The RSPO was founded in 2004 when rapidly growing demand for palm oil led to deforestation and social ills in the two main producing countries, Malaysia and Indonesia, neither of which had adequate environmental regulations. This led to Western NGOs criticising and boycotting companies that imported their palm oil. As a result, multinational companies such as Unilever and oil and fat giant AAK joined forces with WWF and Malaysian Palm Oil Association to form the RSPO. The aim was to use certification to address corporate environmental and reputational problems, with a private sector initiative compensating for the lack of oversight in producer countries. This would “transform markets to make sustainable palm oil the norm,” as the RSPO’s slogan goes, end the destruction of ecosystems, and respect the rights of workers and local communities.
A worker sprays glyphosate herbicide around young palm trees. Despite significant challenges, the RSPO is now the world’s leading certifier of sustainable palm oil, with RSPO-certified palm oil accounting for nearly one-fifth of total production. Almost 90% of the EU’s palm oil imports are RSPO certified. With certified sustainable palm oil now the norm in the EU, the third largest market for palm oil, the two largest markets, India and China, are becoming increasingly important. Until these two countries expand the use of sustainable palm oil, the production of the commodity will continue to pose serious environmental and social risks.
Unlike the Roundtable on Sustainable Palm Oil (RSPO), which is corporate-driven and based on voluntary compliance, the Malaysian government enforces this government-imposed sustainability standard with penalties and sanctions. In addition, the MSPO (Malaysian Sustainbale Palm Oil) places a greater focus on smallholder farmers and avoiding deforestation. In the year it became mandatory, 87 percent of Malaysian producers were certified under the MSPO. This includes almost all organised smallholders and plantation companies and 39 percent of independent smallholders. Recently, the World Resources Institute noted that over the past four years, Malaysia’s deforestation rate has declined annually. This could possibly be a result of Malaysia’s forest management and conservation, which includes stricter law enforcement and mandatory moratoriums. What makes the MSPO a model for global sustainability is its ability to contribute to a nationwide conservation landscape to protect the natural landscape and endemic wildlife species. The Malaysian palm oil industry, with the support of the Ministry of Primary Industries and the Ministry of Environment and Water, has effectively created a model for sustainable development.
Today, the MSPO contains robust regulations on sustainability, conservation, human and labour rights, and women’s rights. Although there is always room for improvement, the Malaysian government has been very quick to respond to violations of MSPO regulations. Regrettably, while awareness of sustainable palm oil and MSPO has increased in the EU, there is still a lack of understanding of the metric and its successes. In fact, Global Policy magazine found that progress on MSPO certification is “double the EU’s outdated estimate,” resulting in a certification process that is “far more substantial” than EU policymakers currently realise. Addressing this shortcoming is a top priority because, as a University of Bath study published in Nature Sustainability found, banning palm oil as the EU has done would actually increase deforestation.