RSPO certification - sustainability for whom?

Down to Earth No.80-81, June 2009

The Roundtable on Sustainable Palm Oil (RSPO) has started awarding certificates to palm oil producers, even though some of those companies are involved in unresolved conflicts with local communities.

For many CSOs in Indonesia, there are still a lot of questions about the awarding of RSPO certificates to oil palm companies in the country. Certification is supposed to be based on RSPO principles and criteria, agreed in 2007.¹ But what is really the basis for evaluating and awarding these certificates?

The question has been raised because almost all oil palm plantation development in Indonesia has been accompanied by social conflict with local communities and/or small-scale farmers. In 2007, the Indonesian NGO network Sawit Watch counted 514 social conflicts linked to oil palm plantations. The National Commission on Human Rights has received 10 cases of conflict related to oil palm plantations, and the environment ministry, 56 environmental cases in 2009. This reflects what Sawit Watch describes as the large scale and systematic robbery of forests for oil palm development.²

Currently three Indonesian palm oil producers have secured RSPO certificates: PT Musim Mas³, PT Hindoli⁴ and PT Lonsum Tbk. ⁵ These certificates were awarded for several plantations and mills these companies operate in Sumatra.

In order to secure an RSPO certificate, companies must submit to audits carried out by a certification body accredited by the RSPO. Accredited companies currently include: Control Union of the Netherlands, SGS (Malaysia), BSI of Singapore), Sirim QAS (Malaysia), PT Mutuagung (Indonesia), PT TV Nord (Indonesia), IBD (Brazil), SAI Global (Indonesia), Sucofindo (Indonesia), Moodys International (Malaysia) and TV Rheinland (Malaysia). Two other companies, Agrovet (Austria) and Guardian Independent Certification are in the approval stage.⁶

Under a proposal developed by the RSPO in 2007, there are three ways of promoting RSPO certified palm oil in the supply chain:⁷

• "This product contains RSPO certified palm oil" (option 1) where there are segregated supply chains,
• "This product contains x % RSPO certified palm oil" (option 2) where there is 'Controlled Mixing' of certified and non-certified palm oil, and
• "This product supports the trade in sustainable palm oil" (option 3), where there is 'Parallel Certificate Trading' or 'Book and Claim'. Book and Claim means that a consumer books a certain amount of RSPO certified palm oil, it enters the supply chain along with non-certified oil, and an equivalent amount is 'claimed' at the consumer's end, without the certified oil being actually traceable in the system.⁸

Companies with RSPO certification

PT Musim Mas
This company was founded in 1972 by Anwar Karim and is now headed by Bachtiar Karim. Musim Mas currently has plantations extending over 180,000 hectares in Riau, North Sumatra, Jambi and Kalimantan.

Between April and September 2005, there was a labour dispute in this company, when workers demanded their right to join a union. Over 700 workers were sacked and a further conflict was eventually settled through a decision of the Central Committee for the Settlement of Labour Disputes (P4P).⁹

In Central Kalimantan, two subsidiary companies, PT Sukajadi Sawit Mekar (SSM) and Maju Aneka Sawit (MAS) have been engaged in a conflict with local communities in Sebabi, Tanah Puti and Kenyala villages, Kotawaringin Timur district, since 2004. The conflict was provoked when the company cleared community land, most of which was planted with rubber trees, jelutung gum trees, and rattan. The clearing was done without the communities' consent.¹⁰

Musim Mas was also among the companies whose licences were suspended by the Forestry Department in 1997 when devastating forest fires swept through Indonesia's forests. Many of them were deliberately set by oil palm companies in order to clear forest areas for planting. The fires created a choking smoke-smog across the region, leading to health impacts, as well as destroying countless livelihoods, wildlife habitats and resulting in massive CO₂ emissions.¹¹

PT Hindoli
This company is a subsidiary of the Cargill Group, which owns five oil palm plantation companies. Two in Indonesia (Hindoli, in Sumatra, and Harapan Sawit Lestari (HSL) in West Kalimantan) and three in Papua New Guinea.¹²

PT HSL's long-running conflict with the local indigenous communities over land was reported by DTE and WALHI Kalimantan in a joint publication, and again in 2002, when the company was still owned by the UK government's investment body, CDC¹³. CDC sold all its oil palm plantation interests in Indonesia and PNG to the US giant agro-industry transnational Cargill in early November 2005.¹⁴

PT PP London Sumatera Indonesia Tbk
This company is more than a hundred years old - it was founded in 1906 as a British company growing rubber, coffee, cacao and tea, in the pre-war era before moving into palm oil. The company became a subsidiary of British palm oil traders Harrison and Crossfield. They sold out in the mid-1990s when PT Lonsum became an Indonesian company, listed on the Jakarta stock exchange.¹⁵

The company has been involved in several social conflicts with local communities in Sumatra, Kalimantan and Sulawesi, most of them concerning land and some of them violence.¹⁶ In East Kalimantan, 2009, mobile brigade police fired shots, made arrests and terrorised indigenous Dayak villagers who had occupied the company's base camp in protest against the takeover of their land for plantations.¹⁷ In Sulawesi 2003, three farmers were killed by mobile brigade police and several others seriously wounded, in a long-running land dispute with the company.¹⁸

For a table of companies which have been or will be audited, see annex.

Notes:

¹ For RSPO background see for example, DTE 72, and DTE 72, DTE 76-77, DTE 66.
² Jakarta Post 19/May/09
³ Edisi 17 Februari 2009. Baru Satu Perusahaan Sawit Punya Sertifikat RSPO. www.endonesia.com/mod.php?mod=publisher&op=viewarticle&cid=47&artid=2829
⁴ Edisi 3 Maret 2009. Hindoli raih sertifikat RSPO http://web.bisnis.com/edisi-cetak/edisi-harian/agribisnis/1id106177.html
⁵ www.rspo.org
⁶ www.rspo.org/List_of_Certification_Bodies.aspx
⁷ www.rspo.org/resource_centre/Sustainable%20Palm%20Oil%20Certification%20and%20Trading%20Systems%20(June%202007)_1.pdf
See also www.rspo.org/resource_centre/RSPO%20Supply%20Chain%20Certification%20Systems.pdf
⁸ www.rspo.org/resource_centre/RSPO%20final%20report%20Annex%205.pdf
⁹ KapanLagi.com. 8 Juni 2006. PT Musim Mas-PUK SP Kahutindo Sepakati PHK 701 Karyawan
¹⁰ nordin-journal.blogspot.com/2008/12/konflik-pt-ssm-musim-mas-group-dan.html
¹¹ See DTE 35, supplement page 8.
¹² www.cargill.com
¹³ See WALHI-DTE report on CDC and DTE 55.
¹⁴ See DTE 67
¹⁵ See DTE 42, www.londonsumatra.com
¹⁶ nasrilbahar.blogspot.com/2007/10/akuisisi-pt-lonsum-diminta-jadi-momen.html
¹⁷ See DTE 42.
¹⁸ SeeDTE 59.