NGO powerplays roil palm oil certificat​ion. Back to B2B?

One of the casualties of NGO wars over palm oil may be RSPO as it and WWF gets pulled along by NGO demands for more. GAR has seen the outcome of TFT efforts on its behalf. Interestingly, the Nestle name altogether disappeared from its high carbon stock solution. In a bold and  courageous move, GAR and its consultants brought in Greenpeace.

Growers will be disappointed that sustainability certification efforts become destabilised by demands on high carbon stocks as well as the risky RSPO HCV compensation fees proposals that may amount to added cost of USD70* per tonne or more for newer estates (we update for a higher cost estimate as we get feedback that social compensation may double environmental compensation fees).

B2B efforts may get a boost as companies tire of their sustainability efforts being damaged by NGO tussles. There are new supply chain demands too - focusing on third-party purchases. In this, Wilmar is widely regarded as the most vulnerable. Few businesses, including buyers, will want to deal with escalating uncertainty in sustainability certification. Look out for more buyer standalone protocols that start to offer alternatives to the RSPO and other NGO mediated schemes? Growers will then have to mull over the many sustainability schemes emerging.

Note: RSPO RT11 is just around the corner, and this event is often a trigger for new policy moves. In the last two weeks or so, our channel checks focused on Malaysia and Singapore-based palm oil players. We found significant shifts in thinking about certification efforts.

Please also check out our upcoming newsletter: Khor Report's Palm Oil Nov/Dec 2013, Issue 5 (released)