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Under scrutiny: Palm oil watchdog to toughen sustainability audits

[KUALA LUMPUR] The Roundtable on Sustainable Palm Oil (RSPO) plans to introduce a more rigorous auditing process at a meeting in November, a move that could address criticism over inadequate assessments and help restore faith in the industry watchdog.

Green groups are likely to welcome stricter audits as the right step towards curbing deforestation, habitat destruction and human rights abuses across plantations in top growers Indonesia and Malaysia. But it may not be received well by producers as the changes could make it tougher for them to comply and also hurt revenues.

The industry has already been shaken by RSPO's decision to withdraw its sustainability certification from Malaysia's IOI Group, one of the world's biggest producers, following complaints that the firm had illegally cut down rainforests in Indonesia and cleared peatland for plantations.

Given the certification is a globally-recognised standard, the RSPO suspension prompted major consumer firms such as Nestle and Unilever to drop IOI as a supplier.

The RSPO - a body of consumers, green groups and plantation firms that aims to promote the use of sustainable palm oil products - now plans to make the certification process more transparent and allow reassessments of initial audits to ensure standards are being met, said Paul Wolvekamp, the head of an internal task force reviewing RSPO's auditing process.

The task force was formed late last year after a scathing report from UK-based Environmental Investigation Agency (EIA) that said auditors hired by plantations were conducting "woefully substandard assessments" and in some cases colluding with growers to disguise violations of the RSPO standard. It has called for the RSPO to address loopholes in the audit process.

"One component is to increase transparency and to give access to parties who are concerned to detect weaknesses," MR Wolvekamp, also a member of the RSPO board of governors, told Reuters. He added that a public register with details of the auditors' performance will be worked on.

"The critics need to be a part of this process so we can collectively say where our weaknesses are and where can we address it and what is the next step forward."

A key part of the audit reform will be a move to empower Accreditation Services International (ASI), an independent group that monitors auditors, to conduct a rigorous surveillance and reassess findings of the initial audit, Mr Wolvekamp said.

ASI, which is headquartered in Germany, will also create a platform for third parties to submit any complaints against the auditors and improve training for the auditors with a focus on tackling labour issues. RSPO is also looking for ways to address conflicts of interest between growers and auditors, he said.

Currently, plantation firms directly hire auditors to assess their compliance with the RSPO standards, a method critics say could force auditors to give a verdict their clients want.

To avoid this, the EIA has recommended that RSPO members pay into an escrow account that is held by the RSPO and then the watchdog selects and pays auditors directly.

"There will be companies in the RSPO membership who will want to water down any tightening of the certification scheme," said EIA's senior campaigner Jago Wadley. "The hope is the more progressive members will force the less progressive members to do the sensible, right thing."

"And we also need more robust enforcement by the RSPO itself," said Mr Wadley.