Deforestation-Free Palm Oil

Palm oil producing countries (POPC) are united in their resolve to comply with standards for sustainably produced palm oil and lead in this endeavor well beyond other vegetable oils. Many oil palm plantation companies are already producing their palm oil in compliance to the Round Table for Sustainable Palm Oil (RSPO) sustainability standards. The RSPO is a business-to -business voluntary scheme, and its adoption is expected to be popular and affordable among the big plantation companies. As of 2018, RSPO based certified palm oil production has a 19% share of the global palm oil market. Recently the growth in RSPO certified palm oil production has slowed down considerably. This is due to saturated demand for certified palm oil in the EU and USA, the two countries where certified palm oil has been promoted to meet consumers requirements. The aim of the sustainability standards however,  is not just to fulfil the demand for certified palm oil in the EU and USA but also to establish industry-wide sustainable palm oil production practices which will help to protect the environment, care for the people and provide the plantation companies with reasonable profits: as embodied in the 3Ps pillars of sustainability which implies caring for the planet, people and prosperity.

The oil palm is an agricultural crop and like most agricultural crops and commodities, agricultural land has to be developed by converting mostly previously forested areas of a country. Agricultural development is well known as the main cause of deforestation in the past in Europe, US, Australia and other developed countries. As a result, most of these countries have less than 50% of their land under forest cover as their agriculture already mostly consumed more than 50% of their land area. On the extreme end, countries such as Holland and the UK have respectively 8% and 12% of forest cover left and over 70 % each under agriculture. They cannot justifiably claim to produce deforestation free agricultural commodities as it is obvious that extensive use of their land for agriculture has involved past deforestation.  The extensive level of deforestation in the past in these developed countries means that the carbon stock of their forest has been mostly depleted. The right thing for them to do going forward to achieve sustainability standards for agriculture is to reforest their land to above the 50% level. The recreated forest will re-establish their future carbon sink, and it is as important as their call for no deforestation in future agricultural development of developing countries which is also to similarly ensure the preservation of carbon stock by the forest.

Realizing that agricultural development is the major cause of deforestation, palm oil producing countries are responding with appropriate action plans to produce deforestation-free palm oil. Indonesia, the world’s largest producer of palm oil has adopted an approach that requires mandatory certification for sustainability through the Indonesian Standard for Sustainable Palm Oil (ISPO). Legally, if all producers of palm oil can comply with mandatory ISPO principles and criteria, it should result in a nation-wide production of deforestation-free palm oil. Similarly, Malaysia has introduced the Malaysian Sustainable Palm Oil Standard (MSPO) and will make its adoption mandatory by 2020 by all palm oil producers in the country, with the intention that Malaysia will be producing and exporting sustainably certified and therefore deforestation-free palm oil to the world.

To reinforce the accelerated achievement of 100% deforestation-free palm oil production, other complementary strategies are being proposed and some are already being implemented. Indonesia has announced and implemented a moratorium on further expansion of oil palm cultivation. This will stop any expansion of agriculture for oil palm cultivation involving the conversion of forest areas. With this commitment, Indonesian palm oil production should be achieving the deforestation-free status sooner, even before the 100% adoption of the mandatory ISPO.

As a member of the Council of Palm Oil Producing Countries (CPOPC) and to complement the strategy of targeting to produce deforestation-free palm oil, Malaysia has also announced to limit its oil palm cultivation to areas already approved for agricultural development. However, such land area is already diminishing in availability, and the announcement is essentially a de-facto moratorium on the expansion of  oil palm cultivation, leading to possible nation-wide production of deforestation-free palm oil. Just as in Indonesia, Malaysia is capable of producing 100% deforestation free palm oil ahead of the full adoption of its MSPO certification scheme, just by introducing a policy of no more conversion of new forest areas into agricultural use for expansion of oil palm cultivation.

Definition of Deforestation-Free

It is assumed that the concept of deforestation-free agricultural products like palm oil, soya oil and similar commodities must be defined to refer to future production of the commodities. If past deforestation that has been inevitably carried out to develop agriculture to plant soyabean, oil palm and similar crops is included in the definition, then all of the crops in EUROPE and other developed countries will be guilty of causing deforestation and are not deforestation-free.

An alternative definition of deforestation-free agricultural production is to draw a line as to how much forest must be kept by each country and allow some of the rest to be developed for agricultural use.  It is not possible to keep a country in its original state with  100% forest cover (excluding any natural desert area) because  agriculture land is needed to produce food and other commodities and some forest areas must be converted into agricultural land. A balanced and sustainable target for producing deforestation-free agricultural products can be proposed and that is to keep and conserve 50% of the country’s land area as forest or under tree cover. For countries which do not have 50% threshold as forest, they should attempt to undertake reforestation projects to achieve the threshold target. Defined in this way one can observe the inequitable level of forest to agricultural land ratio which gives great advantages to the developed countries to maximize on their agricultural production. These same countries who want a lot of forest should correct their past mistakes and reforest their land to an equitable level of at least 50% forest cover, while they can rightly demand that developing countries sacrifice the expansion of their agricultural production by not encroaching any further into their existing forest.

The current inequitable use of their land for maximum agriculture and minimum forest gives unfair advantage to the developed countries in trade for agricultural commodities.  However, if the 50% threshold is the minimum forest area to be conserved by all countries, trade in agricultural commodities will be conducted on a more level playing field. Without such equitable forest conservation threshold, it is clear that the developed countries are using their former forest land to produce agricultural commodities in excess of their own national requirements resulting in countries like  the EU and USA exporting excessive amount of (subsidized) agricultural products which distort trade competitiveness to the disadvantage of developing country exporters who have been asked to restrict their land use expansion  for agriculture and retain their present  forest areas.

In essence, the developed countries are right to demand for deforestation-free palm oil which the producing countries are capable of supplying, but developed countries are themselves not able to produce their own deforestation-free agricultural commodities for their local consumption and for export. The recent ban on the use of palm oil for biofuel in the EU is a classic example of the EU accusing palm oil producing countries of deforestation but they grossly overlooked that their agricultural areas were once forest areas which have been deforested. The EU must offer to apply only one definition on deforestation that applies to them and to others. If the EU chooses to disregard past deforestation for agriculture as  not counted as deforestation, then past deforestation by palm oil producing countries should  equally not to be associated with deforestation due to palm oil production as it is  part of needed agricultural development. For the future, palm oil producing countries are already declaring moratorium on palm oil expansion to new forest areas, and producing deforestation-free palm oil is assured. If the EU can commit to a definition of deforestation-free products to mean having a minimum 50% of their land as forest in order to remain sustainable, and allow the rest of the land for some agricultural use, then the palm oil producing countries are also in full compliance to such a standard. However, under this 50% minimum forest definition of deforestation-free standard, most of the western EU countries currently are guilty of deforestation linked agriculture and should not attempt to export their agricultural products  to other countries to consistently keep to their own  principle and RED2 law of avoiding importation or exportation of  deforestation based products. 

Palm oil is not the cause of deforestation

Whatever definition of deforestation-free agricultural products is used, palm oil producing countries are already able to produce and supply deforestation-free palm oil to the world market. The moral question to ask is whether agricultural products from the developed countries like the EU are themselves deforestation-free since these involved past deforestation of their land. Based on the chart of global agricultural land use which is indicative of past deforestation, shown in Figure 1, it is clear that palm oil is not the major cause of deforestation compared to beef, soya or other crops.

Figure 1 Global Agriculture Land Use by Various Crops and Commodities

The bigger moral question is whether the developed countries have left behind enough forest to claim sustainable and deforestation-free production of their agricultural commodities. Deforestation and reforestation are reversible processes, and there is no reason for the developed countries not to reforest and correct their past mistakes of excessive deforestation. The extensive agricultural developments have caused their forest areas to be below the 50% threshold. Palm oil is fortunately produced in compliance with both options of deforestation-free standards as defined above. Palm oil producing countries are able to conserve their land with over 50% forest cover while producing certified palm oil on part of their agricultural land in a sustainable manner, and it is a leading example for deforestation-free production of commodities for countries producing other agricultural commodities to emulate.