How can oil palm regain legitimacy? The simple answer is by doing palm oil right in a way that respects planetary boundaries (i.e. mitigates climate change and prevents biodiversity loss) and drives development outcomes (i.e. is good for people too). We do more or less know how to do this on an individual plantation level. IDH for example has a great track record on using landscape-level thinking to drive sustainable production.
But individual plantations here and there are really only a start. The sector needs to think about it’s legitimacy as a whole – coordination and dialogue help (like the SPOD’s), but what helps more are decisions, actions and frankly managerial (and government!) agency. In other words, let’s look at this from a process perspective.
Here are some thoughts. And a handy table to guide them:
From a really simplified perspective there are four different scenarios for palm oil.
The first pathway is “avoidance”. What does this mean? What is being avoided? Legitimacy problems (and governance efforts). Essentially, in this scenario the sector through it’s actions (and by way of the actions and agency of governments and some customers) actively design and conduct their business in a way that tries to avoid, or “de-link” the business from legitimacy processes that are uncomfortable, costly or appear to be difficult.
As an example here we can think of the work being done to increase market access in India for example. In the avoidance scenario, the thinking that “we don’t need these [western] markets” is strong. Palm oil is even more than now a nationalist issue in political terms. A source of pride (as I agree it should be) but also a reason to not cooperate or work together with others to address global challenges like climate change. MSPO and ISPO exist but as rubber stamps. RSPO? Who care’s about them?
The problem with this scenario is that from the perspective of the most developed countries (and hence, the most valuable markets), palm oil will be increasingly marginalized as the poor peoples forest burning fast food anti human oil. And I know that for many producers it already feels this way. Bad news: It can be even worse.
I can see this scenario resulting in even Chinese state banks being hesitant to invest in oil palm or oil palm derivative industries without a significant shove from the central government and horsetrading and concessions by the Malaysian and Indonesian Governments. Even now Palm oil can still get funding from the “west” if the sustainability programs are robust enough. This will dry up.
Market access declines. Palm Oil is sold in the poorest countries with less refining and value added. It attracts less and less research – and becomes less and less attractive as an employer. It falls further behind on mechanization (“automation” haha) and productivity declines further. As a sector it becomes dependent on the government for market making and handouts. Employees wages decline in relation to the rest of the economy, and
What if things stay the way they are? How about the status quo? We would still have a small amount of sustainable palm oil available on the market, but unfortunately, sustainable palm oil just isn’t legitimate enough to stay relevant, except for those customers who have no alternative… And that’s a false hope. Of course there are alternatives. Palm oil has wondrous properties that make it versatile and stable for innumerable applications, but even RSPO certifies sustainable palm oil is being replaced or it is not used at all in new products. The market is shrinking and has been for the better part of a decade. The EU is accelerating PO’s market share decline. All this is not good news for the planet ether – as the WWF and others have pointed out years ago now – the alternatives are often worse for biodiversity and deforestation. Which, given how Palm used to be (and is too often still) done, is pretty effing terrible.
So we don’t want that.
What happens if the governance efforts start to have a bit more traction? The RSPO becomes relevant again (it isn’t? … well I have thoughts. maybe they’re wrong. new post someday). MSPO begins to mean something too. Some of the bigger, better (UP, Unilever, …) planters make the right noises and really do most of the right things. But all to many others just continue as before. Some products make it through the EU’s deforestation checks. Many don’t. But those that don’t don’t care because there still isn’t enough of a difference in ROI for them to care. And palm oil isn’t legitimate enough that more money would seriously come in to turn plantations around.
What scenario is this? Divergence. The industry splits into two. A “sustainable” part, and a bigger “bulk” part. This is the original aim of the RSPO (minus the “premium price” incentive). It was also what the POIG tried to achieve. On one side we’ll have segregated supply chains and dialogue. On the other, I/MSPO is the best we can expect; mostly it’ll be a continuation of the status quo with elements of avoidance.
Unfortunately this won’t help the sustainable part of the industry much. Sure, certain producers, and maybe regions will begin to be seen as sort of vaguely ok (like “Tuscan olive oil is better than Spanish which is better than Bulgarian” – not really true, but people like simplifications.) And yes. In this scenario some companies (or countries) have achieved legitimacy for their palm oil. But many others did not, and are not engaged seriously in sustainability. Hence the divergence. And the bad news from the unsustainable “we’re doing what we always do”-sector will crowd out the good news.
Is this the most likely scenario? No. I don’t think so. Status quo for the win. mostly. Unfortunately I’m seeing a push towards the avoidance pathway. Not really from the sector, but from some of the legitimacy processes ongoing in Malaysia in particular. Yes. I do mean politics.
What should we want to happen?
Well a transformation of course! Using academic/policy terminology what I mean is we need to create a situation where a sustainability transition occurs and it happens rapidly and effectively. And that transition brings with it the vast majority of production. Indeed. I think it must be producer led in-order that we engage the largest possible part of the sector in taking the right steps and actions. Using that agency we producers have to create impact and make changes. I know I’m not the only one thinking like this – I’ve met many others who have the same views and have held them for longer! Former colleagues among them!
This transition needs to be based on two things. The planetary boundaries (obviously) and on radical transparency. We’ve talked about traceability for years. It’s still far from effective. But we as planters could actually track bunches from the tree to the final product. It is not hard to do. We already track from the block! Is this data so critical that we mustn’t share it? If we are a good company, with good productivity why not? And if we aren’t, well, it’s time to get our act’s together. Management has agency – problems are solvable if we think about solving them. If we expect the solution to come from Bangladesh or somewhere else and be willing to work silly hours… that is no solution at all. Neither is the drone with the chainsaw. That will still take two hours to cut a bunch. And it still won’t work right in the rain. And come on. A drone with a chainsaw (or Laser!), do we need those to be widely available? (Stop – I can debate harvesting tech longer than most from a far stronger knowledge foundation too).
Planters are perfectly capable or transitioning their sector to sustainability. Enough of us just need to want to do it, and take those steps.
And what happens to our legitimacy? Well. If it’s almost all of us… it begins to recover. We will become compliant. we will become more and more productive with lower and lower emissions. we will address yield gaps, and we will restore wetlands and forests. And we will grow.
More in the dissertation when I finish it. More coming here. Eventually. About strategising in legitimacy processes for individual companies – that might be the next post. I was writing this one for a week.
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And some other related thoughts:
I’ve set up the table to focus on the impacts using the traditional 3P’s of sustainability – and yeah… In my view, culture is a people thing. Yes. I read the literature, yes it’s important, yes I get the foundation stuff, but my perspective is not that. This is easier to understand and communicate. That makes it more effective.
And what is the basis for my scenarios you ask? My job since about August 2017 has been to think about palm oil legitimacy and transition to sustainability. Full time. sometimes morning to night. in the shower and in the field.
I’m really a true planter, I was involved with GVL in Liberia on and off as an insider/outsider from 2008/9 till about 2017. I do know GAR. I know people in IOI, Unilever. I was also an academic in a Nordic university. I’ve had people turn around and walk away at conferences because I’m looking at palm oil sustainability from an insider’s perspective. I’ve been challenged on whether I truly care about sustainability or am I just another green-washing service provider. Sometimes it’s fun; to be the palm oil guy who says I agree.