New palm oil standards raise deforestation concerns

In November, updated rules governing the production of sustainable-certified palm oil were adopted following a vote at the annual conference of the Roundtable on Sustainable Palm Oil (RSPO), in Bangkok.

The RSPO was set up in 2004 by a group of NGOs, including WWF, alongside companies in the palm oil supply chain. The RSPO’s certification system includes rules to prevent deforestation, restrict pesticide use and protect the rights of Indigenous peoples, local communities and workers. It currently certifies around 20% of the global palm oil market.

Many financial institutions and companies use this certification to support internal policies that are aimed at reducing or eliminating deforestation from their supply chains. The RSPO’s Principles and Criteria document is updated every five years, with a two-year consultation period followed by a vote by all members.   

Under the latest iteration, companies will now be required to identify existing and potential human rights impacts in their operations and in those of their direct suppliers. Companies will then develop action plans to address those impacts. Meanwhile, a standard covering smallholders (those whose growing area is 50 hectares or less, which is around 40% of palm oil suppliers globally) has been strengthened to make it easier for them to gain certification and access new markets.

Palm oil mills and growers must now report their water consumption and withdrawal, in a bid to address potential future water scarcity issues caused by climate change. And a list of restricted pesticides has been expanded to include those that harm human health, alongside those already limited due to environmental harms. The revised rules will come into force 12 months after their adoption.

Deforestation definition

However, deforestation campaigners at Greenpeace and the Rainforest Action Network (RAN) say the RSPO has weakened the section of its standard that concerns deforestation.

When the rules were last updated in 2018, they were widely welcomed by campaigners for strengthening protections against deforestation. They included prohibitions on the planting of oil palm on secondary forests (in addition to primary), and on peatlands, regardless of depth.

However, the latest version of the rules has introduced a change to the definition of high carbon stock (HCS) forests, which plantation owners must apply when deciding what land they can develop. Greenpeace and RAN argue this change has weakened protections against deforestation.

HCS forests are natural forests that need to be protected. Criteria for HCS forests were introduced to the RSPO standard in 2013 and strengthened in 2018. The standard defines them as: “Forests that have been identified using the High Carbon Stock Approach (HCSA) Toolkit.”

This toolkit is a practical methodology for distinguishing natural forest areas that are worth protecting, as opposed to degraded areas suitable for development. Many scientists and campaigners consider this methodology to be best practice. 

However, the 2024 standard now defines HCS forests as: “Forests with above- and below-ground carbon stores, where the sequestered carbon losses as a result of land use change are greater than the potential gains in carbon stock within the new development area over the period of one planting cycle.” References to the HCSA toolkit have been removed.

According to Gemma Tillack, RAN’s forest policy director, this removal means natural forests could now be cleared for new plantations – including HCS forests. This change effectively allows companies to set their own “no deforestation” standards, she adds.

“The RSPO has now weakened its standard by removing definitive deforestation cut-off dates, and replacing credible definitions used to implement no-deforestation practices with flawed definitions of its own creation,” Tillack says.

Grant Rosoman, a Greenpeace forests specialist, says: “The revised RSPO definition of HCS forests is now essentially defined by how much carbon oil palm plantations sequester over their lifetime (25 years), or a simple carbon calculation, rather than looking at the attributes of forest ecosystems that make them categorised as HCS, such as canopy height, species composition and vegetation density, as set out by the HCSA.”

Greenpeace has also criticised the lack of an absolute cut-off date for when deforestation for oil palm plantations is prohibited. The standard states that any deforestation after November 2018 needs to be compensated via the RSPO’s remediation and compensation procedure, which currently requires the restoration of approximately one-seventh of the area cleared without an HCV assessment.

Rosoman explains: “It’s a very weak compensation system, to the point where it may be more profitable for a company to do the deforestation, establish a palm oil plantation, and then do a little bit of restoration afterwards, because they’d have the profit coming from the plantation.”

‘Implementation challenges’

The RSPO denies the new standard weakens protection of forests. In correspondence with RAN seen by Dialogue Earth, the RSPO states: “From the beginning of the review cycle in 2023, the RSPO has transparently communicated to all stakeholders involved that while the mandate for the revision process was to ensure greater auditability and implementability, there would be no diminution of the RSPO Standards relative to our existing versions. All revisions and iterations have been developed with this understanding.”

Talking to Dialogue Earth, the RSPO’s standards and sustainability director, Yen Hun Sung, says in terms of the criteria for land clearing and deforestation, “substantively, nothing’s really changed”. He adds: “We are still conserving HCS forests. What’s changed is the way that it’s been structured.”

Indicators in the 2018 standard were not necessarily laid out in a step-by-step approach, he explains. The new standard maintains the content, clarifying what is necessary at each stage of the certification process: “We’re trying to align it with all the other procedures in a way that makes it easier to implement, especially for new growers.”

The new standard also considers “implementation challenges” in countries with newer palm oil industries and high forest cover, such as Liberia and Gabon, Hun Sung explains. The RSPO set up a working group to develop an adapted HCSA procedure for these countries, so that they could balance development ambitions and deforestation concerns.

“Six years have passed and that hasn’t happened. We had very good intentions in 2018, but we hadn’t solved the issue of implementation,” says Hun Sung. “It’s largely reflective of this entire standard: 2018 was a major step forward, but 2024 is an evolution. It introduces some new elements, but it is also focusing on implementation.”

In addition, the RSPO is soon to launch a new digital traceability system known as Prisma. This will enable members to incorporate geolocation data into their traceability records. The system aims to facilitate compliance with both RSPO certification and the EU Deforestation Regulation (EUDR).

According to Kamal Seth, global palm oil lead at WWF (the environmental NGO is a member of the RSPO’s standards review steering group), further guidance will soon be issued to help members understand and comply with the updated standards: 

“HCS is still very much included in the standard, and nothing has changed in terms of cut-off dates. We are also supporting RSPO’s long-term strategic collaboration with the HCV Network and similar organisations to strengthen relevant systems to mainstream sustainable palm oil, and to support regulatory requirements like the EUDR.”

The RSPO stresses that the revised HCS definition explicitly references a manual used by auditors of RSPO-certified plantations, which incorporates the toolkit. However, Rosoman notes that having a new definition of HCS forests that contradicts the manual will be messy: “They’ve set up a direct internal contradiction within the standard, and it’ll just create problems and effectively create loopholes for companies and auditors to walk through.”

Pointing to the departure of several palm oil companies from the HCSA’s membership, including Golden Agri-Resources and IOI Corporation Berhad, Rosoman believes many are backing away from commitments to no deforestation: “The indications are that they’re pulling back from being a member of the HCSA, and now they’re dropping the definition from the RSPO standard, so it’s a gradual erosion of their commitment to it.”