Green Development Oil Newsletter: Special Edition: RSPO GA8 – Issue 18, March 2012

General Assembly 8 – watershed moment for WWF and the RSPO

The re-run of the eighth General Assembly of the Roundtable on Sustainable Palm Oil (RSPO) was a watershed moment for the organisation.  The interests of palm oil producers have been ignored by other members of the RSPO.  Is this the moment that RSPO becomes a vehicle of WWF and their ambition to control and transform markets?

The General Assembly of the RSPO was held on the 8th March in Kuala Lumpur.  The meeting was a re-run due to the failure to achieve a quorum of members at the initial GA8 in November 2011.  The results from the re-run meeting represent a fundamental shift in the organisation’s standards away from the interests of palm oil growers and producers.

RSPO is a standard set up by WWF and used by the environmental NGO to pressure companies along the palm oil supply chain to adopt WWF sustainability standards.  The recent General Assembly was the moment that WWF displayed its true colours and showed their real intent for the RSPO standard.

Prior to the meeting, WWF paid for an advertisement in Newsweek accusing the palm oil industry of deforestation.  This is a deliberate strategy by WWF to pressure producers into joining RSPO by portraying the industry as environmentally harmful.

This move represents a marked shift in WWF’s tactics.  WWF likes to portray itself as the “good cop” as opposed to the “bad cop” represented by Greenpeace, Friends of the Earth and the Rainforest Action Network.  WWF prides itself on being able to work with the entire industry.  This latest move by WWF to campaign against the palm oil industry makes it clear that WWF is seeking to pressure and capture all suppliers – including those smallholders who cannot afford certification.

The conclusion that WWF was becoming more active in its role in WWF was confirmed when RSPO voted to adopt a new mission and vision statement which mirrors WWF’s campaign to ‘transform markets’.  World Growth has previously released a report outlining WWF’s ambitions and tactics to ‘transform markets’.

The new mission statements reads: “RSPO will transform markets to make sustainable palm oil the norm”.  This was not a purpose of RSPO when it was established on the basis of an agreement among producers, NGOs and other interests to set up a system to provide voluntary certification of sustainability.  The goal of “transforming markets” is a declared WWF strategy to capture supply chains.

This new mission goes far beyond setting up RSPO as a voluntary certification scheme as was originally proposed and marks a large shift for RSPO members as it publicly acknowledges and embrace WWF’s attempts to control and manage supply chain to meet WWF’s goals.

The Malaysian Palm Oil Association put forward a number of recommendations at the General Assembly which sought to rebalance RSPO’s decision making, but all of these recommendations either failed to pass or were withdrawn.  This included a resolution which called for RSPO to cease the certification of new palm oil plantations until all current supply of sustainable certified produce had been bought – despite the RSPO ‘Growth Interpretation Narrative’ 2011 recognizing that only 52 per cent of CSPO is currently being bought.

The only recommendations to be passed were those backed by the RSPO Executive Body; a group of large retailers, bank, NGOs and producers; and a recommendation backed by a group of environmental NGOs.

It is clear from the General Assembly that non-government organisations, palm oil purchasers, the banks and palm oil traders have joined forces to favour their interests, rather than the interests of palm oil producers.

GA8 represents a watershed moment for RSPO – the moment when the balance of control of the organisation has shifted to rest with NGOs, banks and retailers, and away from the growers and processors.  GA8 also represents the moment when RSPO went from being an organisation run on a consensus basis to an organisation which now implements the agenda of WWF.

WWF’s strategy is clear – it is using RSPO as a tool to entrench their sustainability standards as the norm for the entire palm oil industry and intends to continue attacking the industry until all growers conform with those standards.  WWF, through RSPO, is seeking to regulate the market for palm oil.


RSPO General Assembly will no longer be a democratic process

The General Assembly of the RSPO passed resolution 6c which sought to reduce the number of members required for a quorum from 50 per cent to a mere 80.  80 members currently represents a mere 13 per cent of RSPO members, lowering the standard of participation and representative democracy in the RSPO even further.

The resolution, which was put forward by representatives from retailers, banks and non-government organisations – including three large palm oil producers – sought to reduce the number of representatives required to make quorum at the Annual General Meeting from one half of members to just 80 members.  There are currently 604 ordinary members of the RSPO.  The resolution also sought to increase the number of members required to call an Extraordinary General Meeting from one fifth to one quarter of ordinary members.

The resolution was bought forward in light of failure of the General Assembly to achieve a quorum at last year’s meeting.  The resolution states that the number needed for a quorum should “approximate the largest number that can be depended on to attend any meeting except in very bad weather or other extremely unfavourable conditions”.

The fact that the General Assembly passed this resolution is indicative of a growing disinterest in the undertakings of the organisation.  However, the resolution also represents a further threat to the good governance and consensus-building approach of the RSPO.  Furthermore, increasing the numbers required to call an Extraordinary General Meeting reduces RSPO member’s access to recourse to review and rescind decisions which they disagree with.

As WWF, environmental NGOs, retailers and banks tighten their grips on the decision-making process within RSPO, smaller growers and producers are being marginalised.  World Growth has long warned that WWF’s strategy is to create a sustainability standard, attract members then use their influence to tighten the standards required from growers and producers.  RSPO has clearly entered this next phase.


New resolution on time bound plans targets growers and processors

A resolution put forward by WWF and a number of other environmental interest groups has tightened the standards for growers, traders/processors, consumer goods manufacturers and retailers.  While the new resolution appears to treat all groups equally, a closer look at the detail makes it clear that the resolution is actually targeting growers and processors.

The resolution, put forward by the Zoological Society of London, WWF International, Conservation International and Fauna and Flora International, proposed that all members from the growers, traders/processors, consumer goods manufacturers and retailers sectors of RSPO submit a ‘time-bound’ plan for the purchase, production or use of certified sustainable palm oil by General Assembly 9.

Currently, 70 per cent of manufacturers and 76 per cent of retailers have submitted a time bound plan of when they will use 100 per cent CSPO.  That percentage is lower for growers (66 per cent) and processors (43 per cent).

The requirement to submit a time bound plan before the next General Assembly is a move to directly counter the public statements from the Malaysian Palm Oil Association that palm oil growers cease certifying new oil palm plantations until the demand for CSPO meets the current supply.  Under this plan, if growers or processors fail to meet their time bound plan because there is insufficient supply, they will be held to be in non-compliance with the Code of Conduct.

The time bound plan is also required to be “sufficiently challenging”.  However that term remains undefined.  Given the desire of the RSPO to lock growers and processors into the RSPO system, there is no guarantee that different standards of ‘sufficiently challenging’ will not be applied different classes of RSPO members – again leaving open the possibility that growers and processors will be held to more exacting standards than retailers or manufacturers.


WWF strategy – markets controlled, not market driven

Voluntary certification systems have been touted for a long time by WWF to demonstrate that they were pro-market & market-friendly.  So far none of the WWW sponsored systems have won market support.  Consumers will not pay the cost of the “sustainability premium”.  The WWF strategy now is to capture and direct the markets and dictate to consumers and producers; and to pressure governments to regulate compliance with their systems.

As in the climate change debate, it became a mantra in WWF marketing to business to emphasis it relied on market instruments to advance its sustainability goals.  It was always bogus.  At the heart of every WWF strategy lay the determination to regulate compliance with environmental goals.

WWF used to argue that its forestry certification system, the genesis of RSPO and other systems, would assist producers because environmentally aware consumers would pay premium for products endorsed as sustainable.  This has not happened and today WWF has dropped this line.

The uptake of its certification systems, despite the marketing hype, has been poor.  The biggest system, the Forest Stewardship Council, only certifies half the forestry of the world’s leading system the Program for Evaluation of Forest Certification.  That system, unlike FSC, is not controlled by NGOs.

Companies which join the WWF sponsored certification systems are either pressured into joining or, once in, find themselves overtime pressured to adopt tougher and tougher standards to which they did not originally subscribe.  Some, like Unilever in the case of RSPO, have become activist partners with WWF.  Others are encouraged to go along, regularly being presented with attacks on brand names of competitors by other NGOs like Greenpeace and Friends of the Earth, the clear implication being they are at risk of the same thing.

RSPO is not financially viable.  The current strategy is to use funding from the sale to some of its business members of palm oil certificates to mount a PR campaign, the aim of which from the distance appears to be to pressure corporate members to buy more certified palm oil.  (Currently half of the pool of certified oil remains unpurchased).

Now WWF and Unilever are pressuring European Governments to urge the European Commission to lower tariffs on RSPO certified palm oil.  The Unilever President of the RSPO has even stated publically that since the market won’t deliver, governments should.

EC trade officials in Brussels will not want to venture into that territory.  They will find themselves under challenge in the WTO.  Unilever would have understood that once.  It was once the leading advocate of free trade in Europe.  Today it is advocating “sustainable trade”.  This is the talk of aspiring monopolist.  No wonder it feels comfortable with the WWF strategy to capture markets.

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