Friday, November 9, 2018

RSPO fails to deliver on environmental and social sustainability, study finds

https://news.mongabay.com/2018/07/rspo-fails-to-deliver-on-environmental-and-social-sustainability-study-finds/



  • The Roundtable on Sustainable Palm Oil (RSPO) is widely considered the strongest certification scheme for the commodity, which is grown largely on plantations hacked out of tropical forests that are home to critically endangered species such as orangutans.
  • A new study has found that RSPO-certified plantations perform no better than non-RSPO estates on a series of sustainability metrics, including species and habitat conservation, as well as social benefits to local communities.
  • The researchers attributed the scheme’s shortcomings to a lack of clarity on its central objectives, as well as weak environmental safeguards.
  • For its part, the RSPO has disputed the study’s findings, citing other reports that it says highlight a net positive impact to the environment and communities from certification.
JAKARTA — Oil palm plantations that adhere to the world’s leading certification scheme for the crop show no difference in environmental, social and economic sustainability than non-certified estates, a new study has found.
The study — carried out by researchers from the University of Queensland and the ARC Centre of Excellence for Environmental Decisions (CEED), both in Australia, and Borneo Futures — is one of the first to assess how effective the Roundtable on Sustainable Palm Oil (RSPO) is in achieving its sustainability goals by comparing certified and non-certified concessions.
To do that, they created the most comprehensive map and dataset yet of RSPO-certified sites in Kalimantan, the Indonesian portion of the island of Borneo. They then used the map and dataset to assess how effectively these plantations delivered on six of the eight central pillars of the RSPO’s principles and criteria: conservation of biodiversity, responsible development of new plantings, responsible consideration of communities, consideration of social impacts, economic viability, and commitment to best practice.
Not very well, as it turned out. “No significant difference was found between certified and non-certified plantations for any of the sustainability metrics investigated,” the researchers wrote. In fact, the only area where RSPO certification made a positive impact was in higher yields and share prices for certified companies.
“[O]ur results suggest that low confidence in the [RSPO’s] mechanisms for improving overall industry sustainability appears warranted in all but very narrow and economically-oriented interpretations of sustainability,” the researchers concluded.
Global demand for products like palm oil is responsible for depleting tropical forest cover, with often grave health consequences for local communities. Photo by Rhett A. Butler.

Benchmarking the benchmark

The study’s findings are notable, given that the RSPO is widely regarded as having the strongest set of requirements among existing certification schemes for edible oils and biofuels.
The standard was established in 2004 in response to a growing recognition that the expansion of oil palm plantations was fueling rainforest destruction and land grabs in countries like Indonesia, where legal protections for the environment and indigenous communities were seen as weak, and enforcement of the law even weaker.
Since then, the RSPO has grown to become the leading certification scheme for palm oil, with 26,500 square kilometers (10,200 square miles) of plantations and 11.65 million tons of palm oil — representing a fifth of the global production of the commodity — falling under its scope.
Before this recent study, however, few investigations had been undertaken to evaluate the RSPO’s effectiveness in achieving sustainability aims, leaving decision-makers without the evidence-based answers to whether investment in RSPO is an effective means of obtaining outcomes better than business as usual.
A baby orangutan in North Sumatra, Indonesia. Along with habitat loss due to mining, orangutans in both Sumatra and Borneo are threatened by fires and deforestation for oil palm and pulp plantations. Photo by Rhett A. Butler/Mongabay.

‘No evidence’ of orangutan protection

One of the key sustainability measures where the study found the RSPO lacking was in helping conserve biodiversity, for which the researchers looked at the fate of the critically endangered Bornean orangutan (Pongo pygmaeus).
The survival of the species depends on whether it has enough viable habitat to survive. In Indonesian Borneo, where palm plantations are taking over the rainforests that constitute the orangutans’ habitat, their prospects look dim. Coupled with this loss of habitat is the routine killing of the great apes, which are viewed by plantation workers as vermin.
The study found there was no evidence that RSPO-certified plantations provided better protection for orangutans. Their populations declined in both certified and non-certified concessions between 2009 and 2014, according to CEED researcher Courtney Morgans, the lead author of the study.
“Despite aims to manage plantations in a way that ‘maintains and/or enhances’ high conservation value species, our study found little evidence that RSPO plantations are improving protection of the critically endangered orangutan,” Morgans, who is also affiliated with the University of Queensland, told Mongabay in an email.
The study also found that RSPO plantations usually feature extensively deforested areas, leaving little viable habitat for the orangutan. Under RSPO regulations, new plantations cannot be developed from primary forest as of November 2005. Companies gunning for certification prior to that deadline would therefore have razed much of the forested parts of their concessions in order to maximize their available land.
By contrast, many non-certified plantations still contain forest patches and viable orangutan habitat, since no clearing deadlines exist for them.
In all, the researchers wrote, “No evidence was found to suggest that RSPO certified plantations were able to retain populations of orangutan better than non-certified concessions.”
An oil palm plantation in Indonesia burns. Photo by Rhett A. Butler

‘Only small benefits’

Another environmental indicator that the researchers looked at was fire incidence. Again, the findings showed little benefit from RSPO certification.
“The number of fire hotspots detected within palm oil concessions increased equally in both RSPO and non-RSPO concessions between 1999-2004 and 2011-2015 with no significant difference in the number of fire hotspots in certified and non-certified concessions,” the researchers wrote.
The study also found that the RSPO failed to deliver on social impacts. “There also isn’t a clear signal that RSPO is improving levels of wealth or improving access to health infrastructure for villagers neighbouring the plantations,” Morgans said. “The only small benefits we could detect were marginally higher yields and share values for certified companies.”
The study suggests that RSPO certification has failed to prevent deforestation and biodiversity loss because participants have differing interpretations of its primary objective, which is to “promote sustainable palm oil.” As a result, different RSPO stakeholder groups prioritize certain criteria over others.
The RSPO’s own principles and criteria — the eight central pillars — also leave much of the scheme open to interpretation through vague wording such as “maintain populations” and “promote positive impacts,” Morgans said.
She suggested that these terms be replaced with something more definitive that can be quantified.
“The immediate adoption of specific and measurable targets will improve RSPO’s effectiveness,” she said.
Another factor is that the RSPO’s environmental safeguards may simply not be strong enough, according to a recent report by the Changing Market Foundation. The report notes that the certification scheme still allows the conversion of secondary forests and the draining of peatlands, and does not require reductions in emissions of greenhouse gases.
“As this report exposes, RSPO has been at best a distraction and at worst a hindrance to efforts to improve the sustainability of palm oil,” Deborah Lapidus, campaign director for the environmental advocacy group Mighty Earth, wrote on the group’s Facebook page.
Morgans said the RSPO’s failings could also be blamed on its focus on improving the sustainability of the palm oil industry at the plantation level, rather than addressing sustainability issues at a larger level. This, she said, limits its ability to deliver broad benefits.
For example, the requirement to “maintain and enhance” high conservation value species ignores the biology and behavior of many species the scheme is trying to protect, such as the orangutan.
“The Bornean Orangutan requires a large home range due to seasonal food availability,” Morgans said. “Effective conservation of the species, therefore, requires the conservation of large and connected forest patches, which can only be achieved with landscape level coordination.”
Similarly, the aims of contributing to local sustainable development and improving the social impacts of plantation and mill operations require coordination between multiple stakeholders. As such, the study argues, the delivery of social benefits and infrastructure should be developed and implemented at a higher level rather than simply a per-concession basis.
To address this weakness, the study’s authors called on the RSPO to adopt jurisdictional approaches aimed at certifying entire administration units rather than individual plantations.
An oil-palm plantation with a few remaining rainforest trees in Sarawak, Malaysia. Photo by Rhett A. Butler.
An oil-palm plantation with a few remaining rainforest trees in Sarawak, Malaysia. Photo by Rhett A. Butler.

RSPO responds

The RSPO, for its part, has called into question the validity of the new findings.
Stefano Savi, the RSPO’s global outreach and engagement manager, said there was ample evidence in recently published independent studies showing that RSPO-certified concessions had both reduced deforestation rates as well as the number of hotspots.
One study he cited, coordinated by Borneo Futures in 2017, measured deforestation and orangutan population in 2,717 oil palm estates and concessions throughout Borneo. That study showed that RSPO-certified concessions lost 9 percent of intact and logged forest per total concession area, against 17.2 percent for non-RSPO concessions between 2000 and 2015. The authors of that study also reported that annual forest loss rates in certified concessions declined consistently after 2005, while those on non-RSPO concessions stayed consistently higher.
The 2017 study also found that the rate of orangutan population decline was lower, in absolute terms, for RSPO-certified concessions as compared to non-RSPO concessions.
“Overall, the data obtained from the study suggested that RSPO-certified concessions are better at working towards the protection of orangutans, as compared to non-certified concessions,” Savi told Mongabay in an email.
Savi also questioned the accuracy of the modeling used by Morgans to determine the orangutan population, saying that by relying on nest counts, it might have failed to account for transient orangutans.
Morgans, who was also involved in the 2017 study, noted that while RSPO-certified concessions had lost fewer orangutans than non-RSPO estates overall, the relative rate of loss was almost the same — 2.2 percent to 2.1 percent, respectively.
Savi also cited another study, published in the Proceedings of the National Academy of Sciences, which found that RSPO certification reduced deforestation in Indonesian oil palm plantations by 33 percent from the business-as-usual scenario between 2001 and 2015.
But that reduced deforestation mostly happened in older plantations, where much of the forest had already been cleared prior to, leaving little to deforest. As a result, the actual area of avoided deforestation was small: just 21 square kilometers (8.1 square miles).
Savi said it was also not clear whether Morgans’s study had taken into account non-certified concessions that had been gazetted for oil palm plantation but were currently inactive.
“Should there be such cases, it should be clearly indicated as it would not be accurate to compare active RSPO-certified areas to inactive non-certified areas,” he said.
Oil palm nursery and processing facility in Sumatra, Indonesia. Photo by Rhett A. Butler.

Improving the scheme

Savi said the RSPO management recognized there were still many areas for improvements. He said it had already commissioned studies to determine the actual performance of the certification scheme against its stated standards. Those studies indicated either a net positive impact or little negative impact for RSPO-certified sites, he said.
“As part of our effort to address this issue, we have been working to strengthen our standards through a revision of the RSPO Principles & Criteria, which began last year and is currently underway,” Savi said. The RSPO’s principles and criteria are revised every five years.
Savi said the RSPO would also be looking to conduct more research on the performance and impact of its strategies and interventions to identify potential gaps and help improve its standards.
“Towards this end, we have published a Research Agenda, which details our priority research questions, on our website and have put aside budget to commission our own impact evaluation studies,” he said.
Morgans welcomed the move. She said that despite its shortcomings, the RSPO was still an important mechanism for improving the sustainability of the palm oil industry.
“Dismissing the scheme altogether does risk the advances made so far,” she said. “Instead, effort should be placed on evaluating the scheme, offering constructive criticism, and supporting stakeholders with the development, implementation and adaptive improvement of sustainable practices.”
A previous version of this story incorrectly described the study as the first one to assess RSPO effectiveness by comparing certified and non-certified concessions.
Banner image: Orangutans in Borneo have been seriously threatened by the oil palm industry. Photo by Rhett A. Butler/Mongabay.

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Is Indonesia’s celebrated antigraft agency missing the corruption for the trees?

https://news.mongabay.com/2018/08/is-indonesias-celebrated-antigraft-agency-missing-the-corruption-for-the-trees/


  • Indonesia’s Corruption Eradication Commission is perhaps the most trusted institution in a country plagued with graft. But the KPK, as it is known, has prosecuted only a handful of cases in the plantation sector.
  • Corruption in the plantation sector is a principal underlying cause of Indonesia’s deforestation and land-rights crisis. Our analysis found a range of obstacles preventing the KPK from taking action against corrupt politicians and the unscrupulous companies engaging in large-scale land deals.
  • This article is part of the Indonesia for Sale series, produced through a collaboration between Mongabay and The Gecko Project, an initiative of the London-based investigations house Earthsight.
In 2005, an Indonesian election commissioner named Mulyana Kusumah visited a hotel room in Jakarta to hand over 150 million rupiah, then worth more than $15,000, in cash to an official from the state audit board. Mulyana hoped to smooth over a discrepancy auditors had found in the tender process for ballot boxes. But the auditor was wearing a wire, while investigators from the nation’s antigraft agency, the KPK, lay in wait. After arresting Mulyana, a KPK team swept the election commission’s offices and found a treasure trove of documents and computer files that would allow them to piece together billions of rupiah in kickbacks, resulting in a spate of high-level convictions.
The case served notice that an agency founded just two years prior had arrived with a splash. “Almost every day, the newspaper and television [journalists] wrote about the KPK,” Ary Nugroho, an early KPK adviser, said some years later. “The expectations of the people became bigger and bigger after that case.”
The KPK was established in 2003, half a decade after the fall of the dictator Suharto. Its first leaders built the agency from scratch, and after a few short years, wrote Gabriel Kuris, deputy director of the Center for the Advancement of Public Integrity​ at Columbia Law School in New York​, “they had built one of the world’s most effective anti-corruption agencies.” Since then, the number of cases brought by the KPK has grown rapidly, with dozens of politicians, bureaucrats and businesspeople jailed for graft every year.
At the same time, the KPK has prosecuted only a handful of cases involving the plantation sector. Indonesia, the world’s largest producer of palm oil, is home to a huge number of palm estates so enormous they are often the size of small cities. Timber and sugarcane plantations are also prevalent. The plantations are typically run by large conglomerates whose operations must be approved by local politicians. The sector is known to be riddled with corruption, having exploded in a fragile moment during the nation’s transition to democracy. For the KPK, some big wins against plantation firms in the mid-2000s have given way to a trickle of cases in the past few years.
There is a growing realization that the corrupt allocation of land to plantation firms is a main underlying cause of Indonesia’s deforestation and land-rights crisis. Backroom deals with politicians allow companies to clear rainforests and peat swamps that might otherwise be protected, and to seize land from indigenous and other rural communities, while also channeling dark money into elections. With the stakes so high, then, why has the KPK prosecuted so few of these cases?
The main KPK building in Jakarta is designed to match the red and white of Indonesia’s flag. Image by Everyone Sinks Starco/Flickr.

A promising start

The KPK’s first foray into the plantation sector came in 2007, when it exposed a scheme masterminded by Martias Fangiono, owner of multinational timber firm Surya Dumai, and Suwarna Abdul Fatah, then governor of East Kalimantan province in Indonesian Borneo. Martias’s firm was running out of raw materials for its mills following a nationwide crackdown on illegal logging. Claiming it would establish oil palm plantations, the firm obtained licenses from Suwarna to clear a vast area of rainforest in Borneo. The governor also allowed the firm to avoid providing a bank guarantee to cover the expected taxes from the timber revenue.
Martias’s firm felled almost 700,000 cubic meters of timber, but the land was never planted. Both he and Suwarna were convicted and imprisoned, with Martias ordered to pay 346 billion rupiah, then equivalent to around $35 million.
Not long after, the KPK launched the first of what would become a string of cases in Riau province, on Indonesia’s main western island of Sumatra, with prosecutions against a governor and several district chiefs. It began with charges against Azmun Jafar, a district chief who had issued timber plantation licenses to seven shell companies set up by his cronies and family members. After receiving the licenses, these individuals quickly flipped the companies to genuine plantation firms, including to an arm of the APRIL Group, one of Asia’s biggest paper producers. The firms on the other end of the scheme proceeded to log the forest in their concessions for a hefty profit. The courts decided it had cost the state 1.2 trillion rupiah, then equivalent to $121 million, in losses from timber revenues and taxes.
Greenpeace activists protest in front of the KPK building in Jakarta in 2009, calling for the arrest of government officials over permits handed out in Riau province. Azmun Jafar, a district chief, is depicted as a prison inmate. Image courtesy of Greenpeace/Flickr.
After the victories in East Kalimantan and Riau, however, the attention given by the KPK to the plantation sector declined dramatically. The Gecko Project and Mongabay were able to identify just two more cases, in 2014 and 2015, in which politicians were convicted in connection with oil palm projects. The cases involved businesspeople bribing a district chief and a governor, respectively, to ease the licensing process for plantations. And yet, despite the minuscule number of prosecutions, plantations have proliferated in jurisdictions run by demonstrably corrupt politicians. The destruction of rainforests and allegations of land grabbing have been quick to follow.

Obstacles to prosecution in law and practice

Viewed in isolation, the notion that the KPK would decline to put resources toward investigating plantation firms seems implausible. But the agency has its hands full, with corruption endemic to virtually every level of government and every sector of the economy in Indonesia. Since 2005, the KPK has received an average of more than 7,000 reports of graft per year. Half of these complaints include credible evidence it can follow up on. But while the number of cases it prosecutes has increased considerably, from 45 in 2011 to 110 in 2016, this represents only a fraction of the credible reports it receives.
The KPK “has so few investigators, [it] has to choose the easiest cases,” Tama Langkun, a researcher with Indonesia Corruption Watch, an NGO based in Jakarta, said in an interview. “It can’t spare the energy and time to take on [many of the more] challenging cases we flag up.”
The KPK also has a limited appetite for taking on challenging cases that might jeopardize its success rate. The agency has a perfect record of winning the cases it prosecutes (on appeal, if not at the first attempt), secured partly by pursuing cases in which the evidence is irrefutable, such as when a suspect has been caught red-handed in the act of bribery. The agency also finds itself periodically under political attack from rival institutions, particularly the police. This further drains its resources, while also entrenching the need to win cases, as any loss in court could potentially be used to support allegations of overreach from its detractors.
A further obstacle is the law itself. The 2002 Corruption Law stipulates that if a suspect has not been caught delivering or accepting a bribe, the agency must show that the allegedly corrupt act resulted in “state losses.” This criterion is easiest to fulfill where officials have stolen from state budgets or engaged in procurement scams, cases that incur obvious fiscal losses. Of the 110 cases the KPK prosecuted in 2016, the largest share, around a quarter, involved politicians siphoning money from state budgets. Cases where this has taken place in the education and health sectors are a priority. They represent 20 percent and 5 percent of the state budget, respectively, with huge sums to be made through corruption, and egregious consequences where it occurs. Our analysis of KPK annual reports suggests that such cases, along with the bribery of judges and court officials, make up the vast majority of the agency’s prosecutions.
By contrast, corruption in the plantation sector often involves more complex schemes, where a tidy figure for “state losses” is not always easy to calculate. The model that The Gecko Project and Mongabay have investigated over the past 18 months entails the use of shell companies and proxy owners as vehicles for selling plantation licenses to major firms. One politician, Darwan Ali, then the head of Seruyan district in Borneo, issued permits to 18 companies set up by his relatives and cronies, who quickly flipped them on to major firms. Another politician, Hambit Bintih, the then head of Gunung Mas district on the same island, gave licenses to five companies formed by his campaign manager as he was preparing to launch an expensive re-election campaign.

In its successful case against Azmun Jafar, the district chief in Sumatra who presided over a similar scheme, the KPK used flyover and satellite imagery to view the damaged forestland from above, helping the agency come up with a reliable figure for state losses, said Lais Abid, another ICW researcher. But such methodologies are normally beyond the KPK’s resources, he added. In the Seruyan case, for example, a local activist who reported Darwan Ali to the KPK argued that the value of the timber that was logged as a result of the licensing scheme should be tallied up and considered as state losses. But while the KPK paid several visits to Seruyan, it never proceeded with charges against Darwan. Local activists said they had heard from the KPK that state losses were a sticking point.
“The problem is when it comes to natural resources, it’s hard to prove state losses,” Lais said. “It’s much easier if they rob state coffers directly.”
Tama Langkun, left, and Lais Abid, researchers with Indonesia Corruption Watch.

What chance for change?

Recent ongoing legal innovations may have implications for the KPK’s ability to take on and win plantation cases. In a case brought this year against then South Sulawesi governor Nur Alam, alleged to have corruptly issued nickel-mining licenses, the agency argued that the losses incurred by the state were not only fiscal, but also environmental. As ICW put it, “What was done by Nur Alam was not only detrimental to the state’s finances but also had an impact of long term environmental damage, lasting for generations.” KPK prosecutors argued that of the 4.3 trillion rupiah ($312 million) in state losses incurred by the mining operations, more than half could be attributed to environmental damage.
But although the governor was jailed, the judges rejected the environmental argument, discounting it from their decision over his sentence. Moreover, Nur Alam filed his own suit against Basuki Wasis, an academic who testified on behalf of the KPK that the governor’s actions had harmed the environment. In hopes of securing a stricter sentence, the KPK has appealed the ruling against Nur Alam. The ultimate decision potentially holds great significance for the effort to tackle graft in the natural resource sector.
Some observers have argued that the definition of state losses must be expanded to include harm to people. Indonesia’s agribusiness explosion has resulted in thousands of disputes over land between companies and communities, and deprived local people of natural resources they depend on for their livelihoods and culture. A recent study commissioned by the Indonesia Business Council for Sustainable Development, for example, examined several communities whose forests had been annexed by plantation firms, cutting them off from natural supplies of water and food. The study found that local residents were forced to pay an additional monthly cost of 3.48 million rupiah ($250) per household, a huge sum in rural Indonesia, to buy what they used to get for free.
Rainforest cleared to make way for an oil palm plantation in Gunung Mas district, where district chief Hambit Bintih issued licenses to five companies set up by his campaign manager. Image by Sandy Watt for The Gecko Project.
The KPK has carried out its own study on the “social cost of corruption,” according to Sulistyanto, head of the agency’s prevention department. “Hopefully, this can increase the fines and penalties,” he said in an interview. “It’s still a study, but we hope it can be constructed in law.”
Indeed, the KPK has focused greater energy on preventing corruption in the plantation sector than on pursuing prosecutions. For example, the agency is pushing local governments to consolidate their licensing maps and hand them over to authorities in Jakarta. It is also working with the Ministry of Agriculture to create a database of every plantation company that documents their ownership. This is in line with a new regulation issued by President Joko Widodo in March, mandating that every company in the country must disclose at least one of its beneficial owners to the government within a year. “If we only focus on enforcement, we might make more arrests, but the opportunities for corruption will continue to exist,” Sulistyanto said. “The systems and regulations must be improved.”
In a bid to improve governance around licensing, the KPK has instigated a massive review of permits held by plantation companies across the country. A similar program in the mining sector has already resulted in the revocation of hundreds of permits. Whether any plantation licenses will be similarly annulled remains to be seen.
Yet the KPK’s work as a watchdog may yet have a significant impact. At present, the total area licensed out to plantation firms contains some 60,000 square kilometers (23,000 square miles) of undeveloped forestland and carbon-rich peat soil, an area nearly as large as West Virginia. Whether this natural wealth will be preserved or wiped out is an open question. Our investigations found that corruption has played a role in licenses being issued, but also in what happens once companies hold rights to land. Compliance with environmental legislation has been weak, companies have been effective in pushing people off their land, and communities have found little recourse where they have resisted.
The ability of companies to operate in such a regulatory vacuum is likely due in large part to the undue influence they hold over politicians. The KPK’s watchdog role, especially if supported by investigations by the media and NGOs, may yet have a chilling effect on the ability of companies to operate with impunity across the vast areas of unexploited rainforest.
A forest canopy in the heart of Borneo. Image by Sandy Watt for The Gecko Project.
This is the second of three analyses to be published by The Gecko Project and Mongabay examining corruption in Indonesia, and the responses to it from government and civil society. The first article examined the connection between corrupt licensing practices and regional elections. The final article will explore civil society interventions to combat similar practices in other countries, including India, Chile and the U.S. The articles are part of our broader Indonesia for Sale series.
Read the first two investigations in the series, “The Palm Oil Fiefdom” and “Ghosts in the Machine.”
Banner: Petrus Asuy, a Dayak man from Muara Tae village in eastern Borneo, where a local indigenous community is involved in conflicts over land with several oil palm companies. Photo by Philip Jacobson/Mongabay.
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Knowing Malaysian Palm Oil Investors in Indonesia

https://www.palmoilmagazine.com/news/8504/knowing-malaysian-palm-oil-investors-in-indonesia   Main News | 21 January 2021 , 06:02 WIB ...