Sustainable Palm Oil - Pro

SUSTAINABLE PALM OIL A CHALLENGE – PRO

KARTIBAN ASOKAN

SITI INSYIRAH BINTI ALI

JUWAIRIAH BINTI HARIS

THARANI A/P RENGASAMY

ANAS MOHAMMED

KORNTIP KOKYAI

INTRODUCTION• Increasingly common raw material for food and

non-food product• 1 in 10 products contains palm oil in some form• The demand of palm oil have increased due to

usage in bio-fuel, thus it becomes 2nd most consumed oil after soybean oil • Its cheaper, easier to store(room temperature)

WHAT HAPPENS DUE TO FARMING OF PALM OIL

• Loss of rainforest in Malaysia and Indonesia, tropical forest and peat land are cleared • Within the next 15 years almost all of the rainforest

will be disappeared • Disappearance of rare species, Orangutan and

Sumatran tigers• Escalate the climate change

HOW TO HAVE A SUSTAINABLE PALM OIL ???• In 2001, the WWF had set up The Roundtable on Sustainable Palm Oil (RSPO)• To establish standards for producing and procuring palm oil in a sustainable

manner• RSPO promotes the production and uptake of sustainable palm oil through

cooperation and open dialogue with its stakeholders with the ultimate goal of transforming markets to make sustainable palm oil the norm

• the most advanced standard setting platform that is dedicated to the sustainable production of a single commodity

• Today, the RSPO comprises 1,400 members covering the entire supply chain of an extensively used and traded commodity

• As of late 2013, there are 14 Malaysian plantation companies with 105 palm oil mills that are RSPO-certified.

QUESTION 1The Roundtable on Sustainable Palm Oil is a multi-stakeholder initiative. What actors need to be part of the

initiative for the problem to be addressed in an effective way?

Stakeholder categories within

RSPO

Palm oil growers

Palm oil processors and traders

Bank and investors

Consumer goods

manufacturersRetailers

Social and development

NGOs

Environmental NGOs

Develop, gather and publish uniform ESG performance

dataUndertake awareness raising and more in-depth education

Share and develop best practice analytical and

investment tools

Be flexible in its membership cost

Clarify what the RSPO requires in terms of commitments and actions to transform the palm oil industry

WHAT RSPO SHOULD DO?

Stakeholders ActionAsset Owners Refine Requests for Proposals to include ESG and palm oil

specific criteria. Asset Managers Engage collaboratively with their Asian counterparts.

Buy-side Analysts Fund detailed coverage from specialist research providers.

Sell-side Analysts Include material ESG risks and opportunities into their analysis.

Investee Companies Respond to analyst requests for ESG metrics being reported.

Financial Intermediaries Support decision-making tools with impactful reporting.

Extra-financial Research Providers

Supply regular and consistent ESG content beyond questionnaires

Market Data Providers Embed metrics and key performance indicators for CSPO.

NGO Community Provide succinct key performance indicators, tools and research.

RSPO Work on data transparency.

QUESTION 2WHAT IS HINDERING THE DEVELOPMENT OF SUSTAINABLE PRACTICES IN THE PRODUCTION OF PALM OIL?

ENVIRONMENTAL SIDE EFFECTS• Oil palm cultivation on land that was previously covered with peat-swamp

forests, primary forests or other high conservation value areas.

• Such areas, already under pressure from other factors such as logging, are highly valued for their biodiversity and their capacity to sequester carbon dioxide.

• Forest parcels are sometimes cleared by fires, which can burn out of control.

• The building of roads through forests has been blamed for hindering the migration of endangered species and exposing them to human activities.

SOCIAL SIDE EFFECTS

• Increasing number of communities who legally farming/living in the plantation affecting the area of plantation.

• Several reports of plantations that violates workers’ right (e.g: fair payment, safe working condition, freedom to unionize)

QUESTION 3WHAT DEVELOPMENT HAVE TO TAKE PLACE TO MAKE THE PRODUCTION OF PALM OIL MORE SUSTAINABLE?

• Choose certified sustainable palm oil • What is certified sustainable palm oil?• Palm oil that was certified by the RSPO through criteria that can help to

reduce the negative impacts of palm oil cultivation on the environment and communities

• Buy the products with certified sustainable palm oil – indirectly can encourage nature conservation

• No primary forests or areas which contain significant concentrations of biodiversity (e.g. endangered species) or fragile ecosystems, or areas which are fundamental to meeting basic or traditional cultural needs of local communities (high conservation value areas), can be cleared.

Socially acceptable Technologically appropriateEconomically viableEnvironmentally compatible

Conclusion

VEGETABLE OILS ARE INCREASINGLY POPULAR

Source : Roundtable on Sustainable Palm Oil (RSPO),2012

WHY IS PALM OIL SO POPULAR?


Relatively cheap

Most widely

produced

Most versatile

Highest yielding

Why say yes to sustainable palm oil instead of no to palm


Fulfills increasing global food demand

Supports affordable food prices

Supports poverty reduction

Safeguards social interests, communities and workers

Protects the environment and wildlife



Producers will switch to other

oils which require 4-10

times more land for the same amount of

output as palm oil

Producers will switch to other oils which are

relatively move expensive

Livelihoods and income

will be impacted as oil palm is widely cultivated by a

significant number of

smallholders in developing

nation

Social issues will just shift to other vegetable

oils that face similar

concerns

CONSEQUENCES OF ERADICATING PALM OIL

Source: http://www.betterpalmoil.org/what


Source: http://www.betterpalmoil.org/what

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Sustainable Palm Oil - Pro