Sustainable palm oil system soon

Monday November 26, 2007

Sustainable palm oil system soon

By HANIM ADNAN Star Online, Malaysia

IT will be interesting to gauge global players' acceptance of the Roundtable on Sustainable Palm Oil's (RSPO) certified sustainability palm oil (CSPO) system, to be launched in the first quarter 2008.

The first ever-certified system for palm oil in the world is set to assure consumers that the products purchased come from environmentally friendly, socially responsible sources and suppliers.

Some quarters, however, have doubts on CSPO given a decade-long criticism from various groups, including non-governmental organisations (NGOs) from developed consuming nations like the United States and Europe.

Can CSPO effectively clear accusations by NGOs that palm oil-producing countries like Malaysia and Indonesia are destroying rainforests to cultivate oil palm? They claimed that this had resulted in climate changes and endangered wildlife habitats, particularly the orang utans.
Malaysia and Indonesia currently produce 85% of the world's total palm oil output.

In Europe, top supermarket Sainsbury pledges to use sustainable palm oil by mid-2008, while Body Shop was the first top cosmetic retailer to introduce sustainable palm oil into the global beauty industry.

For Malaysia, a majority of its big plantation groups are proud members of the RSPO, which recognises the importance of CSPO.

Many are confident to be audited, believing they meet the criteria set by RSPO to get the CSPO certification.

One such company is Synergy Drive Bhd, the merged entity of Sime Darby Bhd, Golden Hope Plantations Bhd and Kumpulan Guthrie Bhd.

President and chief executive Datuk Seri Ahmad Zubir Murshid said: “As an industry, we have made some progress in responding to sustainability debate.”

In Malaysia, “zero burning” has been implemented and monitored since 1990s and integrated pest management is widespread.

Internationally, he said, Malaysia initiated and developed the RSPO principles and criteria that are committed to environmental, social and economic sustainability.

For Synergy Drive, Zubir said the combination of experience, strengths, and natural advantages of the three groups had created greater value to its stakeholders.

“Economies of scale will enable us to develop sound cultivation and production methods, traceability and food safety,” he added.

He pointed out that the group's plantation unit operated across the entire value chain, both upstream (i.e. sourcing) and downstream (i.e. processing).

“We are developing sustainable practices on the plantation as well as at the mill and in the processing plants in our oils and fats division,” he added.

Upstream, Synergy Drive is responsible for the cultivation and management of 543,000ha of oil palm plantations in Malaysia and Indonesia.

This accounted for 2.1 million tonnes of CPO per year, contributing about 43% to the group’s operating profits for the financial year ended June 30, 2007.

“With the benefits of size come the responsibilities. Having 543,000ha of oil palm plantations makes Synergy Drive the leading palm oil producer in the world,” he noted.

Zubir said over the past two years, the group had participated actively in the RSPO trials to identify issues and challenges in implementing the agreed principles and criteria for the sustainable production of palm oil.

“A certified sustainable palm oil doesn’t just require sustainable practices but also traceability to prove it,” he said.

He said Synergy Drive had been working on tracking and tracing processes to identify the origin of sustainable palm oil right down to the plantation and the mill.

To date, the group has carried out biodiversity studies on 60,000ha of its plantations.
Apart from focusing on sustainable practices, Synergy Drive also enhances conservation outside the plantation.

This month, the group signed an agreement to work with the Malaysian Nature Society on a new conservation project at the Belum-Temenggor forest, called the The Hornbill Project.
Zubir noted: “Although we have done a lot in this field, we know that there is still more to do as we do not have all the answers.”

He said complacency should not be allowed to set in.
“Synergy Drive will continually monitor, review and improve our sustainability initiatives. And in developing a sustainable future, we will need to be open and transparent,” he added.
Zubir also cautioned on the challenging times ahead.

“All sectors must work together – across borders, and between organisations and individuals.
“We encourage more research funding from our government and corporate bodies. And we must share the outcomes of that research in order to deliver our objectives efficiently,” he said.