. This plant represents a $130 million investment.

• We will continue to source 100% RSPO mass-balance certified palm oil, but we are now strengthening our commitment as follows to ensure this palm oil is genuinely sustainable:

• We will develop a fully traceable pipeline back to known mills by year-end 2014. We will then work with the Forest Trust (TFT) to ensure these mills can verify that their fresh-fruit bunch supply, including supply from smallholders, meets our sourcing charter. We require all suppliers to comply with our charter by year-end 2015, or to have plans in place by year-end 2015 to ensure compliance.

• We will only work with palm oil suppliers that share our values and our commitment to transforming the palm oil supply chain, and we will require that by the end of 2014 they confirm their commitment to comply with the above sourcing charter.

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What are Companies and Countries doing

UK Consumption of Sustainable Palm Oil • What progress has been made? • The amounts of RSPO certified segregated and mass balance palm oil have increased steadily each

year. • There has been a slight decrease in the amount of certified oil supported through purchase of

Greenpalm book and claim certificates. • Overall, it is clear that the UK is moving in the right direction, with a steady increase in consumption

of certified sustainable palm oil. • Who is involved? • The organisations who have signed up to the statement represent Government, oil processors and distributors, food and

drink manufacturers, retailers, animal feed manufacturers, contract catering and hospitality sector, renewable energy sector, cleaning products industry, speciality chemicals sector and WWF.

• A progress statement from each of the organisations involved is included below. The organisations have started from different places and they face different challenges. Some are making rapid progress, and others are finding the transition more difficult. 3

• This year three new organisations have signed up to the UK statement. These are the British and Irish Association of Zoos and Aquariums (BIAZA), the Chilled Food Association (CFA), and the Zoological Society of London. Their statements are also below.

• Next steps • There is still plenty to be done. Areas of focus for further action on sustainable palm oil are the

hospitality sector, animal feed, small and medium sized enterprises and palm oil derivatives.

• https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/259839/pb14061-palm-oil-progress-report-131120.pdf

• AUSTRALIAN Truth in labelling Act– More swift action if endorsed

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What are Companies and Countries doing

• Melbourne Zoo• These ‘people of the forest’, so remarkably like us, meet us at their level in a carefully designed

enclosure that makes for a satisfying encounter on both sides of the glass.• While this peaceable family group lives in safety, Sumatran Orang-utans in the wild are under great

threat.  They are classed as critically endangered, with numbers in the wild rapidly falling. Numbers have dropped by close to 95% in the last 100 years and there may now be fewer than 3500 in the wild. Their rainforest habitat is being rapidly destroyed to make way for logging and agriculture, particularly palm oil plantations. They are also hunted for the pet trade and for meat.

• Breeding programs in captivity, such as at Melbourne Zoo, are helping to ensure that the species doesn’t disappear. Our hope is that worldwide efforts to rein in destruction of orang-utan rainforest habitats will succeed. You can be a part of this growing international effort by supporting the ‘Don’t Palm Us Off’ campaign.

• Orang-utans are the largest tree-living mammals in the world. There are two species: the Borneo Orang-utan (Pongo pygmaeus) and the Sumatran Orang-utan (Pongo abelli). The Sumatran Orang-utan has a narrower face and longer beard than the Borneo, which is darker in colour.

• Sumatran Orang-utans are about 1.25–1.5 metres tall. Adult males weigh up to 90kg, and females up to 50kg. 

• Orang-utans are largely solitary, unlike the other great apes, and spend much of their time foraging for fruit high up in the canopy of the rainforest. They rarely come to the ground and will build nests out of leaves and branches each night in the treetops.

Nestlé Australia is using sustainable palm oil!Great news! Thanks to the thousands of emails being sent to companies through the Don’t Palm Us Off campaign, all Nestlé Australia chocolate made in Australia now contains 100% Certified Sustainable Palm Oil (CSPO).

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RSPO – Become a member

• Join on line at www.rspo.org• Board determine the fees applicable

to applicants • Parent company membership• 668 companies and over 1,300

facilities approved globaly

www.rspo.org

• Statutes and Bylaws• Code of Conduct

– Affiliated and Ordinary members– Supply Chain members

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How to get involved

www.rspo.org