Earthsight has published fresh criticism against the EU’s plan to rely on green labels to stem deforestation in countries that export to the EU. The criticism was summed up as:

• Fresh promises on forests at COP26 will be meaningless unless they are coupled with real action. A key test will come shortly after the conference concludes.

• Deforestation and associated human rights abuses are driven by overseas demand for agri-commodities like palm oil, soy, and beef. They won’t be stopped until that demand is stopped. New draft EU legislation – expected to be released next week – could cut off one of the biggest sources of that demand.

• However, while decision-makers debate the finer points of the law, such as the commodities it will cover, none of these will matter if they do not address a wider problem: the flawed ‘independent certification’ schemes it looks likely to end up relying on, whether they are given a formal ‘green lane’ or not.

Multiple NGOs have criticized the use of voluntary certification schemes for ‘due diligence’ proposals to cover the sustainability of commodities like beef, timber, palm oil, and soy so the opinion of Earthsight is not exactly news.

The Stockholm Environment Institute (SEI) had published a similar opinion on the UK’s plan to introduce ‘due diligence’ legislation to control the quality of UK imports.

At the centre of the criticism is the failure of voluntary certifications to stem deforestation. While Earthsight took square aim at green labels, the SEI questioned whether the simple factor of the legality of imports was adequate to reduce deforestation in imports.

Opinions and criticisms like these present a challenge that the Malaysian Sustainable Palm Oil scheme relishes. The standards imposed by the MSPO may read like those from other green labels but there is a huge difference that needs to be conveyed to understand how the MSPO meets the demands of environmental groups like Earthsight and SEI.

Mandatory National Standards vs Voluntary Green Labels

The MSPO may be seen as yet another “Green Label” but it is far from the voluntary certification schemes of yesteryear which sought to label a commodity as sustainable. Environmental groups have criticized voluntary certification schemes as inefficient, ineffective and in some accusations, downright greenwashing.

Their harsh opinions may be justified as they see commodities from a production region being certified as sustainable while accusations continue that the same commodities from that particular region are not sustainable. That in fact, is the problem with voluntary certification schemes.

Say for example with palm oil. The same region that produces certified palm oil could very well produce uncertified palm oil to meet different market demands. It is a fact that while some markets demand certified sustainable production, others could not care less as long as the price is low enough.

That in essence has been the problem with voluntary certification schemes where producers bend and flex to meet the demands of their particular customers.

SEI recommended that any legislation to stop imported deforestation must include:

1. A mandatory requirement on all companies (with eventually no threshold applied for size) to assess and disclose illegal1 and legal deforestation risk, with penalties (fines and other civil sanctions) applied for non-compliance. Disclosure should include detail of sub-national sourcing patterns, to improve the accuracy of deforestation risk assessments.

2. all companies must remove illegal deforestation linked to their supply chains, with penalties (fines and other civil sanctions) applied for inaction.

3. A mandatory requirement for companies utilizing a significant volume of forest risk material to produce, and disclose progress against, a plan for addressing all deforestation activity or risk identified in their supply chains (with plans supported by measures such as a sustainable import guarantee scheme and the transfer of tools and guidance across sectors, as recommended by the UK Global Resource Initiative (GRI)). More stringent expectations would apply to those companies who are first placing forest risk material on the UK market, rather than those downstream in the supply chain. If the proposed legislation is not extended to include the above considerations, then it is highly likely that a significant proportion of deforestation risk linked to the UK supply chain will not be addressed, and gaps in the coverage of the legislation may be exploited.

Seen against the backdrop provided by Earthsight’s criticism of green labels and the Stockholm Environment Institute’s recommendations for ‘due diligence legislation’ the Malaysian Sustainable Palm Oil scheme stands out as a pioneer as a nationally mandated certification scheme.

Backgrounder on MSPO

For those that have not been aware of the MSPO, this was an achievement that took place over a few years with heavy investment from the Malaysian government.

The government had long recognized that the sustainable production of Malaysian commodities matters not only because of foreign buyers’ demands but that it had to have nature-positive impacts on biodiversity and the well-being of every Malaysian. The MSPO standards were developed and continue to be improved on with the participation of the Standard and Industrial Research Institute of Malaysia (SIRIM) which speaks volumes about the overall context of the MSPO.

SIRIM is entrusted by the Malaysian Government to be the national organization for standards and quality and as a promoter of technological excellence in Malaysia. A simple example of SIRIM’s importance to quality might be the imposition of SIRIM standards on an everyday consumer product like light bulbs. A poor-performing light bulb whether locally produced or imported would not pass SIRIM standards and therefore be restricted from the sale.

The additional inclusion of scientists, academicians, and civil societies in developing the standards for the MSPO explains why Malaysia is confident of meeting export market demands for sustainability. As a green label that represents national standards, the current proposals by the UK and the EU to restrict imports associated with illegal deforestation are a non-issue for Malaysian palm oil. 

Even if the requirements from the final legislation on ‘due diligence include the recommendations of the Stockholm Environment Institute, the MSPO is ready to present its certification as proof of a national certification scheme’s ability to meet the requirements of groups like Earthsight or SEI.