US soybean sustainability issues and approach

Summary by Khor Reports, 24 March 2014 from presentation by Josiah McClellan; Director of Food Market Issues and Sustainability, United Soybean Board; March 16-18 2014 at National Institute of Oilseed Products (snapshot of key slides in image below).

Interesting to see US soybean industry facing similar issues as palm oil in certification:

• increasing importance of ISCC
• "certification fatigue"
• competition between and within NGOs
• the need for equivalence
• problem of “moving targets”…

What's notable is US soybean’s research-based data-intensive approach which includes: a) measure of environmental impacts of US soybean production 1980-2011; b) measurement of efficiency and other performance measures by grower; c) survey for practice adoption intensity by state; d) use of sustainability-yield models and e) focus on industry-scalable approach, addressing key industry priorities and industry collaborative efforts. 

Khor Report comment:

There is increased need for research-data intensive approach for palm oil to tell its story. So far, NGO-led voluntary sustainability certification does little in terms of positive comparatives (e.g. palm oil vs soybean vs rapeseed); much to palm oil's frustration since it does well on many key comparative measures. Indeed, some supply-chain companies wonder if international campaigning has been so successful as to drive some markets toward "no palm oil" (some NGO ratings of "sustainable palm oil" products give the highest ratings for those containing NO palm oil). 

The increasingly popular ISCC (principally for biofuel but with a new food module) method is more comparative given that it's a multi-feedstock certification. Most NGO-led certification look only for internal changes and improvements i.e. no more use of peat and no more deforestation but independent data and impact studies have been notably lagging ten years into the palm oil sustainability movement. NGO-led certification has been critiqued for being relatively blind to national development goals and socio-political fissures in Southeast Asia. In this regard, the current phase of escalating sustainability compliance (silence on premiums implies cost to producers rather than shared benefit of premiums) will undoubtedly include national policy makers as they mediate and negotiate the detailed implementation of what is proposed by NGOs and dominant companies, especially for smallholders (Indonesia regulatory changes are significant in this sphere). At the same time, we hear of corporate interest in expanding resources for more rigorous studies to support palm oil marketing on various features. As such, the approach of competitor oils is pertinent and the US soybean story is worth looking at. The bottom-line? Data. Data. Data.

The difference in palm oil and soybean certification is also notable. Please read our blog posts on comparative differences between the WWF-Roundtables, RSPO and RTRS:
/khorreports-palmoil/2013/02/rtrs-moves-ahead.html
/khorreports-palmoil/2011/10/rspo-vs-soy-roundtable.html

 

 

TFT rattles NGO sector?

No doubt the wider palm oil sector is curious about the key independent adviser for Wilmar and other companies' new policies.

Thank you to readers of Khor Reports for sharing this weblink for an in depth article and profile on TFT; http://www.eenews.net/stories/1059995365; "DEFORESTATION: Meet the 'go-to man' for companies that get in trouble with environmental groups"

Excerpts:

Poynton, 49, has built a reputation as the go-to man for large corporations to take deforestation out of their portfolio of issues. Whether it's a concession to pressure from environmental groups, a recognition of consumer demand for sustainable products or the threat of divestment, companies have been lining up to work with TFT.

"We come with a health warning: It is unpleasant and difficult to work with TFT, because we will change you, and change is fundamentally difficult and stressful and full of tension," said Poynton, 49. "But if you're ready to go on the journey, the destination will be a good one."

Founded in 1999, TFT works with companies to first create a policy that would wean them off business-as-usual practices that lead to forest clearing and then make sure they stick to the task. In 11 years, membership has grown from six to 80, including companies like chocolate maker Ferrero and Crate & Barrel.

Poynton doesn't mince words when talking about his work. He is gregarious, a quick speaker, peppering his talk with anecdotes, jokes and jabs at his critics. He is relentlessly passionate about the natural world, but pessimistic about government-centered action to stop deforestation, like REDD+, a U.N.-backed mechanism that seeks to pay countries to keep forests standing....

But there are apparently some questions from other NGOs...

.....The World Wildlife Fund, one of the largest and more business-friendly environmental groups, is one of the groups suspicious of TFT's ability to act as an independent third party.... World Wildlife Fund has also called into question Poynton's impartiality, playing the role of both a paid contractor and an enforcer of the policy.... "We consider them a second-party entity; that's different from hiring an independent third-party auditor," said Walker.....

An article from Yale University's Environment360 website suggested that TFT and Greenpeace had concocted a "good cop-bad cop" routine: Greenpeace shames the company, and TFT comes to offer corporate comfort.... "This is a lot of power in the hands of one organization -- and one man," wrote journalist Fred Pearce....

Yale Environment's 27 Jan 2014 report weblink: http://e360.yale.edu/feature/monitoring_corporate_behavior_greening_or_merely_greenwash/2732/';
"Monitoring Corporate Behavior: Greening or Merely Greenwash? Companies with bad environmental records are increasingly turning to a little-known nonprofit called TFT to make sure they meet commitments to improve their practices. It remains to be seen if this is just a PR move or a turning point for corporate conduct...." 

Wilmar’s strong pledges - NGO reactions

On 5 Dec 2013, Wilmar introduced its ‘No Deforestation, No Peat, No Exploitation’ policy. This adds on many new criteria to the RSPO standard. Noteworthy additions include: (i) the non-use of peat of any depth; (ii) apparent agreement to the controversial 35 tonnes carbon per hectare ceiling (implied by the statement: “HCS will be protected. (Only) Young Scrub and Cleared/Open Land areas may be developed”); (iii) progressive greenhouse gas reductions (likely to affect palm oil waste management and the cultivation of existing peatlands); (iv) the restoration and enrichment of forest and peatlands (at what cost and on whose determination?); and on labour, Wilmar pledges on (v) no forced labour, (vi) a 60-hour work week with 1 day off (i.e. average maximum 10 hour work day inclusive of overtime), (vii) 3.8 square meters / 32 square feet of individual living space, and (viii) trade unions with collective bargaining.

These broad and strong new socio-environmental commitments will apply immediately to Wilmar’s own plantations (it has adhered to the RSPO standard, but it now needs to add numerous new criteria). Wilmar will also apply this to other companies who supply the palm oil, sugar, soy and other commodities that it trades. Thus, this pledge should have big impact, especially on palm oil where it is frequently said to control around half the world trade. Here, Wilmar can use the power of its dominant position.

Such a move by a dominant company has long been the strategic goal of NGOs pushing for strong palm oil sustainability. WWF targets 15 commodities with its “roundtables” voluntary standards program which targets the “big brands” to effect more rapid change[2]. Csrwire.com (15 Nov 2013) exaplains that “corporations can leverage their supply chain power to achieve systemic solutions to social and environmental challenges.” Power or size is a curious thing: big can be a strength as well as a risk.

Wilmar’s policy was launched just after its deal with Unilever, the #2 FMCG giant. Unilever also recently upgraded its own target to only use traceable palm oil by end 2014; together with a plan collapse its supplier roster from over 100 to under 20. Multinationals are under pressure to use “ethical” ingredients. NGO commentators note that “the commercial benefits to Wilmar of appearing to be an environmental leader are clear.” At the same time, they are watchful of how Wilmar will implement its policy.

"RSPO+9", new TFT / Climate Advisers-led policies for Wilmar include:
(i) non-use of peat land of any depth; (ii) likely 35 tonnes carbon per hectare ceiling for land development; (iii) progressive GHG reductions; (iv) restoration and enrichment of forest and peatlands (similar to RSPO HCV compensation?); (v) no forced labour, (vi) 60-hour work week with 1 day off inclusive of overtime, (vii) 3.8 square meters / 32 square feet of individual living space, (viii) trade unions and collective bargaining; (ix) grievance procedure where advisers and stakeholders have a say in banning suppliers Note: Summarised from Wilmar’s “No Deforestation, No Peat, No Exploitation Policy,”

Wilmar’s existing suppliers have until the end of 2015 to comply. Wilmar plans to semi-outsource key parts of its supplier management, notably: “Wilmar will cease to do business with any suppliers who our independent advisors (TFT and Climate Advisers) or other stakeholders find are in serious violation of this policy, and who do not take immediate remedial action to correct those violations.” It promises that a banned list of suppliers will be created.

NGOs seem interested to see how Wilmar’s new policy will affect the Ganda Group, a palm oil company closely connected to Wilmar (reports by Friends of the Earth, 2007 and Greenpeace, 22 Oct 2013). Awasmifee.potager.org (11 Dec 2013) writes that “Wilmar has a special relationship with Ganda Group, which is owned by Ganda Sitorus, the younger brother of Wilmar founder Martua Sitorus. In recent years the Ganda Group has taken over plantations which do not meet Wilmar’s previous ethical commitments to the RSPO and IFC… (e.g. Wilmar) sold its subsidiary PT Asiatic Persada to the Ganda Group.”

It appears that Wilmar is in the position of pushing rather strongly with pledges that may prove challenging to implement. Judging from the tone of NGO reactions, their scrutiny of Wilmar’s moves could remain pretty tight. Can it hit its KPIs and timelines? Will enough NGOs regard Wilmar’s move as satisfactory or will some NGOs see opportunity to bargain for more? Such shifts can attract more change-makers seeking tipping points across several tropical and other commodities.
Along with TFT and Climate Advisers, Greenpeace now sits atop palm oil sustainability (by virtue of its ground-breaking move with TFT at Golden Agri/Sinar Mas on the new high carbon stock criteria). Greenpeace views the move as “Wilmar (caving) to public pressure.” it promises that it “will be closely monitoring how Wilmar will put these words into action…” and asks “will it now immediately stop buying from companies such as the Ganda Group” (5 Dec 2013). Rainforest Action Network calls this “only the beginning” (ran.org, 5 Dec 2013).

How will other dominant players react (see page 2)? While it looks like they may need to rely on the same imaginative independent advisers (TFT and Climate Advisers lead Wilmar), it is possible that at the industry level there is need to hedge risk via some “home grown” national, regional or multilateral programs. If there is perceived or actual weakness in negotiation strategies and tactics - industry and companies can become “soft targets.” Indeed, some professionals worry that marketing is making the call rather than science. If so, we would not be surprised to see stringent interpretation and implementation of Wilmar’s pledges and/or even more criteria added in years to come. But only time will tell.

[2] Jason Clay explains WWF’s 15 commodity-big brands strategy in this video: http://www.ted.com/talks/jason_clay_how_big_brands_can_save_biodiversity.html

This is an article from Khor Reports' Palm Oil Newsletter #6, Jan/Feb 2014.

Africa: NGOs asked to disclose info?

Thank you to a Khor Reports' international reader for alerting some news, in response to our recent posting on remote sensing and transparency. Interestingly, the Liberia government asks NGOs for some information disclosure (see news clipping image below). Might other Africa governments do the same?

 

Khor Reports comment: As Africa is in development mode, they will probably be more sensitive to interventions that affect their economic development policies. The asymmetry of information flows generated by plantation sustainability is notable. Plantations have released a lot of information and have also brought NGOs in-house to assist them in various technical and market access fields. They will be giving out more data such as the geovectors of their boundaries, land bank maps and land type details for usage by the public and NGOs via new RSPO and TFT-Wilmar's policies. In contrast other stakeholders have not needed to release much information.

Remote sensing brings new transparency

From Khor Reports's Palm Oil Newsletter #6 Jan/Feb 2014

New transparency

The use of remote-sensing technologies in the industry are in its early stages while some NGOs are also advanced users. Aerial sensor technologies use images from satellites and drones, to detect and classify objects on the surface; saving the need to be on the ground. Given the importance of its applications, expanding availability of cost-effective data sets, equipment and services, it is set to grow. We look at three usages: the first informs biofuels policy and two have significant potential impact.

1. Setting biofuels policy

To help set biofuels policy, the International Council on Clean Transportation or ICCT needed to know and project how much oil palm is developed on peat. Satellite images were used to estimate the area of expansion 1990-2010: Data sets used include 1990 GeoCover with 28.5 m spatial resolution, 2007 Satellite Pour l’Observation de la Terre (SPOT) satellite images with high spatial resolution (10–20 m) . Spatial resolution refers to how close two features can be within an image and still be recorded as distinct.

Four maps presenting the extent and distribution of industrial oil palm plantations on peatland in 1990, 2000, 2007, and 2010 in Peninsular Malaysia, Sumatra, and Borneo were produced from the high resolution data sets with visual interpretation. The reported producer’s and user’s accuracies of 96% to 97%, suggest “high reliability” of the maps produced by this approach For 2007 through 2010, the area on peat increased 190,000 ha/year and “taking Indonesia and Malaysia together, the linear projections imply a 32% rate of palm expansion onto peat soils.” This is a key data point for biofuels policies in various developed markets. It is contested by the palm oil industry which: i) argues against the use of a simple projection from past to future, ii) points to the need for updated peatland area maps, iii) laments the poor scientific basis for voluntary policies against shallow peatland use, and the general lack of tropical peat studies. Why is less than 50 cm peat not considered by some voluntary standards? This is the depth set by the US Department of Agriculture to classify organic from peat soils [1].


2. Upstream planning & management

Satellite images are often used in due diligence studies on acquisitions. Plantations can also use satellite or drone-acquired images for topographic mapping, to help in planning for drainage, planting terraces, and planting patterns on slopes. RSPO also asks companies to produce accurate maps to identify areas with slope over 25 degrees* and 300 m above sea level. Interestingly, there is work to establish spectrum responses for early detection of chloropyll and moisture stress for better management. Can a narrow band even pick up on certain diseases? Previously, 4-5 bands were available and now 300 bands of specific wavelengths can detect variations [2].


3. NGOs bring “radical transparency”

Technical NGOs are actively using imagery from satellites to monitor plantation activity. The WWF has also started to use drones in conservation projects. External monitoring of peat smog fire hot spots were speedily done with accuracy in the 2013 record-breaking Sumatran peat smog season. Back in n 1997 hot spots could be 1km out and a hot zinc roof might also be mistaken for a fire [2]. Now, high resolutions including 2.5 meter resolution can pinpoint with confidence.
World Resources Institute (WRI) has its Global Forest Watch (GFW) initiative that is seeking palm oil supply chain clients. “(Using) near real-time satellite monitoring technology, forest management, and company concession maps, protected areas maps, mobile technology, crowd-sourced data, and
on-the-ground networks to promote transparency in forests around the world (15 Nov 2013, csrwire.com). Similarly, The Forest Trust (TFT) plans “To bring more transparency to a complicated forestry supply chain… (it) developed a monitoring tool that allows companies to convey real-time radical transparency in supply chains.” TFT’s tool is piloted for Asia Pulp and Paper (APP), with a dashboard that “allows the company to display detailed data going beyond compliance and displaying implementation of sustainability commitments (on 2.6 million hectares).” “In February 2013, after working closely with leading NGOs, APP launched a new Forest Conservation Policy… with a range of stakeholders” (15 Nov 2013, csrwire.com). As TFT also leads Wilmar, the above appears likely for Wilmar’s new policies and approach for palm oil.

Separately, we hear from NGO specialists they NGOs are ready to report on plantation impacts (Khor Reports interview, Nov 2013). This could mean that there will soon be contested reports in this vein: Plantation A has cleared an estimated X hectares and Y tonnes of high carbon stock since a cut of date, e.g. Nov   2005; with a breakdown by estimated non-peat and peat land area, HCV vs non-HCV etc. NGOs lacked accurate concession boundaries data. However, at the recent RSPO General Assembly, a resolution for growers to submit soft copies of their geovector boundaries was passed. These will be posted on the RSPO website for public access and use. While new corporate-ready technical NGOs such as TFT and WRI seek to provide radical transparency solutions for plantations, there will be others who may use the same data and approach for campaigning purposes. There are many possible users and usages, once technology costs have fallen as they have, and the necessary crucial private data is released. Eyes wide open!

[1] “Historical Analysis and Projection of Oil Palm Plantation Expansion on Peatland in Southeast Asia” by J Miettinen et al. White Paper Number 17 | February 2012. Indirect Effects of Biofuel Production. www.theicct.org.
[2] Khor Reports visited Applied Agricultural Resources Sdn Bhd, 10 Dec 2013, on technical updates. In future newsletters: carbon measurements, pests & diseases, genome prospects, and the politics of peat science.

Look out for Khor Reports' Palm Oil Newsletter #6, Jan/Feb 2014! This article is a sneak preview article from this issue (delayed in publication process).

Khor Reports blog exclusive note: Industry sources tell us that Wilmar's new procurement policy is being activated with a request for detailed maps and information about their supplier's land banks. This dovetails with RSPO policies in a way that could make transparent the maps for many plantation companies in the larger categories. If you are a RSPO member, you need to disclose and/or if you are a Wilmar supplier.

Update for reader comment *Enjoyed reading your article but I was wondering whether for point number 2 on Upstream planning and management’s paragraph line 5, the slope which RSPO ask companies to identify was 25 degrees rather than 25%. 45 degrees is equal to 100%. The 25 degrees is threshold slope for land development in the land code for Sabah and Sarawak whilst in the Peninsular, it is 20 degrees.