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A Pledge for People and the Planet Why Social Responsibility Makes Good Business Sense

17 March 20237 min reading

When choosing sustainable palm oil products, companies make a firm commitment to halting deforestation and safeguarding the rights of labourers and local communities.

As we are fast approaching 2030, the year set for the international community to achieve the United Nations Sustainable Development Goals (SDGs), there is mounting pressure on every industry to fulfil environmental and social commitments. Among these industries is the food and agriculture sector, along with its entire supply chain, including the feed sector. 

The food and agriculture industry's environmental impact, particularly regarding climate change, is well-documented – it is estimated that the industry accounts for a quarter of the world's greenhouse gas emissions, with livestock and fisheries making up 31% of total emissions. However, the social impacts of the sector are often harder to quantify, despite social sustainability being a key pillar of the sustainability agenda.

What is even more challenging for the feed sector is the “invisibility” of the supply chain. There is often less scrutiny of feed products by consumers since they are only indirectly involved through the end product, such as in their consumption of meat. Additionally, consumers often lack knowledge about the ingredients used in feed products. While soy and corn are well-known components of feedstock, many consumers are unaware that palm oil and its by-products are also common ingredients. 

To achieve sustainability in the industry, taking a holistic approach is essential. This involves considering both the environmental and social impacts of the entire supply chain, including the use of palm oil.

UPHOLDING LABOUR RIGHTS IN THE PALM OIL INDUSTRY

Promoting environmental sustainability has long been a priority area in the palm oil industry. Global controversy surrounding palm oil produced unsustainably has largely focused on its links to deforestation and climate change. Yet we cannot achieve a fully sustainable supply chain without a comprehensive approach that also considers workers’ protection and human rights.

When no safeguard measures are applied, labourers in oil palm plantations are often recruited from the most vulnerable and marginalised segments of society, including migrants, indigenous communities, children, and undocumented or stateless workers. More often than not, these labourers are disadvantaged by not having a voice or viable avenues to air their most critical concerns or advocate for their basic rights, making them susceptible to labour abuse. Low education levels of workers and the geographic isolation of many plantations further exacerbate their vulnerability, increasing their risk of exploitation.

Migrant workers continue to wrestle with unethical recruitment practices and excessive recruitment fees that still persist in the industry. The financial burden imposed on them can leave workers in situations of debt bondage or other forms of forced labour. Under these circumstances, these groups often have no access to legal or political recourse.

Indigenous communities, who have long served as the custodians of lands and forest areas, are also vulnerable to labour exploitation. These communities have a long history of protecting forested lands and a recent UN report shows that indigenous and tribal peoples are the best defenders of forests. As rightful owners of their lands, they have the right to say no to any development or encroachment, and must thus be considered key stakeholders and decision-makers in determining the most sustainable development path forward. 

Given all these critical social issues, how can the food and agriculture industry, particularly the feed sector, ensure that social responsibility is embedded in their supply chain? Animal feed producers and traders, meat and dairy producers, as well as retailers have a valuable opportunity to catalyse positive change by asking their suppliers whether the feed, feed additives or milk replacements are sourced sustainably and if not, how they plan to address this. One way of addressing this is ensuring that their palm oil, palm oil derivatives and palm kernel expeller are RSPO certified.

RSPO - A VIABLE SOLUTION FOR SUSTAINABLE DEVELOPMENT

The Roundtable on Sustainable Palm Oil (RSPO) is an international not-for-profit membership organisation that develops and implements standards for the sustainable production and use of palm oil. Counting over 5200 members worldwide, RSPO operates through a multi-stakeholder process to ensure that every stakeholder has a voice and commits to a shared responsibility in upholding the RSPO Standards. RSPO brings together the key sectors of the global palm oil industry, including oil palm producers, processors and traders, consumer goods manufacturers, retailers, banks and investors, and social and environmental NGOs.

Among the leading global palm oil certification standards, RSPO has been ranked first as having the strongest set of requirements according to a comparative study carried out by the Forest Peoples Programme.

Sustainable development has been at the heart of RSPO since its inception in 2004. The goal of RSPO certification is to achieve positive impacts in three key areas: people, planet and prosperity. RSPO recognises that sustainable palm oil production must strike a balance between supporting sustainable livelihoods, reducing poverty, and protecting, preserving and enhancing ecosystems. By focusing on these three areas, RSPO certification advocates sustainable practices that prioritise the wellbeing of people, the environment and the economy.

A sustainable palm oil sector can help improve rural livelihoods and social wellbeing by ensuring that local communities, including smallholders, participate in key decision-making processes and have shared access to the benefits of the industry, which include fair compensation, wealth and employment creation, and socioeconomic development of communities. By prioritising social wellbeing as an inseparable part of environmental sustainability, a sustainable palm oil chain can lead to a more equitable and just industry that leaves no one behind.

Plantation workers and smallholders play an integral role in creating a more sustainable palm oil supply chain by adopting sustainable production practices. RSPO certified growers have significantly reduced the use of restricted pesticides and herbicides in favour of non-toxic methods and participate in conservation efforts and wildlife protection. Moreover, local communities are included in the decision-making process. They are able to voice their concerns and provide feedback on critical issues, including land use and development, management of natural resources, and upholding their basic human rights.

In its latest Impact Report (2022), RSPO aligns its impacts with the SDGs, identifying 66 direct and indirect linkages between the 248 SDG targets/indicators and RSPO’s work. By defining and aligning its impacts with the SDGs, RSPO provides a framework for members to better understand their part in sustainable development and how they can contribute optimally to these critical goals on an individual, organisational, national and global level.

ROLE OF COMPANIES IN THE SUSTAINABILITY AGENDA

Businesses have strong economic and reputational incentives to act, especially when they are dependent on global supply chains and consumers who are increasingly sensitised to these issues.

Informed consumers are more likely to support products that meet their values, and the scrutiny of labels and ingredients lists has become part of the everyday shopping experience. There is an ever-urgent need and growing global concern to ensure that commodities are produced without causing harm to the environment or people. Sustainability-conscious millennial and Gen Z consumers will soon form the majority of consumer spending and the industry landscape may transform dramatically, leaving out those who are not prepared for that change. Companies and industries opting for sustainability schemes like RSPO will have more tools and experience to adapt to the dynamics of value-driven demand.

Responsible leaders know that sustainable growth can only stem from environments where people have dignity, equality and freedom. The collective efforts pioneered by RSPO members since 2004 have paved the way for addressing deforestation and achieving a balance between economic development in other agricultural supply chains and the social wellbeing of the most vulnerable stakeholders within the palm oil value chain. The standards which RSPO members have endorsed and hold themselves to offer a robust response to the critical challenge of sustainability.

When choosing sustainable palm oil products, companies demonstrate their commitment to a much bigger cause: halting deforestation and child labour, improving the lives and livelihoods of thousands of farmers worldwide, and ensuring that labour and communities’ rights are upheld. These impacts are all aligned with the UN SDGs – and they can be part of a company´s narrative when the RSPO Standards are adopted and implemented in their


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