Outline of Presentation

Transcription

1 Cost & Implementation : Concerns regarding verification and meeting RSPO Criteria Presented by Mr Chew Jit Seng on behalf of MPOA at RT, Meritus Mandarin, Singapore. st November 6 Session Chairman : Dato Mamat Salleh (Chief Executive, MPOA) Outline of Presentation Update of RSPO Ordinary Membership Feedback from Self-Assessments & Trial Implementation by MPOA Members Highlights of Cost Implications Concerns on Verification Protocol Concerns on Supply Chain Options and Commitment by other members of RSPO Other Concerns Expressed by Members Summary and Conclusion

2 Update of RSPO Ordinary Membership as at 7 November 6 Sector Growers Processors/Traders Consumer Goods Manufacturers Retailers Banks/Investors Environmental NGOs Social NGOs Total Ordinary Membership 7 Affiliate Members ( Total RSPO Membership 9 ) No. Members % Feedback from Self-Assessments & Trial Implementation by MPOA Members Results of Self-Assessments Using KLK Format Contributing members KLK 8 respondents (Estates & Mills) Kulim Estates & Mills (ISO EMS) SALCRA Preliminary Results PPB Reka Halus Estate/Mill Sime Plantations Preliminary Results Boustead Estates IOI Preliminary Results UPB Jendarata Estate FELDA 8 Estates, Mill, HQ Senior Managers

3 KLK Format Score for each indicator : Cannot comply, just not practical Difficult to comply due to other constraints - Need to set up mechanism and system for compliance Can comply Action to be taken : RSPO to revisit/review the relevant indicators Org. to examine ways to improve compliance/ review if difficult to comply Org. to install necessary mechanism to enable compliance Org. should internalize the relevant criteria as routine practice KLK KLK FIELD SURVEY RESULT Criteria

4 Kulim KULIM FIELD SURVEY RESULT.5.5 Index (-) Criteria SALCRA SALCRA FIELD SURVEY RESULT.5.5 Index (-) Criteria

5 Boustead BOUSTEAD (ESTATES) FIELD SURVEY RESULT.5.5 Index (-) Criteria FELDA Assessment Based on KLK Format The Assessment showed that 9 of the criteria are difficult to be implemented in large scale plantation/mill complex (, ha) Assessment Index based on "KLK Survey Format'.5..5 Index (-) Criteria 5

6 Criteria of Concern Common Challenges In Meeting P&C Requirement Links Links to the feasibility/necessity to conduct PP, SIA etc -Land boundary is clear but acquiring land title involves many govt. dept. -Too costly, not accurate & not practical. high variation expected d in result -Tedious calculations as sources vary (rain, river etc) -Difficult to quantify (many settlers, pest population varies over r season, time) -Reduction/elimination of pesticides is difficult as it is highly correlated to pest population -Too general, need to specify (size etc) -Difficult to identify pop status (esp. if outside estate) Many hunting h method exist,diff. to control -Difficult when using contract services, FFB yield fluctuate -Need to be specific (significant pollutant, beyond national compliance) -Aspects too general, to specify. Ensuring participation/presence of all parties may be difficult. -Other interested parties?. Documentation of all communication takes t a lot of time/resources. -Customary right entitlement?. Fair distribution can be questionable (agreed system?) -System needed to identify valid external stakeholders -Soil survey to the rooting depth etc can be difficult (late) -May affect national/country planning - Let EIA determine justify opening of the fragile soils. Peat >m possible to develop? - other stakeholders need clarification. Should confine to local parties -Identification of legal & customary wrights & people entitled for f compensation is difficult Highlights of Cost Implications Feedback received from MPOA Members : GHPB s Carey Island Estate (, ha) Sime Plantations - Estates at,5 ha each Boustead s Estate & Mill (,7 ha) Feedback using Dr Rao s Costing Format published in Rao, 6 (International Planters Conference 6, Kuala Lumpur). 6

7 Principal requirements for RSPO compliance Principle Documents and records Legal advice, documents and records Financial advice, R&D or extension service Documents/records, changes / additional field operations Environmental, Biodiversity & Waste Management Expertise / advice Legal advice, Documents/records, Social Science expertise Legal advice, environmental and social expertise Documentation, rd party audits Additional costs (USD/yr) to meet RSPO criteria Principle TOTAL Scenario 8 6,,, 8, 5, 56, 5 55,6 Scenario 8 6,,, 8, 8, 56, 5 55,6 Scenario 8,,, 8, 5, 5 6,9 Scenario : New 5, ha plantation with mill. All costs including building primary school, hospital etc. Scenario : New 5, ha plantation with mill. Government school. Scenario : Existing plantation (with infrastructure, SEIA not required. No land disputes. Govt. school.) Assumptions : Stringent compliance, opportunity costs for % set-asides, closed effluent tanks. 7

8 Costs of implementing RSPO Standards in three rd generation palm oil companies (USD/yr) with economy of scale Principle Company Company Company TOTAL 5,6 8, 5, NA 5,, 68, NA 68, 5, 6,,, 6, Assumptions : No oil palm land withdrawn from cultivation i.e. no set-asides for conservation of biodiversity/hcvf and does not include auditing & verification costs. Concerns on Verification Protocol Draft Draft verification protocol not quite ready for adoption Many issues still unresolved? Attempt Attempt to hijack the testing of VP by others? Propose that this be endorsed only at GA of RT5? If members want to be certified, wait until trial implementation period is over or Continue BB arrangement with rd party auditing under current interim control of claims where, Companies can be compliant with P&C but not certified by RSPO 8

9 Concerns over Supply Chain Options No clear mechanisms discussed or demonstrated as yet on how the suggested options really work Need to be tested in real situations Identify & finalise most feasible option (s) at RT5? CRITICAL WEAKNESS OF RSPO DEFINITION OF SPO Does not cover fate of SPO after leaving the mill (transport, refining, processing, manufacture, retail / branding) Code of Conduct (draft) needs strengthening to reassure producers Item. : States that Members to whom the P&C do not apply directly will implement parallel standards relevant to their own organisation which cannot be lower than those set out in the P&C 9

10 Other Concerns Expressed by Members Decision making, communication & governance Need more transparency in communication, decision making and practice of good governance, RSPO/EB appears to rush through many issues e.g. verification protocol Moving away from stated objectives and early practice of making decisions by consensus? Anti-trust trust guidelines Many members not clear about this Comply only with anti-trust trust or competition laws of the countries in which they operate? Needs to be formally tabled and approved by EB and minuted/resolved as such before tabling at GA for endorsement? Perceived as seriously in conflict with national legislation, working against producers? Code of Conduct Needs to be amended to reflect NI, reporting options, parallel standards s across supply chain? Needs to include explicit coverage for EB members, Supply Chain, NGOs Grievance Procedure Should be put through public consultation, reasonable timeframe for handling grievances, over-riding riding powers of GP Panel? Summary & Conclusion

11 Implementation Many criteria & indicators in P&C are impractical Many of the criteria are embedded with the requirements for social impact studies, making it more difficult to comply without incurring deployment of external experts. Need to be reviewed, redefined & tested before implementation RSPO should use all feedback without censorship Testing difficult criteria identified e.g. projects on C5. & C6. should be implemented Producer members should be allowed to implement P&C at their own pace National Interpretation? Cost Implications P&C requirements costly to implement Cost of internalizing the recommendations arising from rd party assessments Supply Chain requirements need further definition, testing and clarity Cost of auditing, certification and verification?

12 Verification RSPO should stick to original plan to review Verification Protocol, P&C, guidance, indicators at GA of RT5 and should not change midway through testing period RSPO should not introduce official checklist & verifiers at this stage and allow testing process to go on Interim control of claims allow BB rd party compliance audits paid by buyers or wait until trial period over? Concerns that smaller players & smallholders interests may be marginalised! Thank you Malaysian Palm Oil Association