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UPDATE 1-Indonesian Palm Oil Association quits RSPO membership
October 3, 2011 / 10:41 AM / 6 years ago

UPDATE 1-Indonesian Palm Oil Association quits RSPO membership

* Gapki to concentrate on ISPO scheme

* RSPO regrets Gapki’s decision

* Europe palm oil buyers say RSPO to remain international marker (Updates throughout, adds detail)

JAKARTA, Oct 3 (Reuters) - The Indonesian Palm Oil Association (Gapki) has withdrawn its membership from the Roundtable on Sustainable Palm Oil (RSPO), after the world’s top producing country forged ahead with its own sustainability scheme, both groups said on Monday.

The RSPO is an industry body of consumers, green groups and plantation firms that aims to promote use of sustainable palm oil products and many major European palm oil buyers say the RSPO will continue to be the international sustainability benchmark.

Many palm oil producers have criticised the RSPO for being too much in favour of green groups, and both Malaysia and Indonesia are pushing on with their own schemes.

“We have been considering resigning from RSPO through a long process of discussion involving board of (our) directors and board of commissioner,” Fadhil Hasan, executive director of Gapki told Reuters.

“Finally, we decided to resign from RSPO because we already have ISPO,” he said. “We sent the letter of resignation on Thursday last week.”

Unlike the RSPO, the Indonesia Sustainable Palm Oil (ISPO) will punish by law those found to be breaking ISPO rules, a ministry official said last November.

ISPO auditors will examine the entire operations of palm oil firms as part of its certification.

“We choose ISPO because it is mandatory and every palm oil producer has to follow ISPO,” said Hasan. “The RSPO is voluntary.”

Palm output in Indonesia, which overtook Malaysia as No. 1 palm oil producer in 2007, is expected to be 23 million tonnes and exports will be about 17 million tonnes this year, the Indonesian palm industry forecasts.

“It is regretful that an association representing Indonesian palm oil producers has decided to relinquish their presence in RSPO,” the industry group said on its website. “However, we accept their decision as the RSPO is a voluntary membership based organisation.”

The RSPO said its secretariat is working closely with Indonesian producer members to have an interim representative for Indonesian growers on the RSPO Executive Board until a new representative is formally chosen at the RSPO General Assembly in November.

CLIMATE CHANGE

The industry has come under increasing pressure to improve practices and halt deforestation blamed for speeding up climate change, ruining watersheds and destroying wildlife.

Sinar Mas Agro Resources and Technology (SMART) , which runs the Indonesia palm oil operations of its Singapore-listed parent Golden Agri-Resources , was given a mixed score card last year in an independent environmental audit after Greenpeace accused the firm of clearing peat land and forests that sheltered endangered species.

The palm oil producer said in February, however, it would work with the government and a non-profit body, and Golden Agri then developed a Forest Conservation Policy (FCP) in collaboration with The Forest Trust (TFT), a non-profit organisation that seeks to promote green business methods.

Last month, Nestle , the world’s biggest food group, resumed palm oil purchases from SMART, showing that the palm oil firm’s efforts to boost its green credentials by teaming up with a conservation group have paid off.

Before this, an Indonesian moratorium on new permits to clear forests, came into force in May for an initial two years.

The RSPO has set up green standards for production, with volume of its certified sustainable palm oil on the market rising from 1.3 million tonnes in 2009 to 2.2 million in 2010.

RSPO-certified crude palm oil production capacity is about 5 million tonnes a year, or 10 percent of global output, the body’s head said last month. (Reporting by Yayat Supriatna and Michael Taylor)

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