The Palm Scribe

The New Proposed RSPO Standard for Smallholders in a Nutshell

BANGKOK – A new sustainability certification standard of the Roundtable on Sustainable Palm Oil (RSPO), to be soon put up for a vote by members, is giving times for smallholders to gradually work toward full compliance as well as provide them with incentives to join from the earliest stage of commitment, the head of organization’s Smallholder program said during the RT17 on Tuesday (5/11).

Addressing journalists on the sideline of the opening day of RT17, the 17th Annual Roundtable Conference on Sustainable Palm Oil here, Ashwin Selvaraj said that the new standard was to simplify the standard and make it more inclusive. The previous standard under the RSPO Principles and Criteria treated smallholders at the same level as big companies which and many more resources to comply.

“In the case of smallholders that does not work, because they cannot. So, you have this phased approach toward full compliance. That is why, in the new standard, we have adopted a phased approach spanning a space of three years leading to full compliance,” Selvaraj said.

The first stage, called eligibility phase, was one where an awareness about the RSPO and sustainability certification is instilled into the smallholders, as the smallholders can only apply for certification in a group, he said. During this phase, the smallholders also had to commit to following some sustainability practices, including among others not employing child labor. He added that the second stage, called Milestone A, was an interim phase where smallholders are provided with the necessary knowledge and training to be able to fully implement the standard at the Milestone B stage.

“But talking about sustainability, you also have to talk about incentives, so what we have done with the new standard is to try to develop a model in which they can get access to incentives from the beginning,” Selvaraj said.

Unlike big companies that had the resources, smallholders needed incentives and investment to cover the cost of getting sustainable.

“Because it is not just incentives, they also need investment as it is also an investment for them to move towards compliance …that is why the incentive model that we develop is going to be an incentive that will motivate them to come into the system but will also close those financial gaps that they have to move towards full compliance.”

He cited the need for the smallholders to provide workers with protective equipment which had to be bought but were also expensive.

“Starting from the eligibility phase, the moment they commit themselves to sustainability and greater awareness, they can already sell a certain percentage of their volume as credits through the book and claim trading model,” he said.

Under the RSPO system, there are two trading models recognize; physical, where the actual fruits are purchased and credits, where the buyers or users pay a certain amount of “credit” for sustainable palm oil production.

Selvaraj said that applying as the individual would not make economic sense because of the huge cost involved, applying as a group will not only spread the cost but members would also be empowered and learn about organizational skills. Regardless of the size of the groups, they need to meet some requirements, such as to how the group functions, how it would be former, what is the group’s constitution, how is the decision made in the group, what is the responsibility of the group manager and how are the resources and benefits shared between the members.

The vote on the new standard is scheduled for Wednesday, after the closure of the Roundtable Conference. Smallholders in Indonesia, according to RSPO Co-Chair Carl Bek-Nielsen, accounted for some 45 percent of the palm oil production.

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