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Sustainability and Palm Oil's Future

An Interview with Inke Van Der Sluijs, Market Transformation Direction, Roundtable on Sustainable Palm Oil (RSPO)

Inke van der Sluijs Director, Market Transformation

RSPO's Director of Market Transformation, Dr. Inke van der Sluijs, a Ph.D. holder in biology, joined the RSPO in November 2013. Inke's role in the RSPO secretariat is to lead the global market transformation by working with regional teams to ensure that the supply and demand of certified sustainable palm oil continue to grow. The supply of certified sustainable palm oil should be met by a demand for positive impact on the ground. The focus of this work is on mature markets like Europe and North America but also big consumption markets like Indonesia, India, and China. For Africa and Latin America, as new frontiers, the focus is on sustainable production and creating local market demand. Inke works with the Shared Responsibility Unit and Working Group on ensuring that the downstream members develop sustainable sourcing, environmental, and social policies. In addition to that, she also supports the Market Development Standing Committee.

1. Can you brief me a little bit on the palm oil outlook on sustainability and supply chain concerns?

We have seen rapid growth in its early years to increase the supply of certified sustainable palm oil. It looks like we're plateauing a little bit now. We're around 20% of the global palm oil that is produced and certified, which means it's deforestation-free, and it ensures that human rights are respected. We need to increase the market demand in large consumption areas.

The sustainable palm oil market for Europe and North America is very mature but for Indonesia itself, although the largest producer and consumer of palm oil, there's limited demand for sustainable palm oil. Same in Malaysia, India, and China. We need to find ways to promote sustainable sourcing in these countries. Of course, we hope to grow in this these markets, to ensure that the farmers that have changed our practices are incentivized for the change that they are making. We’ve also increased the supply of certified sustainable palm oil.

2. What are your views on the EU's tough stance towards palm oil? How can RSPO/MPOA play a role in alleviating the situation?

It's an interesting question because I've been based in the European market and I'm in a global position now. Before I was responsible for growing the European market, there was a lot of demand for sustainable palm oil as it’s a mature market. There's also this active campaign against palm oil which makes our work super difficult because consumers are confused by the messages that companies used, say this product does not contain palm oil, for example. We need to educate the consumers and the companies that there's good palm oil when it's produced sustainably. Now the EU has adopted this legislation to halt deforestation, on imported goods for specific commodities and palm oil is one of them.

We agree with the European Union that we should limit deforestation and we already founded it in 2004. For that, we agree with that direction because it creates a level playing field for our members in the region. At the same time, it should be done at a reasonable pace with requirements that the sector can meet. Saying it needs to be legal and deforestation-free is a direction that we fully support, but it also needs to be implementable. We see issues, for example, smallholders. Of course, we don't want this legislation to come into force too quickly, because then companies cannot work with the smallholders and ensure that they can still be included in the imports into Europe.

It's really important however the detailed text of the commission is not out yet. If the European Commission decides on this direction, we’re glad because we fully support the move on halting deforestation. However, the way it should be implemented by the sector is something that they should be looking at for voluntary schemes. In other commodities, there are voluntary schemes. They should look at ways that it's feasible for companies to implement it and ensure that they can meet the timelines that are now laid out.

Education on Sustainable Palm Oil to Al Jabr Islamic International School

3. Given Indonesia and Malaysia's agreement towards the EU's renewable-energy directive, what are the steps the palm oil industry has taken to address this issue?

The EU directive on biofuels works towards phasing out first-generation feedstocks. Direct use of palm oil for biofuels will no longer be allowed, starting in 2030. This is the same for sunflower rapeseed and all virgin oils, the feedstocks will not be used for biofuels, because of the EU’s opinion that there should be other ways to make the transport sector more sustainable.

Think about hydro, hydrogen, solar power, and other means of using cooking oils, so it's not the virgin oils that should go into biofuels. I think the sector will be impacted because the consumption of palm oil in Europe will decrease, say until 2030. I think the sector has ensured that they can import pumps for biofuels. However, it will no longer be possible to do that after 2023.

4. EU officials say their regulations do not target any one country and are aimed at ensuring that commodity production does not further drive deforestation. What’s your take on this?

That's correct. What they say is none of the imported goods should contribute to deforestation. Malaysia and Indonesia, of course, feel offended by the fact that the commission has listed seven commodities that have been related to deforestation in the past. However, the regulation will be applied to all commodities and imported goods. Hence, part of the sector is ready to do this as our members have not deforested since 2005 which during our standards came into effect. These companies are ready to comply and import into Europe.

The challenge is that palm oil is a commodity categorized as liquid. Oftentimes, we mix sustainable material with conventional uncertified material. This will be a challenge for companies to prove that the conventional material that they have in the mix is not related to deforestation. That will be the challenge.

5. Do share with us other challenges that the palm oil industry currently overcome and what are future projects and plans.

There are a lot of challenges. There will be less harvesting and fruits going to waste. The eyes are on RSPO. When we were founded, we were very much focused on the environmental impact of the agricultural sector. These days, there's more attention on human rights. A large challenge ahead for our members is ensuring that the workers are treated fairly, working in safe conditions, getting appropriate salary, and housing. The focus will now be on the social effects. So that's the other thing about the regulation.

RSPO is now a holistic scheme where you look at environmental and social impacts, and improve these conditions. The regulation that is out now or accepted now is not fully published and is focused on deforestation and legality. The new legislation will come on human rights and the risk is that companies will fall for the inputs if Europe only looks at deforestation and its legality. Once the human rights element comes in, they look only at human rights. Whereas if they use our skills to prove that they have done their due diligence on environmental and social elements, you have it all covered. The EU is very focused on what the director general is responsible for. It's either environmental or social. Whereas RSPO has already evolved into a scheme that covers all of the elements of sustainability. That includes labor conditions and workers' rights. I think that will be a challenge in the coming years.

We're currently revising our standards. By the end of the year, our new standard should be endorsed. It is about creating a standard that can be applied by our members, that is clear and auditable. The evidence for positive impacts on the ground can be proven, I think that is an important development. We hope that our members all agree and adopt our new standard by the end of the year.


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