Ecological Economics 107 (2014) 438–446

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Ecological Economics

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Analysis

Towards global voluntary standards: Questioning the effectiveness inattaining conservation goals

The case of the Roundtable on Sustainable Palm Oil (RSPO)

Denis Ruysschaert a,⁎, Denis Salles b

a CERTOP University Toulouse-II Le-Mirail, Franceb IRSTEA ETBX Bordeaux, France

⁎ Corresponding author at: 23. 3B rue de Moillebeau, 1E-mail address: denis.ruysschaert@gmail.com (D. Ruy

http://dx.doi.org/10.1016/j.ecolecon.2014.09.0160921-8009/© 2014 Elsevier B.V. All rights reserved.

a b s t r a c t

a r t i c l e i n f o

Article history:Received 24 December 2013Received in revised form 7 September 2014Accepted 14 September 2014Available online xxxx

Keywords:BiodiversityCertificationDeforestationOrangutanPalm oilPrivate governanceRoundtable

Global voluntary agreements, such as the Roundtable on Sustainable Palm Oil (RSPO), have emerged as alterna-tives to apparent State failure to enforce law. This research questions how effective RSPO is in attaining itsclaimed conservation goals especially regarding orangutans, as this is central to justifying its existence.The study found five shortcomings explaining poor outcomes regarding the protection of the forest area, and es-pecially the orangutan habitat: financial compensation too small, too much room for interpretation in the guid-ance document, postponement on contentious issues, non-integration of RSPO within the socio-politico-legalIndonesian context and finally the lack of effective external control system. As these shortcomings complementeach other, the effectiveness of the scheme is dramatically reduced for biodiversity conservation, and is almostzero for species such as Sumatran orangutan that needs large forested areas.Conservation of biodiversity, and especially orangutans, will require oil palm sector reform. This would includereincorporating the state into the scheme and changing the approach supporting local development in a soundsocio-ecological regional planning.Covering a period of seven years, the study analyses the RSPO's work in the context of the acute conflict resultingfrom Sumatran orangutan habitat conversion to oil palm plantations.

© 2014 Elsevier B.V. All rights reserved.

1. Introduction

The extinction rate of current species is around 1000 times higherthan it would bewithout human influence (MA, 2005). This trend is sta-ble in global biodiversity loss, at around 1% a year, with a loss rate evenhigher in tropical forest (WWFet al., 2012). Emblematic species, such asgreat apes, follow the same pattern. Each of these species is in thecategory “Endangered” or “Critically endangered” on the IUCN Red Listand their populations are all decreasing (IUCN, 2013). The Sumatranorangutan (Pongo abelii), a species endemic to the island of Sumatra,Indonesia, is probably themost endangered great ape.With a total pop-ulation of about 6600 in rapid decline, primatologists have warned thatit could become the first great ape to go extinct (Wich et al., 2008).

Hunting being insignificant, the greatest threat to orangutans is theirhabitat loss, as this specie is only found in lowland rainforest Sumatrapresently under development for agriculture, especially oil palm planta-tions (Wich et al., 2011). This is due to the fact that Indonesia, followingthe Malaysian model, is developing its palm oil sector under a Statepolicy promoting large-scale estates, each of several thousands of hect-ares (Pye and Bhattacharya, 2013). Palm oil expansion is at the core of

209 Geneva, Switzerland.sschaert).

Indonesia's short-term (2010–2014) (Republic of Indonesia, 2010)and long-term economic (2005–2025) (BAPPENAS, 2004) developmentplan. As a result, palm oil production has risen steadily since the begin-ning of the twenty-first century. After overtaking Malaysia in 2006,Indonesia has become the world's biggest palm oil producer, with 53%of the world production or 31 million tonnes in 2013. This productioncontinues to accelerate, with an 8,8% output growth from 2012 to2013 (USDA, 2014). As a result, 9,4 million hectares have been plantedand 10 to 20 million are planned, including 60% in large-scale planta-tions (Colchester and Chao, 2011) (Fig. 1).

Fulfilling their obligation set-up in global biodiversity conventions,Indonesia has developed a comprehensive political, legal and institu-tional framework to preserve biodiversity, and especially orangutans.However, most development for agriculture takes place in the remoteforest frontier, where means to enforce compliance are low.

In this context, voluntary agreements have emerged as crediblealternatives to state regulations. These agreements have four key re-quirements: established on a voluntary basis, based on self-regulationamong key participants, involving suppliers and targeting a specificarea (or commodity) (Brouwer et al., 2003). Initiated for water andforest products (Forest Steward Ship Council — FSC) in the nineties,these agreements have flourished over the last ten years for agricul-tural commodities, especially palm oil (Roundtable on Sustainable

Fig. 1. Large-scale plantation established next to a Sumatran orangutan habitat.

439D. Ruysschaert, D. Salles / Ecological Economics 107 (2014) 438–446

Palm Oil — RSPO), soy (Roundtable on Responsible Soy — RTRS), sugarcane (Better Sugar Cane Initiative — Bonsucro), cotton (Better CottonInitiative — BCI), agro-fuels (Roundtable on Sustainable Biomaterials —RSB) and aquaculture (Aquaculture Stewardship Council).

Established as a yearly roundtable in 2003 and an association in2004, the RSPO has introduced “Certified Sustainable Palm Oil —

CSPO” to the market in 2008, labelling the final product with a distinc-tive CSPO trademark. In the RSPO, stakeholders from the palmoil supplychain agree to adopt sustainable “Principles & Criteria” they have previ-ously negotiated. These 1000-odd ordinary members are divided intoseven categories.1

RSPO's objectives are to promote the growth and use of sustainablepalm oil (RSPO, 2013a). Sustainability is not defined per se, but itresults from the application of eight principles2 with associated criteriaand indicators. Together they form a detailed fifty-page guidancedocument, which is subsequently adapted to individual countries, forexample Indonesia (RSPO, 2008). Regarding biodiversity, Principle 5specifically describes “Environmental responsibility and conservationof natural resources and biodiversity”. Endorsed in 2007, the documenthas been reviewed in 2013 (RSPO, 2013b) to strengthen in particular itsconservation criteria and indicators. As such, new criteria 5.2. requeststo identify endangered species and their habitats and tomanage the op-erations to maintain them. However, specific species, such as orangu-tans, are not mentioned as indicators, as they are included in thegeneral terminology.

Therefore, the objectives of this paper are firstly to analyse if theRSPO is truly effective in achieving its biodiversity conservation goals,especially the protection of endangered species such as the orangutan,

1 The seven categories are: 1. Palm oil growers, 2. Palm oil processors, 3. Consumergoods manufacturers, 4. Environmental NGOs, 5. Social NGOs, 6. Banks/investors and 7.Retailers.

2 The eight RSPO principles are: 1. Commitment to transparency, 2. Compliance withapplicable laws and regulations, 3. Commitment to long-term economic and financial via-bility, 4. Use of appropriate best practices by growers and millers, 5. Environmental re-sponsibility and conservation of natural resources and biodiversity, 6. Responsibleconsideration of employees and of individuals and communities affected by growers andmills and 7. Responsible development of new plantings and 8. Commitment to continuousimprovement in key areas of activity.

and if not, secondly to explain how these goals are diverted in theimplementation process.

2. Importance of the effectiveness question to research

As social contractsmade in the absence of the State, voluntary agree-ments take their legitimacy from generally accepted democratic (i.e.participation, transparency, inclusivity) and liberal (i.e. pragmatism,flexibility) principles,which should ensure that sustainability objectivesare achieved in implementation (Salles, 2011). Voluntary agreementssuch as the RSPO's thus face a two-fold challenge: on the one hand tochange the behaviour of the stakeholders involved on a permanentbasis, so that they incorporate a number of good practices, and on theother to ensure that companies police their own compliance.

Amajor concern for theRSPO is therefore to engender democratic le-gitimacy through itsworking procedures. This shift in priorities (namelyto operation instead of purpose) could explain why most studies havefocused on the RSPO's architecture and role as a forum to negotiateguidance document content. Architecture studies (Schouten andGlasbergen, 2011) cite the positive role of RSPO as one of the first orga-nisations able to develop a mainstream standard for sustainability and,optimistically, conclude that RSPO could change the market globally ifparticipants downstream of the supply chain (e.g. palm oil processors,consumer goods manufacturers and retailers) would engage with it se-riously. Large numbers of other studies have focused on the RSPO as anegotiating arena. They have found it to be, on the whole, democratic(Schouten et al., 2012), even though they demonstrate facilitators' influ-ence (Djama andVerwilghen, 2012), a prevalence of international NGOs(Daviron and Vagneron, 2012) and a structural deficiency in includingsome participant categories, such as small-scale farmers (Cheyns,2012) and radical NGOs opposing the agro-business model (Schoutenet al., 2012). These studies conclude that the structural efficiency ofthe scheme is reduced even though NGOs improve the system (Pyeand Bhattacharya, 2013), and that excluded participants, such as thesmall-scale farmers, can influence the system via successful strategiessuch as by enrolling experts (Cheyns, 2012).

In complete contrast to these architecture and operation studies, polit-ical ecologists have evaluated the global impact of RSPO on biodiversity

3 By alphabetic order the institutions are: Badan Pengelola Konservasi Ecosistem LeuserWilayah Aceh (BPKEL), Badan rekonstruksi dan rehabilitasi NAD-Nias (BRR), Biofuel Mer-chant, Birdlife, Center for International Forestry Research (CIFOR), Conservation Interna-tional, Convention on Biological Diversity (CBD), Convention on International TradeEndangered Species (CITES), Eye-on-Aceh, Food Alimentation Organization (FAO), ForestPeoples Programme, Greenpeace, Hutan, Indonesian Ministry of forests, International Fi-nance Corporation (IFC), Leuser International Foundation, Mawas Picture, Migros, PanEcoFoundation, Parliament of local district Barat Daya, Prince Charles Rainforest Project, SawitWatch, SIPEF, Socfindo, Sumatran Orangutan Society, UNESCO, United Nations Environ-ment Programme (UNEP), World Conservation Society, the World Agroforestry/Interna-tional Centre for AgroForestry (ICRAF), the World Bank, WWF and Yasasan PulauBanyak, Yayasan Ekositsem Lestari.

440 D. Ruysschaert, D. Salles / Ecological Economics 107 (2014) 438–446

conservation and social equity. They observe that deforestation and socialconflicts continue unabated in South-East Asia, notably Indonesia, despiteRSPO's steady growth in stakeholders' numbers involved since 2004. Theyconclude that the system is in transition to deep improvement (Edwardsand Laurance, 2012) or at best provides a limited learning tool (McCarthy,2012). In comparison to these two types of researches, this study isunique in the sense that it seeks to understand the practical implementa-tion of the guidance document after its negotiation, that is, themove fromintent to action. This is of interest for two reasons: firstly, to assess howeffective the RSPO is in biodiversity conservation, fundamental to justify-ing the existence of such a voluntary standard but often forgotten by re-searchers and stakeholders (Salles, 2006), a situation especially true forthe RSPO; and secondly, to understand how participants subvert theagreed principles, criteria and indicators during the implementation pro-cess. This allows the rather optimistic conclusions on the RSPO's architec-ture and operation to be contrasted with pessimistic conclusions on itsglobal impact.

3. Material and method

From a biodiversity conservation perspective, the RSPO can be un-derstood as an application case of the bargaining model (Coase, 1988),where growers adopt and implement the guidance document, andtherefore preserve areas of forest of high biodiversity value, to the ben-efit of the downstream firms (palm oil processors, consumer goodsmanufacturers and retailers) that demand it. At first glance, RSPO re-spects the two conditions for this model to work.

First, growers participate voluntarily to the scheme because theyseem to get an adequate financial compensation or premium. Thispremium must be higher than the cost the grower has to bear inimplementing the guidance document. This cost corresponds on theone hand to the forgone economic opportunity to convert the forestarea into an oil palm plantation for immediate economic gain and onthe other hand to the transaction costs linked to the internal auditingto get and maintain the certification.

Second, all other transaction costs (such as information, negotiationsand external supervision) must remain insignificant, which seems alsothe case in the RSPO. Indeed, the cost of maintaining the RSPO secretar-iat to provide information is extremely low for each RSPOmember (themembership fee is a €2000/year). Negotiation costs are alsominimal forthese big companies, as they choose electronic consultation wherepossible and physical meetings only a couple of times per year. Finally,the cost of external supervision is supported by the environmentalNGOs that play the role of monitors at no cost for growers and firms.

This paper formulates the hypothesis that while RSPO appears to bean application case of the bargaining model for outside observers, it isnot implemented properly for structural reasons, resulting in poor out-comes regarding the protection of the forest area, and especially theorangutan habitat. An initial reason could be that the premium maybe too small compared to the cost to meet the criteria in the guidancedocument resulting in the non-participation of most of the growers. Asecond set of reasons may be due to the implementation process ofthe guidance document. Participating growers could use at least fourdifferent strategies to reduce the size of the protected habitats: takingadvantage of the guidance document's imprecision, postponing deci-sions on contentious issues, concentrating only on the areas that canbe developed and finally breaching the requirements. To test thishypothesis, the research takes an actor/system theory approach whereactors are seen as rational agents from their own perspectives: theyact strategically to maximise their gain in the relationships (Friedberg,1991; Mermet, 1992), which is the behaviour promoted within theRSPO (Cheyns, 2012).

The analysis of the five possible reasons necessitated complementa-ry methods and access to a wide range of materials. The issue ofeconomic compensation is analysed first by modelling the grower's eco-nomic loss to comply with the guidance document, especially in fulfilling

ecological needs in orangutan habitat, second by interviewing growers,and third by following the evolution of the RSPO growers' number, size,and relationship with downstream firms as available from the RSPOwebsite and other public documents. The fact that the guidance docu-ment leaves too much room for interpretation is demonstrated byinterviewing actors that initially set up the RSPO, negotiated the contentof the initial guidance document (RSPO, 2008) and its revision (RSPO,2013b), comparing what the NGOs intend to get in terms of conservationwith what actually the guidance mentions. Contentious biodiversity is-sues in implementing the guidance document are analysed focussing onstakeholder discourse analysis — how these issues have emerged andbeen dealt with in the RSPO. Informationwas gathered first by in situ ob-servation as a representative from an environmental NGO between 2006and 2011, whichmeant attending six of the yearly RSPO roundtables, thegeneral assembly and the working groups dealing with biodiversity. Sec-ond, after leaving the NGO, this meant interviewing RSPO members in-volved in the RSPO, especially growers and environmental NGOs thathold institutional positions (e.g. secretariat, President). How the RSPOguidance document is implemented on the ground necessitated con-sideration of the RSPO in the wider context of oil palm development onthe orangutan habitat. This meant analysing the procedure for landacquisition for oil palm development from a forest area in Indonesia,interviewing Indonesian actors involved in the procedure (Governmentrepresentatives, parliamentarians and local communities) and severalfield visits a year in the Sumatran orangutan habitat between 2006 and2011 (Fig. 2). Finally, analysis regarding breaching the requirements inthe guidance document resulted in comparing the cases brought to theRSPO to the potential cases from literature, and interviewing key NGOsthat brought those cases (i.e. Greenpeace, Sawit Watch, Forest PeoplesProgramme, Sumatran Orangutan Society) to establish their rationalefor action.

To summarize, this study combines an in situ observation as a con-servation NGO representative with a systematic academic researchthrough 49 semi-structured interviews across 33 institutions3 afterleaving the organisation. In addition to these interviews, publicly avail-able information produced by the stakeholders since 2001 until Decem-ber 2013 was analysed.

Systemic participation and interviews with stakeholders seek tounderstand the empirical functioning of the RSPO by observing andmeasuring strategies of itsmembers. This needs first to assess resourcesof each of them (expertise, relationship outside the RSPO, such as themedia or government officials, control of information and the use of op-erational rules within RSPO); second to evaluate their specific objectiveand what limits their actions; and third to reconstruct the system ofactors to establish how relationships are structured and rules imposed.Sociological analysis of the discourses of these strategic actors allowsthe establishment of the diverse logic of actions for each actor category,highlighting points of convergence while revealing the inconsistenciesand limits.

4. Results and discussion

The study tested five RSPO shortcomings that explain why RSPOprotects very little orangutan habitat in reality: i) having a premium

Fig. 2. Oil palm plantation surrounding the Sumatran orangutan habitat.

441D. Ruysschaert, D. Salles / Ecological Economics 107 (2014) 438–446

that is too small, ii) toomuch scope for interpretation in the guidance doc-ument, iii) postponing contentious issues, iv) non-integration of RSPOwithin the socio-political-legal Indonesian context and v) breaching re-quirements. Each of these five shortcomings are developed and discussedbelow.

4.1. Premium too small

The premium paid by downstream firms to the palm oil grower forRSPO Certified Sustainable Palm Oil (CSPO) is much lower than thegrower's economic loss to implement the guidance document. Aspredicted in the bargaining model, most growers prefer not to enterthe agreement. This situation has two sides: too high a cost for thegrower and too low a premium from the corporations.

For the growers, certification is extremely costly,more than $10/tonneCSPO. First they must support fixed transaction costs linked to certifica-tion: the initial cost ($2 to $9/tonne CSPO) and the ongoing yearly cost($1 to $3/tonne CSPO) (Levin et al., 2012). Second they must supportthe foregone economic opportunity cost that depends directly on thesize of the conservation area. Setting aside ecologically meaningful areasfor orangutan conservation is particularly expensive: at least $10/tonneCSPO for a single orangutan. This is due to the fact that orangutan popu-lation density is markedly low, about one individual per km2: femalesare territorial with a home range reaching at least 1 km2 and males aresemi-nomadic with a territory that can reach more than 100 km2 (Wichet al., 2011). In addition to this direct economic loss, the maintenance ofconservation areas incurs additional grower's costs, as its taxation is

based on overall surface area and monitoring is necessary to preventlocal people from encroaching.

In contrast, downstream firms only give very low premiums to thegrowers: nothing for 53% of the CSPO sold on the market and only $2/tonne CSPO for an additional 26%. This is particularly linked to the factthat they adopted “Book & Claim” traceability. This method, developedby the palm oil processor AAK, is a certificate market. With its palm oilproduced and certified as CSPO, the grower receives GreenPalm certifi-cates that can be sold on a dedicated certificates market. The down-stream buyer buys these certificates to cover its purchases of normalpalm oil on the open market. In this context, the conventional supplychain is used and CSPO are mixed with other non-certified oils. Thefinal product, however certified, often has no CSPO palm oil becauseCSPO is only a small part of the global palm oil market.

For corporations, Book & Claim traceability is the cheapest method,not only because they give a very small premium to the grower, butalso because they do not have other additional costs. This is differentfrom the other three methods that involve additional costs either be-cause of physical separation of the CSPO from conventional palm oil(for “Identity preserved” and “Segregated”), or because of bureaucracythrough more detailed information on the origin (for the “Mass bal-ance”). However, the consumer cannot distinguish between thesemethods because RSPO has adopted a communication strategy thatdoes not differentiate between them (Crosbie, 2007),

Therefore, downstream firms largely adopt “Book & Claim” that onlycosts them an extra 0,3% compared to conventional palm oil sold on theinternational market: about 0,2% for CSPO price premium (or $2/tonne

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CSPO) and about 0,1% for financial transaction costs (or $1/tonne CSPO)for the management of the electronic auction. As a result, after 2009when the Book and Claim traceability system had reached maturity,many new downstream firms became RSPO members and publicallyannounced that they would only use CSPO palm oil (Fig. 3). In 2014,these amounted to 778 or 81% of the ordinary members (RSPO, 2014),andmany (such as Carrefour, Johnson& Johnson,Nestlé, Procter &Gam-ble and Unilever) publically committed to use 100% CSPO.

In contrast, very few growers do become RSPOmembers and certifytheir production because costs are too high compared to expectedbenefits. In Indonesia, all the smallholders that account for 40% of thepalm oil production and the overwhelming majority of large estate (98%of the 1217 large estates) (BPS, 2012) follow this logic.

Growers that actively pursue certification are limited to the ones thathave to do so to access theWestern market, which represent 13% of theWorld's palm oil market (USDA, 2014). These are huge companies thattogether hold close to 4 million hectares on lease (WWF, 2013) andtherefore could potentially supply more than 25% of the world market.

After proving that the compensation is too low, this research focuseson the few growers seeking certification, explaining the process bywhich the requirements defined in the guidance document aresubverted in the implementation process.

4.2. Taking advantage of the guidance document imprecision

From the outset, the guidebook set-up by Migros for its suppliers isvery restrictive. For example, it forbids chemical use and forest conver-sion. In negotiating the guidance document, conservation NGOs strivedto get clear criteria and indicators to forbid forest conversion, plantationon peat land and indicators specifically mentioning orangutans andtheir habitat.

The RSPO, taking into account the views of all participants in thesupply chain, and especially the Indonesian and Malaysian growers,made adjustments to this guidebook creating room for interpretation.As a result, even the last revision of the guidance document (RSPO,2013b), only requested reduction of chemical use, prevention of primaryforest conversion after November 2005 (allowing clearance of other typesof forest and primary forest before that date), minimizing plantation onpeat land and not mentioning specific species such as orangutans, butmore broadly endangered species.

Fig. 3. Semi-annual evolution of

These changes highlight the conflict between the need for efficiency(to reach the conservation goal) and inclusiveness (to take as many ac-tors on board as possible) of these voluntary standards (Busca, 2010). Asthe threshold to participate is often below environmental efficiency andas the voluntary agreement seeks to establish itself as an authoritativeglobal standard, the first step is to secure participation, rather than toimmediately seek efficiency.

The grower or the auditor can take advantage of the fact that thedocument be interpreted in various ways, for example to continue togrow on peat and postpone any deduction. The grower can also forgetto mention some of the most obvious indicators, such as the existenceof the Sumatran orangutan. It can also subjectively classify the “HighConservation Value Forests—HCVF”, the areas that should be conservedfor social or ecological values in the RSPO guidance document, todegraded land or secondary forest suitable for development. As legalprotection applies to the orangutan as a species without defining itshabitat, the growers can convert the degraded land, considered to bewithout biodiversity value, into palm oil plantations. The CSPO evalua-tor that is paid by the grower can further endorse this re-classification(RSPO, 2010).

As a result, in Sumatra, the orangutan habitat has been convertedinto palm oil plantation (RSPO, 2010; Wich et al., 2011) and Sumatranorangutans moved to the Gunung Leuser national park with logisticsupport from conservation NGOs that are RSPO members. Presentedas an achievement in saving orangutans, this translocation could inreality threaten the existing orangutan populations of the nationalpark as these populations already live at their ecological balance. Forthis very reason, orangutan reintroduction has been forbidden withinthe national park since the 1990s (Rijksen and Meijaard, 1999).

4.3. Postponing decisions on contentious issues

The contentious issues regarding the implementation of the guid-ance document are not dealt properly from a biodiversity conservationpoint of view. This situation results from the management-dominateddiscussions through which the stakeholders establish their power rela-tionships (Boltanski, 2009).

For the growers, estates should be established on a large scalein order to optimize production efficiency. For the conservationist,most, if not all of the remaining lowland forest should be conserved as

RSPO members by category.

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HCVF, especially due to its exceptional biodiversity (HCV, 2007): oil-palm should be planted without forest destruction (Fitzherbert et al.,2008) on degraded land (ZSL et al., 2011) as far as this is technicallyand economically feasible (Ruysschaert et al., 2011). This crystallizationof position on conservation areas is not newor specific to primary forest,as illustrated in the case of wetlands (Mermet and Barnaud, 1997) orsea-reserve (Deldrève and Deboudt, 2012) protection.

These twomutually exclusive views are discussed through a scientif-ic and management approach, which in essence would depoliticize theissue. Conservation organisations, made up of scientists, appreciatethis. But tropical biodiversity science is largely incomplete. As an exam-ple, some articles conclude that only large areas of forest should be con-served (Edwards et al., 2010), while others claim that small areas canalso be important depending on the species or the ecosystem to be pre-served (Struebig et al., 2011). To fill this knowledge gap, the RSPOestablished a Biodiversity Technical Committee at its general assemblyin 2006. Originally set-up temporarily to solve apparently technicalissues, but due to the permanent nature of the problem it was later insti-tutionalized into the permanent Biodiversity and High ConservationValues Working Group, which had held 23 meetings in total by the endof 2013. As belief is maintained that complete scientific knowledgewould allow decisive choices to bemade, there are, on the one hand, con-servationists trying to consolidate scientific information in the workinggroup and, on the other hand, growers exploiting incomplete informationto conserve the minimum possible, which, for example, leads all non-primary forests to be considered suitable for development (RSPO, 2010).

Since biodiversity is difficult to document scientifically, discussionshifted to criteria 7.3 of the RSPO guidelines, forbidding primaryforest conversion after November 2005. As growers had occasionallydestroyed primary forest, RSPO established a Compensation TaskForce to deal with these cases in 2011. Growers argue that compensa-tion must apply to all members taking into account different parame-ters: i) the historic responsibility of the member; ii) a distinctionbetween CSPO certified members and others; iii) an incentive to keepthe remaining forest; iv) its appropriateness to the case; vi) a distinctionbetween cases where the growers are directly responsible for theconversion or when conversion is the work of local communities; andfinally vii) scientific robustness. By the end of 2013, eight years andeight meetings after agreement over criteria 7.3, negotiations continuewithin the task force. NGOs over-invest into this exercise in the hopeof finding a definitive means to stop primary forest destruction, while,paradoxically, destruction continues, as a compensation mechanism isnot yet agreed.

With scientific knowledge of biodiversity not comprehensiveand the failure to implement the 7.3. criteria, NGOs put forward green-house gas emissions as a new argument. Primary forest holds between190 tonnes of carbon per hectare, compared to about 40 tonnes ofcarbon per hectare in an oil-palm plantation (Agus et al., 2013b). In ad-dition, carbon rich peat swamps, such as in Tripa, Kluet and Singkil inthe Leuser ecosystem, are natural carbon sinks and at the same timehave the highest densities of orangutans in the world (Wich et al.,2011). Drying and burningpeat land to establish oil palmplantations re-leases large amounts of greenhouse gases (Agus et al., 2013a), makingIndonesia the third largest emitter of greenhouse gas in the world. Fol-lowing the adoption of the resolution presented by Wetlands Interna-tional in November 2008, RSPO established a one-year Green HouseGas Working Group in 2009. The group could not complete its work,leading to the establishment of Green House Gas Working Group 2.This situation reflects grower intransigence, advancing three argu-ments: i) RSPO criteria do not give greenhouse gas emission thresholds;ii) precise greenhouse gas emissions are specific to each plantation (e.g.drainage depth, plantation age or chemical use); and iii) the need totake each grower's business situation into account (e.g. percentage ofplantation on peat). As a consequence, each grower can only reducegreenhouse gases on a voluntary basis, integrating this parameter inits operations.

Developmentwithin these three RSPO bodies illustrates the conflict-ing demands to include all participants and adapt to each local contextin the name of management principles (e.g. additionality, accountabili-ty, flexibility, inclusiveness, pragmatism, rationality and scientificrobustness) that are at the core of RSPO functioning. As reality is incom-mensurable, it is impossible to find a solution that fit all and each of thecases using these management principles.

In short, RSPO establishes bodieswhich discharge contentious issueswith scientific authority while at the same time marketing CSPO since2008. Within these RSPO bodies, meetings make marginal progresswithout reaching a final solution, as each step forward is a new sourceof discussion and views between NGOs and growers are irreconcilable.These RSPO bodiesmaintain their dominance based on constant changeand thus their capacity to incorporate NGO critics (Boltanski, 2009). As aresult, obvious contentious issues regarding the implementation of theguidance document, for example forbidding primary forest conversion,is not dealt properly from a conservation angle.

4.4. Non-integration of RSPO within the socio-politico-legal Indonesiancontext

RSPO members tend to focus only on the area it can develop andleave the other areas to the other actors from Indonesian society. There-fore, it fulfils its obligations in implementing the RSPO guidance docu-ment without respecting its spirit. This leakage results directly fromthe tension within the RSPO: its overall objective is to promote CSPOworldwide, but in practice it can only promote its members that pro-duce a small proportion of the global palm oil supply.

To gain a CSPO label, HCVF areas aremarked for conservation duringthe certification process. Notwithstanding this, the Indonesian statecarved out an entire concession, including HCVF areas, from the “Foreststate” domain, that is all the areas under State authoritymanaged as for-est, and earmarked it all for development as “Land for other use” (ArealPenggunaan Lain). Historically, the Forest state has been established bythe central government dispossessing local communities from manag-ing their forest in the name of development claiming that those landswere unused (Putri, 2010). However, in most of the islands, especiallyin Sumatra, the process of delimitation and demarcation of the Foreststate has never been completed and therefore local communities havelegitimate rights on these lands when a concession is established.

To deal with HCVF areas RSPOmembers interplaywith the other ac-tors from the Indonesian society involved in the oil palm sector at large.Thismeans a RSPOmember concentrates on the areas that can be devel-oped and lets all the other actors that are non-RSPOmembers (e.g. localcommunities, smallholders and large-scale estates) deal with the HCVFthat should be conserved. The government leases the HCVF areas to oneor some of these non-RSPO members indifferent to CSPO labelling.These non-RSPO members convert the forest into an oil-palm planta-tion. First described in 2009 (Colchester et al., 2009), this situation ex-plains a great part of Sumatra orangutan loss. Indeed, at the frontier ofthe Sumatran orangutan habitat, only three out of one hundred growersoperating in the area are RSPOmembers and not one of thefifty growersnewly established in the area (Eye-on-Aceh, 2007). Another striking ex-ample of this is the Tripa peat swamp forest on the coast of Aceh, a sixtythousand hectare forest area that is an integral part of world famousLeuser Ecosystem for harbouring the highest densities of orangutansglobally. The RSPO General Assembly resolution adopted in 2008 desig-nated Tripa as HCVF. However, the forest is being been converted intooil-plantation (Tata et al., 2014) through the combined actions of fivelarge-scale oil palm plantations and the local communities. One of themain growers operating had close business relationships with RSPOmembers sitting on the executive board, and therefore was under con-siderable pressure to preserve the remaining HCVF area in his conces-sion. The grower opted to sell the entire concession to a non-RSPOmember who could then develop this land into a plantation (AAL,2011).

444 D. Ruysschaert, D. Salles / Ecological Economics 107 (2014) 438–446

In conclusion, the HCVF established in a top-down manner by RSPOis not part of the national legal framework and does not benefit fromsocietal support (McCarthy, 2012). Therefore, RSPO members tend toconcentrate on the areas they can develop and HCVF areas that RSPOmay earmark for conservation tend to be given by the government toother economic actors to satisfy its revenue needs and the aspirationsof local communities striving to claim land.

4.5. Lack of effective external control system

Since production of the first CSPO trademarked oil in 2008 andGreenpeace's subsequent infringement complaint against this grower(Greenpeace, 2008), RSPO has established a complaint system to handlecases. The system is based upon three pillars: i) a database with detailsof each RSPOmember (identifying potential culprits); ii) a consultationand approval process for new operating permits (identification ofpotential problems); and iii) a complaints procedure (application of asanction mechanism).

So far, RSPO has had to handle 11 cases for illegal conversion of highbiodiversity value habitat in Indonesia, including one for Sumatranorangutan habitat (Sumatran Orangutan Society against Ibris palm).This number is about 10% of all the RSPO certified plantations inIndonesia. It seems little considering that each concession is of severalthousands hectares and that all the remaining lowland forest is of ex-ceptional biodiversity value (Conservation International, 2011), includ-ing the Sumatran orangutan habitat (Wich et al., 2011). Complaintsfrom local communities on land rights potentially will add another 11cases as they also deal with HCVF.

The detailed analyses of the complaint cases brought to the RSPOprovide some explanations. While any stakeholder (individual or orga-nized, RSPO member or not) can put forward a case, in practice onlyinternational NGOs (e.g. Greenpeace, Sumatran orangutan Society)are doing so regarding biodiversity loss. These NGOsmobilise consider-able resources in the long-term as each case lasts between 14 and36 months. This includes establishing coalitions of NGOs, getting localcommunity support, highlighting cases against the same grower inother countries (such as Malaysia or Ghana for Wilmar), publishing de-tailed reports proving emblematic species habitat loss (such as “Licenceto Kill” by Greenpeace againstWilmar) and seeking international mediaattention.

It is not that easy to mobilise these resources because the growersare powerful actors. Getting local community support is an on-goingchallenge. The forest destruction takes place around low-income com-munities where wages vary between $2,5 and $4,5 a day. Growershave a legal contract with the Indonesian state administration to oper-ate, while proof of local land-use rights can be difficult to establish(Silva-Castaneda, 2012), with little chance to win a court case (e.g. thelost case against Bumitama raised by Sawit Watch). Local communitiestend to prefer financial compensation (for example the case againstUnited Plantations raised by Sawit Watch), simply give up or eventurn around and state having pursued the company wrongly (as casesagainst Evans Group and Good Hope Holdings).

A second difficulty is to provide field evidence from existence ofendangered species. Entering concession areas is illegal, as these are pri-vate leases. The grower can get support from the local police to enforceits right, which makes it dangerous to enter the concession (as provenby the 2009 shooting in the leg of a villager in a concession on Tripa).

A third difficulty is that the growers can pursue aggressive commu-nication at international level, dismissing NGO campaigns. For example,Golden-Agri Resources andWilmar started to certify their plantations in2009 and at the same time pursued a marketing strategy that includedInternet sites, flyers, newsletters and annual sustainability reports(Wilmar, 2010; GAR, 2011).

These constraints suggest that NGOs do not bring all cases to theRSPO, but only focus strategically on a limited number, allocatingthem considerable resources. Indeed, when mobilizing extensive

resources, NGOs achieved results, such as the “zero deforestation” com-mitment by Wilmar. But, when they did not, they failed to get any im-pact. This would explain why most of the complaint cases (12 out of22) target only four specific growers (Bumitama Agri, Golden Agri-Resource, United Plantations and Wilmar).

The reduced number of infringement cases brought to the RSPO isgenerally presented as proof that the procedure has been correctlyfollowed, allowing CSPO certification. In reality, this shows more thelack of complainant capacity to put forward comprehensive casesconfronted by powerful opponents.

It is difficult to precisely establish the proportion of the infringementcases that are not brought to the RSPO. However, this analysis suggeststhat most are not, which would be in line with NGOs' claims that onlyone-third of the cases are put forward.

5. Conclusion and perspectives

The five shortcomings complement each other. Too low a premiumexplains why all smallholders are excluded and why less than 2% ofthe Indonesian growers are RSPO members and gain certification. Thistwo percent, which comprises most of the biggest producers, subvertthe principles and criteria in the guidance document during the applica-tion process because for four reasons: i) the existence of toomuch roomfor interpretation, ii) the postponing of the contentious issues through amanagement-dominated discussion; iii) the non-integration of RSPOwithin the socio-politico-legal Indonesian context; and iv) the lack ofeffective external control. As a consequence, the RSPO is not effectivefor conservation purposes, particularly in conserving the large tracklowland forested areas needed by charismatic species, such as theorangutans.

This research did not find that RSPO's emergence has been effectivein conserving the Sumatran orangutan and its habitat. Over the period2004–13, that is since RSPO came to existence, overall net deforesta-tion loss in and around orangutan habitat in Sumatra was around500,000 ha with a significant part due to oil palm expansion (WRI,2014; Wich et al., 2011).

The current situation at the RSPO is a conflict of interests betweenconservation NGOs that point out growers for not implementing prop-erly the RSPO guidance document from a conservation perspectiveand growers that use strategies to decrease the conservation areas tomaximise profits. Such a confrontation conceals that downstream sup-pliers are the real beneficiaries. Indeed, in its present form, RSPO fulfilsin a very economical manner initial Western downstream firms' con-cerns in setting up the scheme: to secure their long-term supply andprotect their reputation (RSPO, 2002). As a result, the observed leakagesmean that in practice RSPO tends to strengthen oil-palm production'slarge-scale, output-intensive rationale, despite initial intentions toreform the system: a paradox observed in other similar schemes(Busca, 2010; Brouwer et al., 2003). As it stands, RSPO functioningquestions long-term conservation NGOs participation, as they donot achieve their initial conservation goals while legitimizing the system(Ruysschaert, 2013).

At first glance, producing orangutan habitat friendly palm oil withinthe RSPO would require addressing the five structural failures in thebargaining model: adequately compensate growers for economic loss;give precise criteria and indicators regarding distribution of orangutansand their habitat; take decisions on contentious issues from a conserva-tion angle; link with stakeholders from Indonesian society to get theirsupport; and finally implement an effective external control system byinvolving the Indonesian state that has ultimate legal authority.

This ideal situation could be difficult to implement for societal andecological reasons. Froman Indonesian society perspective, itmaybe in-correct to compensate big growers for land not developed and rightfullyclaimed by local actors.Whatever the amount, it would be likely ineffec-tive to stop conversion. From an ecological reason, conservation areaswould likely be specific sites separated by oil palm plantations, which

445D. Ruysschaert, D. Salles / Ecological Economics 107 (2014) 438–446

would need to be avoided, as these plantations are ecological barriersfor species such as orangutans.

Therefore, conserving meaningful conservation habitat would re-quire going beyond RSPO and addressing orangutan conservation with-in the wider socio-ecological context. This suggests considering theissue from a bottom up approach, with orangutan habitat conservationas a part of regional Indonesian development planning that includes ag-ricultural development. RSPO could meaningfully contribute to this ef-fort. First, downstream firms could compensate the Indonesian state atlocal level for the forgone economic opportunity to convert the forestarea into oil palm plantation. This fund could be used at local level tosupport the local economy. This support means a palm-oil sector re-form, with investment towards smallholders that currently provideonly half the productivity (two tonnes of palm oil per hectare) of alarge-scale estate and towards the 7.3 million hectares of degradedland in Indonesia (JPNN, 2010). Second, NGOs could re-direct theiractivities in monitoring overall deforestation on the ground, whichcan be cheaply done by remote sensing, and advocacy campaignon the entire supply chain so that truly include environmental costof preservation.

Acknowledgments

I warmly thank Satu Ojaluoma, Graham Roberts, Stephen Caudwelland three anonymous reviewers for critical reviews and English editing,Rizwan Zen and GrahamUsher for themap (Fig. 2), Olivier Tichit for theRSPO graphic (Fig. 3).

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