and RSPO Standards Aim management; technical guidelines for The Indonesian Sustainable Palm Oil palm oil cultivation and processing; Standard, Malaysian Palm Oil Standard, environmental management and and Roundtable on Sustainable Palm Oil monitoring; responsibilities for Standard have been developed to workers; social and community ensure sustainability in palm oil responsibility; strengthening cultivation and supply chains. Buyers community economic activities; and may encounter these certifications sustainable business development. By while sourcing sustainable palm oil. design, ISPO criteria are strongly This document was developed by Efeca aligned with existing legal and to outline the key differences between regulatory requirements, and for this the standards and aid buyer decision- reason the ISPO is sometimes referred making. to as Indonesia’s “legality standard” for palm oil. The system relies heavily on Indonesian Sustainable Palm Oil AMDAL – the Indonesian Environmental (ISPO) Standard Feasibility Assessment, in its The Indonesian Sustainable Palm Oil requirements. (ISPO) standard, introduced in 2011 by Because of its national reach, ISPO the Government of Indonesia, is offers the potential of improving the designed to ensure that all Indonesian entire Indonesian plantation industry. oil palm growers, not just those exporting to foreign markets, conform However, this will take some time. By to higher agricultural standards. Based December 2015, 400 oil palm plantation companies were awarded ISPO on existing Indonesian legislation, it certificates. Voluntary implementation aims to improve the sustainability and of ISPO for independent smallholder competitiveness of the Indonesian palm oil industry, whilst contributing to the farmers began in 2015, and the Ministry Indonesian government’s commitments of Agriculture has set a target for mandatory ISPO certification by 2022 to reducing greenhouse gas emissions. for smallholders. See the ISPO website It is mandatory for all oil palm growers for more information. operating in Indonesia to adhere to the Standard, from large plantation Malaysian Sustainable Palm companies to smallholders, although requirements for each vary. Large Oil (MSPO) producers were required to comply The Malaysian Sustainable Palm Oil with the standards by 2014, or face (MSPO) standard is a national penalties and risk losing their license to certification standard created by the operate. Malaysian government and developed with input from stakeholders in the The seven principles of the ISPO are: palm oil industry. First launched in licensing system and plantation November 2013, it officially came into
Comparison of the ISPO, MSPO and RSPO i Efeca
implementation in January 2015 and Accreditation of Certification
aims to issue 1000 certifications by the Body (ACB) for oil palm management end of 2016. It aligns the management system along the supply chain from of palm oil production with many Standards Malaysia. The MSPO standard existing national laws and regulations, will be up for review in 2018. although unlike ISPO, it is not currently mandatory. According to the Malaysian The standard documents are currently Palm Oil Board (MPOB), which oversees available to purchase online. See the it, the standard was launched in order MSPO website for more information. to help small and mid-range cultivators, who historically could not afford RSPO Roundtable on Sustainable Palm certification, to operate sustainably. Oil (RSPO) The Roundtable on Sustainable Palm Oil The MSPO standard is split into four (RSPO) is the main certification parts: general principles, general standard for the use of palm oil and its principles for smallholders, general fractions in food and oleo-chemicals. principles for palm oil plantations and Currently 20% of palm oil worldwide is organised smallholders, and general RSPO certified. Founded in 2004, it is a principles for palm oil mills. It follows multi-stakeholder, non-profit group that seven principles on the themes of unites seven sectors of the palm oil ‘Management’, ‘Social Equity’, industry in regular dialogue, including ‘Environmental Protection’ and investors, growers, retailers and NGOs, ‘Economic Progress’. These include using a consensus voting system to management and commitment develop standards and criteria on an responsibilities; transparency; on-going basis. It uses a business-to- compliance to legal requirements; social business model to encourage the responsibility; health, safety and adoption of sustainable practices by employment conditions; environment, members (particularly producers) and natural resources, biodiversity and promotes the uptake of certified ecosystems; best practices; and sustainable palm oil internationally. development of new planting. While voluntary, it requires that Traceability is based on the RSPO companies abide by national laws and supply chain models of identity requirements. preserved, segregated and mass balance palm oil. The Principles and Criteria, which form the basis of the RSPO certification In 2015 the Malaysian and Indonesian scheme, comprise eight basic principles: governments announced a plan to Commitment to Transparency; merge their two national sustainability Compliance with Applicable Laws and standards – ISPO and MSPO – to form Regulations; Commitment to Long–term the ‘Council of Palm Oil Producing Economic and Financial Viability; Use of Countries’ (CPOPC), with the aim of appropriate Best Practices by Growers coordinating control of the palm oil and Millers; Environmental market. The MPOB is also working for Responsibility and Conservation of MSPO certification to be recognised by Natural Resources and Biodiversity; importing countries, and to obtain Responsible Consideration of endorsement for the MSPO Employees and of Individuals and
Comparison of the ISPO, MSPO and RSPO ii Efeca
Communities Affected by Growers and Comparison of the
Mills; Responsible Development of New Standards Plantings; and Commitment to While the principles and criteria are Continuous Improvement in Key Areas structured differently across the of Activity. In order to claim compliance standards, they cover a similar set of with the P&C and achieve RSPO general themes: legality, environmental certification, growers must be assessed responsibilities, social responsibilities, by a third-party RSPO-accredited and business practices. The ISPO and certification body every five years, with MSPO, which are considered by some to an annual audit for continued be more streamlined and practical to compliance. The current P&C can be implement, have far fewer criteria than found here on the RSPO website, with a RSPO, which in some instances requires breakdown of the indicators and companies to go beyond what national guidance on how to become certified. law dictates.
Members of the RSPO must submit The greatest difference between RSPO Annual Communications of Progress and ISPO/MSPO is the inclusion of (ACOP) reports in order to assess their directives on business practices and progress towards producing and plantation management, requiring a procuring RSPO-certified sustainable commitment to transparency and palm oil to any of the four supply chain ethical conduct in business operations models for RSPO Certified Sustainable and transactions. The ISPO/MSPO Palm Oil (CSPO): identity preserved, mention this topic, but do not make it an segregated, mass balance, and book and explicit principle. RSPO is also far more claim (see here for more information on transparent in its standard supply chain models). A crucial development and auditing results than component of the ACOPs are Time- both the ISPO and the MSPO, and as it is bound plans (TBPs), in which members not legally binding, it is more flexible to must state clear timelines for producing change. or sourcing 100% RSPO CSPO.
Main areas of difference are outlined RSPO NEXT, which was launched in below. 2015, is a voluntary commitment in addition to the existing P&Cs and Environment incorporates more stringent assessment RSPO has the most clearly explained standards, with guidelines regarding and strongly worded principles, criteria, deforestation, fire, peat, human rights indicators, guidance and requirements and landscape approaches, among other for compliance with environmental issues. See here for more information on provisions. ISPO/MSPO rely heavily on RPSO Next. national legislation and are comparatively liberal and undetailed. For example, RSPO has the most comprehensive EIA requirements, while ISPO and MSPO’s are vague.
High Conservation Value Land
RSPO is the only standard to adopt a
Comparison of the ISPO, MSPO and RSPO iii Efeca
High Conservation Value (HCV) New Planting Cut-off Dates
approach that is clearly defined. ISPO Cut-off dates after which plantations are requires HCV identification, but does considered “new plantings,” and for not define identification procedures which specified criteria may apply, are clearly. However, ISPO states that HCV handled differently by the standards. areas cannot be cleared - RSPO requires RSPO has a cut-off date of November that HCVs be maintained or enhanced, 2007, after which new plantings should but minimum requirements for not replace primary forest or areas maintaining HCVs are subjective. MSPO required to maintain HCV areas. Areas does not mention HCV protection. cleared after this are unable to become certified unless an RSPO-approved RSPO also has the strongest biodiversity compensation plan is developed (in line measures, relying heavily on the HCV with its newly released guidance for process. ISPO appears to provide the compensation). ISPO and MSPO do not least stringent overall protection for have cut-off dates for applicability for biodiversity in land zoned for any criteria. agriculture, relying on the EIA and undefined HCV safeguards to protect Social biodiversity. The MSPO states that High On social themes, RSPO ranks most Biodiversity Areas must have highly. It has the most comprehensive management plans, and that oil palm Social Impact Assessment (SIA) should not be planted on land with high requirements, strongly emphasizing a biodiversity value unless it is carried participatory process. ISPO relies on the out in compliance with the national AMDAL process for SIA and does not biodiversity legislation. provide extensive requirements for a management system. MSPO requires a Peatland social impact assessment and a system RSPO encourages members to make for complaints but this is not outlined in voluntary commitments to avoid great detail. peatlands but does not prohibit planting on peat. ISPO allows planting on peat but only under specified conditions; Free, Prior and Informed Consent peat may not be developed where >70% (FPIC) of the concession is >3 m deep. Where The ISPO makes no explicit reference to peatlands are developed for oil palm, applying “free, prior and informed ISPO requires adverse impacts be consent” (FPIC) standards during a avoided and water levels maintained at plantation land acquisition process, specified levels; RSPO requires although there is an explanation implementation of Best Management regarding land conflict settlement and Practices (BMPs) for peatland compensation. MSPO mentions that management. MPOB has developed FPIC shall be recorded, and RSPO guidelines for best practices on provides detailed guidelines related to peatland, as state law allows planting on FPIC. peatland that has been gazetted for agriculture use. Worker’s Rights ISPO does not have a requirement for employee/worker contracts, and only
Comparison of the ISPO, MSPO and RSPO iv Efeca
states that employees/workers must be ISPO have established
enrolled in the government’s social complaint procedures, but details of the security program, as per applicable systems and timelines for resolution regulations. RSPO provides detail and vary across the standards. In general, guidance on worker rights and health grievance mechanisms appear to be and safety. MSPO requires a policy on best defined under the RSPO system, workers rights, in accordance with and have gone through a process of national standards, and provides some evolution based on lessons learned over detail on what this should entail. MSPO the past several years. RSPO provides also requires compliance with national on-line status updates and a relatively occupational safety and health high level of transparency throughout legislation, but independent the complaint resolution process. smallholders need not have a formal health and safety plan. For independent References smallholders with temporary workers, it states that work conditions shall be in Adnan, Hanim (2015) Newly- accordance with a mutual verbal implemented Malaysian Sustainable agreement “made transparently and Palm Oil Means More Business, Jakarta freely.” Post.
RSPO prohibits the use of forced labour, Brandi, et al. (2013) Sustainability and MSPO refers to labour laws that Certification in the Indonesian Palm Oil prohibit the use of forced labour. ISPO Sector, Deutsches Institut für makes no mention of forced labour. Entwicklungspolitik. MSPO allows child labour on family farms, “under adult supervision, and Indonesia Palm Oil Platform (InPop) when it does not interfere with their Newsletter (2015), UNDP. education.” Finally, RSPO is the only standard that specifically has a policy Indonesian Sustainable Palm Oil aimed at protecting women in the Standard (2016) workplace – though MSPO prohibits sexual harassment and violence at Mahmud, Shahnaz (2014) Malaysia’s work. Push for Sustainable Palm Oil Success, Global Ag Investing. Compliance RSPO, ISPO and MSPO rely on third Malaysian Sustainable Palm Oil Standard party accredited auditors to carry out (2016) certification. RSPO and ISPO require full compliance with all criteria in order Paoli at al. (2014) A Comparison of to be certified, or an approved time- Leading Palm Oil Certification Standards bound plan for addressing minor non- applied in Indonesia, Daemeter compliances. MSPO requires that Consulting. internal audit procedures and results are documented and evaluated, in order Roundtable on Sustainable Palm Oil to implement necessary corrective (2016) Impacts action through continuous improvement action plans. RSPO and
Comparison of the ISPO, MSPO and RSPO v Efeca
Sustainable Palm Oil Transparency
Toolkit (SPOTT) (2016) Standards and Certification, ZSL.
Winarni et al. (2014) Beyond EU, RSPO and ISPO Sustainability Requirements, Perkumpulan Transformasi untuk Keadilan Indonesia.