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 2
nd
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 1
The 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
manufacturers
Retailers
Social and
development
NGOs
Environmental
NGOs
Develop, gather and publish
uniform ESG performance
data
Undertake 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
Stakeholders Action
Asset 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 2
WHAT 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 3
WHAT 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 appropriate
Economically viable
Environmentally compatible

Conclusion
VEGETABLE OILS ARE INCREASINGLY POPULAR
Source : Roundtable on Sustainable Palm Oil
(RSPO),2012
WHY IS PALM OIL SO POPULAR?
Source : Roundtable on Sustainable Palm Oil
(RSPO),2012
Relatively
cheap
Most
widely
produced
Most
versatile
Highest
yielding

Why say yes to sustainable palm oil instead of no to palm
Source : Roundtable on Sustainable Palm Oil
(RSPO),2012
Fulfills increasing global food demand
Supports affordable food prices
Supports poverty reduction
Safeguards social interests, communities and workers
Protects the environment and wildlife

Why say yes to sustainable palm oil instead of no to palm
Source : Roundtable on Sustainable Palm Oil
(RSPO),2012
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

Why say yes to sustainable palm oil instead of no to palm
Source: http://www.betterpalmoil.org/what
GETTING GREENER