Business

Thursday August 28, 2008

Benchmark for palm oil player

By DANNY YAP


Award of first RSPO cert to United Plantations changes whole ball game for the industry

KUALA LUMPUR: United Plantations Bhd being awarded the world’s first Roundtable on Sustainable Palm Oil (RSPO) certificate on Tuesday has a significance beyond a company-specific milestone.

It sets the benchmark for other players in the industry to follow suit.

More importantly, it changes the whole ball game for industry players as those with RSPO certification would be deemed the “preferred” palm oil companies by the big international buyers, who are likely to insist on dealing with producers that practise sustainability.

Other large palm oil players in Malaysia and countries like Indonesia have taken note of the bar being raised in the industry, and a number of them are in various stages of preparation for RSPO certification.

Control Union Certification lead auditor David Ogg (far left) and RSPO secretary-general Dr Vengeta Rao (far right) holding up the United Plantations RSPO Certificate, while Minister of Plantation Industries and Commodities Datuk Peter Chin Fah Kui (second from left) and and UP's vice-chairman and executive director Datuk Carl Bek-Nielsen (third from left) look on.

However, there are some questions that beg to be answered: What about the small and medium palm oil players which might not have the human resource and capital to undergo such a stringent test of sustainability? Would they be marginalised for the lack of RSPO certification?

These smaller players might be wondering what the future would hold for them in the name of sustainability.

Hopefully, the migration to RSPO certification will not be too detrimental for the smaller players, as assured by some RSPO experts and affiliates at the United Plantations’ RSPO certificate presentation ceremony.

They said that fair consideration and time would be given to these players to move to an “acceptable level” of sustainabiilty.

An RSPO certification expert said the organisation was looking seriously at the issue and how to make adjustments for the smaller players so that they would not be marginalised.

The move by the palm oil industry to have a sustainable business model is likely to set a precedent for a slew of commodities to be produced by sustainable means.

Stringent standards similar to the RSPO for the palm oil industry are likely to be introduced in a host of commodity-based industries.

This will have far-reaching implications in terms of the survival of many big as well as small players in the various industries.

 
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