ACKNOWLEDGEMENTS CONTENTS

Executive summary 8 We would like to thank the following for their schemes which came back to us with written feedback and comments: Sergio Bafoni, Lafcadio feedback and comments, including the RSPO, the Introduction 14 Cortesi, Catharine Grant, Aida Greenbury, Jonas Rainforest Alliance, Fairtrade, ISCC, MSPO, RTRS, Hulsens, Cristina Mestre, Shiobhan Pearce ProTerra and PEFC. We incorporated these where Certification – definitions 18 and Nancy Vallejo. possible and where appropriate. The responses Contents we received from the schemes are all available on Furthermore we would like to thank several Chapter 1: Inherent limitations of certification 20 the Greenpeace International website. researchers that helped complete the report, including Rachel Wheeler, Barbara Kuepper Designer: Sam Walter, Festoon Studios Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility 26 from Profundo, Nick Mawdsley, Mario Rautner, Front page image: Rebecca Spencer and Rob Sykes. Governance and decision making 28 24 June, 2013 - Indonesia. Open flames on dry We shared the draft text about the different tree branches in an area of recently deforested Standards 30 schemes from Chapters 2 and 3, including the peatland in the PT Rokan Adiraya Plantation oil Traceability and transparency 34 draft scorecard, with the respective schemes palm concession. Contents for comments. We would like to thank the Auditing 38 Implementation 40

Chapter 3: Analysis of the major certification schemes 52

Biofuels certification schemes 54 International Sustainability and Carbon Certification (ISCC) 54 Cocoa and coffee certification schemes 60 Fairtrade 60 Rainforest Alliance/UTZ 63 Palm oil certification schemes 67 Roundtable on Sustainable Palm Oil (RSPO) 68 'Certification does not equal the Indonesian Sustainable Palm Oil / Malaysian Sustainable Palm Oil (ISPO/MSPO) 75 Soya certification schemes 77 Round Table on Responsible Soy (RTRS) 78 definition of deforestation-free.' ProTerra 81 Forest and wood certification schemes 84 1 Marc Engel, chief supply chain officer Unilever Forest Stewardship Council (FSC) 84

Chapter 4: Conclusions and the way forward: Forest protection goes beyond certification 92

References 102

1 Webster, B. (2020, 24 August)

2 Greenpeace International - Destruction: Certified 3 5 26 Greenpeace International - Destruction: Certified - Destruction: International Greenpeace clearly and demonstrably met the indicator. met and demonstrably clearly there when answer a ‘No’ received Schemes that indicator very little evidence was no or the indicates that A ‘Partial’ answer was met. all only in part (not the indicator scheme met or that certain degree) only to a the elements, or for available insufficient information there was a complete assessment. Schemes received a 'Yes' if all the principles of ecological farming or forestry are included in their standards. Schemes received a 'Partial' if Schemes received included in their standards. are if all the principles of ecological farming or forestry a 'Yes' Schemes received included. if less than 50% are and a 'No' included in their standards of the principles are 50% or more of HCVs, including in national (interpretations include specific language on IFLs or full protection if their standards a 'Yes' Schemes received not mentioned. when IFLs were and a 'No' a 'Partial' when application varied Schemes received of) standards. 'Partial' is included in their standards. Prior and Informed Consent (FPIC) Free, requiring when specific language a 'Yes' Schemes received conventions. including via international recognised, but Indigenous and community land rights are indicates that FPIC is not required of the International Labour Organization conventions include at minimum compliance with the core standards means the scheme's A 'Yes' a 'Partial' received and a living wage. Schemes organise the right to aspects such as child labour, key covering without any exceptions, (ILO), insufficient. are requirements when the standards' affiliated companies/entities subsidiaries and associated or for a company's include requirements if the standards a 'Yes' Schemes received a 'Partial'received when Schemes standards. either also be certified of the scheme's to in major breach or not carry out activities that are insufficient. that are requirements have they Schemes received a 'Yes' if key decision making bodies (board, AGM) are represented by a majority of non-business/producer a majority of non-business/producer by represented are AGM) decision making bodies (board, if key a 'Yes' Schemes received majority representation. have if industry/producers and a 'No' representatives a 'Partial', and schemes Community Members received schemes that are a 'Yes', ISEAL Code Compliant members received Schemes that are a 'No'. neither received that are is plantations. If there to of natural forest of the conversion include clear language on the prohibition standards means the scheme's A 'Yes' then a 'Partial' was given. any conditionality or limitations in this regard, eg of natural ecosystems (or equivalent, of the conversion include clear language on the prohibition standards means the scheme's A 'Yes' then a 'Partial' was given. is any conditionality or limitations in this regard, lands'), including peatlands. If there 'natural ecosystems’ as well ‘natural the cut-off date should fully cover obtain a 'Yes', To strong. 2008 is considered A minimum cut-off date of before 2008, a 'Partial' but not for natural ecosystems is before was given. If the cut-off date for forests as ‘forest’. a 'Partial'received if Schemes to obtain a 'Yes'. scheme is needed for a of HCVs and conservation areas Specific language on protection is used. areas') 'high biodiversity as protecting (such HCVs and conservation language or language that only partially areas weaker covers This scorecard is an assessment based on based is an assessment scorecard This drawing and judgement, analysis Greenpeace's the in Chapter 3 of analysis presented upon the the schemes available about report, information the feedback in the literature, online and well as themselves, as from the schemes received Schemes received own experience. Greenpeace’s a question when the schemea ‘Yes’ answer to 6 20 25

PEFC 5 14 23 FSC 19 13

ProTerra 12 18

RTRS 4 11 17

ISPO/MSPO 10

RSPO 9 3 16

est Alliance 8 2 No Rainfor & UTZ merged 15 24

 Fairtrade 7 22  (cocoa and coffee) ISCC Partially 21 Code Compliant? 1 Yes Intact Forest Landscape (IFL) Intact Forest protection? for Indigenous and respect Requires land rights? on associated companies Requirements level? applied at group ISEAL ecosystem conversion, No other natural including of peatlands, allowed? and cut-off date for forest Strong ecosystem conversion? natural of HCVs and protection Requires conservation areas? the principles of ecological Requires agriculture/forestry? Addresses labour rights? Addresses No deforestation or forest conversion conversion or forest No deforestation plantations allowed? to Majority non-business in key representatives decision making?

GOVERNANCE AND Certification Scheme Scorecard:

KEY: DECISION-MAKING STRENGTH OF STANDARDS 4 needed to be effective at halting ecosystem destruction and rights abuses. and rights destruction ecosystem at halting be effective to needed How well selected certification selected How well aspects key perform schemes against Certification scorecard: scheme Certification Scheme Scorecard: Scheme Certification 7 emediation protocol for social harms only, for social harms only, emediation protocol egistry of complaints, grievances or appealsegistry of complaints, grievances er ISCC (2020b) pp.9-10, companies that fail toer ISCC nsufficient information. meet all ‘Major Musts’ and at least 60% of ‘Minormeet all ‘Major Musts’ and at least Musts’ for Principles 2–6 will not be certified if the within 40 days.non-conformity is not corrected that do not comply with Principle 1Companies certification. ISCC from excluded are not restoration. No r found. P I Has r

37. 35. 36. 38. Greenpeace International - Destruction: Certified - Destruction: International Greenpeace vance procedure only. only. procedure vance y reports not made public at this time for vance procedure only. only. procedure vance ge producers: yes (except for tea). Smallholder (except yes ge producers: airtrade has one approved CB, its subsidiaryairtrade has one approved nsufficient information on complaints and their nsufficient information on chronology andnsufficient information on chronology Summar UTZ certificate holders. Lar tea, no for cocoa (also for coffee, yes groups: cane sugar and juice). F I I status. Has draft grie Has grie FLOCERT. of complaints.resolution

28. 29. 30. 33. 34. 31. 32. ound FPIC is too weak, and in weak, and is too ound FPIC /www.ilo.org/dyn/normlex/en/f? eenpeace (2015) for the principles ofeenpeace (2015) airtrade p.12 (2019a) International SCC allows genetically modified crops (see ISCC(see SCC allows genetically modified crops in national standards protection nconsistent IFL See Gr I (2020b)). I F The language ar issome of their endorsed national schemes FPIC not included. See eg https:/ p=NORMLEXPUB:12100:0::NO::P12100_ILO_ CODE:C169 Only GPS points used, not maps ecological farming. A 'Yes' means effective procedures and mechanisms are in place. 'Partial' means there is a procedure or mechanism but it is not considered or mechanism but it is not considered in place. 'Partial' is a procedure means there and mechanisms are procedures means effective A 'Yes' or mechanism. is none or no information could be found on the existence of a procedure means that there 'No' and/or transparent. effective A 'Yes' means maps and details on ownership of sourcing areas are published on the scheme's website, or there is a link on the website to on the website to is a link website, or there on the scheme's published are areas of sourcing details on ownership means maps and A 'Yes' If only some website is insufficient. or certificate holder's on the CB's only available and ownership details maps Having that information. is ‘Partial’. published then this maps are scheme's is a link on the website, or there on the scheme's published means summary are of audit assessments reports or the results A 'Yes' a 'Partial' made public. the published reports. when only some of the reports Schemes received are website to also allow if they a 'No' Schemes received supply. or 100% pure identity protected segregated, only allow if they a 'Yes' Schemes received other supply chain models. in their auditing requirements. requirements or CBs rotation auditor have when they a 'Yes' received Schemes have of funds payment the direct to prevent their clients, including between the CBs and built in a firewall have if they a 'Yes' Schemes received a tender have reportvalidated, and/or they account until the assessment been has holding the certificationfee in an escrow such as by party a third which decides on the CB for a client. through process its complaints mechanism, a registry of complaints with clear access to when at minimum their website provides a 'Yes' Schemes received of these elements is missing, schemes of the complaints. If one or more and information on the resolution their status and chronology, present. indicates that none of the elements are a 'Partial'. 'No' received been reported, including have no major breaches aspects (see above) on key means that in the implementation of the standards A 'Yes' certified abuses, by ecosystem destruction and/or human rights breaches of deforestation, companies / in certifiedareas. Whether and case review been reported websites, a, literature has been assessed on the basis of information on the schemes' have standards NGOs. by studies/research bodies for any violations of scheme their accreditation including by the schemes, by taken actions are means strong A 'Yes' language strong 'Partial' incentives. schemes have means that the penalties or negative actions include Strong standards. identified, or that are when breaches sufficient action take not always but may violating standards the consequences for regarding to judge. insufficient information was there

21. 23. 25. 26. 27. 22. 24. 35 PEFC

FSC otection and 34

ProTerra tially meets this. 33 RTRS airtrade (2020) International nsufficient requirements on conservation areas. requirements nsufficient on both HCV protectionrequirements nsufficient on both HCV protectionrequirements nsufficient natural ecosystems more broadly. natural ecosystems more optional. conservation areas I I only states the standard and conservation areas; and does not on HCV areas’, conversion ‘no of HCV’s. maintenance and protection require I variations and large and conservation areas endorsed schemes. across F No specific language on HCV pr MSOP par

15. 16. 17. 18. 20. 19.

ISPO/MSPO

o

RSPO 27 38 28 32

est Alliance

Rainfor & UTZ merged 29 30 37 eas, and 2016 for ‘natural lands’ eas, and 2016 for ‘natural  Fairtrade

 36 31

(cocoa and coffee) v 2018 llows up to 5% (small proportion) 5% (small withllows up to

ISCC A of naturalconditions, as well as allows conversion managed or intensively ‘semi-natural’ to forest forests. ‘plantation-like’ 2008 No cut-off date Jan 2014, also because UTZ does not talk about other ecosystems No None 2009 for HCV ar Date after 2008 1994 – a good cut off date, but does not apply t

13. 7. 8. 9. 10. 11. 12. 14. 6. 2020 y towards Partial having by y towards oups: yes (though rather (though oups: yes Summary reports of audit or results assessments made public? or 100% identity protected Segregated, supply only? pure independence of audits via a Full between CB and company? ‘firewall’ such of standards, No major breaches or HCV destruction as deforestation, of human rights abuses (eg breaches labour and land rights)? proportionate consequences Strong, for companies or CBs violating scheme standards? compensatory Clear and effective procedures and restoration remediation of and mechanisms for past breaches being implemented? standards key Complaints and grievance mechanisms, Complaints and grievance and information on complaints made public? Requirement for rotation for rotation Requirement and/or CBs? of auditors Maps and ownership of sourcing areas areas of sourcing Maps and ownership available? made publicly llows up to 5% (very limited proportion) withllows up to Certification Scheme Scorecard: standard supercedes the previous RA standard RA the previous supercedes standard and the UTZ standard. MSPO goes some wa Value, no planting on land with High Biodiversity including primary forest. A Based on our understanding that the RA of naturalconditions, as well as allows conversion managed or intensively ‘semi-natural’ to forest forests. ‘plantation-like’ Co certification systems. Smallholder gr TRANSPARENCY & AUDITS IMPLIMENTATION no. producers: Large ambiguously worded). TRACEABILITY

6 4. 5. Table Notes Table 1. 2. bestpracticefor commitmentsto vers 3. EXECUTIVE SUMMARY

Certification on its own has not helped companies meet their 2020 commitments to exclude deforestation from their supply chains.

© Micha Patault / Greenpeace INTRODUCTION companies and governments, including 15 March 2017 - Worker in a smallholder oil palm plantation in Apouh, members of the Consumer Goods Forum (CGF Cameroon. The Société Financière des Caoutchoucs (Socfin), one of the The purpose of this report is to assess the – a global network of major manufacturers, leading oil palm and rubber tree plantation operators in Africa, plans to extend its plantations, threatening forests. effectiveness of (mainly voluntary) certification retailers, service providers and business for land-based commodities as an instrument to associations) have made commitments to address global deforestation, forest degradation eliminate deforestation and reduce degradation. conversion? These questions form the basis for the standards and their implementation, and other ecosystem conversion and associated Many also looked to certification as a way this report. The analysis is based on an extensive meaning some companies may be able to obtain human rights abuses (including violations of to address these issues while being able to literature review of research on certification, and certification and make a claim of ‘sustainability’ Indigenous rights and labour rights). Ultimately continue producing and consuming agricultural the views of certification experts. At its core is an while continuing with business-as-usual Executive summary the aim is to inform decision making by and forestry commodities. assessment of nine major certification schemes destructive practices. Another problem is that governments and companies on what role Questions answered in this report & spread over five land-use sectors based on a certification pushes onto the consumer some certification can play as a tool for cleaning up methodology: While certification of forest and review of publicly available information (together of the responsibility for evaluating the claims supply chains, what reforms are required and ecosystem risk commodities (FERCs) has grown with feedback from the schemes themselves). made about different certified products, which what other measures are needed to address the globally over the past decades, deforestation and is rightly borne by companies and governments wider biodiversity and climate crises. natural ecosystem destruction have continued. ANALYSIS: INHERENT LIMITATIONS – an evaluation consumers may be ill equipped Background: The United Nations Environment Does this mean that certification has failed? to make. Further limiting the effectiveness of Programme (UNEP) reports that between 70% How effective are certification schemes at Certification has several inherent limitations. certification is that these schemes do not – and and 80% of total deforestation globally is addressing these issues? What inherently limits First, certification is a market-based were never designed to – address the problem caused by expansion for agricultural production, the effectiveness of certification? Are there mechanism, in which the primary incentive of growth in supply or demand for FERCs. This mainly animal farming and soya and palm common themes in the performance of different producers and consumer companies have for growth puts additional pressure on land and plantations.1 Together with natural ecosystem certification schemes? What are the strengths meeting environmental and social standards subsequently risks further driving deforestation conversion and degradation, deforestation is and weaknesses of some of the most widely is not the ‘sustainable’ production of products and conversion of other natural ecosystems. a major contributor to the climate emergency used schemes? What reforms are required, and but the reward of increased market access Furthermore, unsustainable producers currently and biodiversity crisis. In response, many what role could certification play in the future? and sales. There are also large differences continue to find alternative markets for non- What other measures are needed to address between certification schemes in terms of certified goods (a phenomenon called ‘leakage’). deforestation, forest degradation and ecosystem their governance, the quality and rigour of 1 IRP (2019) p.90

8 Executive summary Greenpeace International - Destruction: Certified 9 ANALYSIS: KEY ASPECTS DETERMINING both certified and uncertified materials. Full CERTIFICATION SCHEME EFFECTIVENESS transparency (public disclosure of the entire supply chain) is similarly lacking. Further, Governance and decision making: The most schemes do not require the provision main issue in the governance of certification of maps or data for publication on remaining schemes is that the business sector tends to be natural ecosystems or conservation values in disproportionately represented in these schemes’ certified areas. None of the schemes requires full governing bodies, giving it an outsized role in transparency concerning the ultimate ownership decision making and greater influence over the of certified companies and their corporate groups. schemes. This ‘entrenches power in favor of There is variation across schemes, ranging from corporations – the entities they seek to regulate’.1 essentially no transparency to full reports of audits and maps being made publicly available. Standards: Certification schemes’ standards should at a minimum include: no deforestation Auditing: Auditing suffers from the inherent or natural ecosystem degradation or conversion; flaw that scheduled audit visits present only a protection of high conservation values (HCVs), snapshot of conditions at a particular location, High Carbon Stock (HCS) forests, conservation at a specific time, and allow companies areas and Intact Forest Landscapes (IFLs); to ‘prepare’ for the audit. Furthermore, restoration of converted ecosystems and certification schemes often only specify restitution of social harms; Free, Prior and performance standards for the primary producer Informed Consent (FPIC); Indigenous and or processor. In the case where multiple community land rights; and labour rights. certificates are used in the supply chain, they However, in many instances, they do not or are often audited by different certification are simply too weak to prevent environmental bodies (CBs), lacking transaction verification. and social harms. Certification schemes also Finally, it is common practice for CBs to be paid differ in their scope; they may cover certain directly by the clients they are auditing, who can important risk areas, such as environmental always choose another CB if they are dissatisfied damage or Indigenous rights, but not address with the results of an audit, creating financial others, such as the use of child labour, pesticides dependence on the clients and an intrinsic or genetically modified organisms (GMOs). conflict of interest. Most schemes do not require corporate group- Implementation: While certification schemes level compliance with certification standards, claim they have a positive impact, systematic resulting in consumers being offered certified reviews of the evidence by academics and other ‘sustainable’ products containing commodities researchers typically point to ‘sparse, limited, produced by companies linked to ecosystem and often context-specific benefits’. Certification destruction and/or human rights abuses. Further, schemes often fall short in how their standards standards may change depending on the country are interpreted, implemented and enforced. and region. This adaptability has a twofold The case studies in the report show how the result: it can either strengthen these standards RTRS, ProTerra, FSC and RSPO have all certified when locally adapted or weaken them whenever companies that have been accused of breaching national standards depart considerably from the standards and/or having links to environmental global principles and criteria. destruction and/or human rights abuses. Traceability and transparency: A truly unbroken And when certificate holders or CBs breach traceability system enabling commodities to be certification standards, the consequences are tracked from source to end product and vice versa not necessarily swift or severe. is not implemented for any FERCs. Of particular risk are ‘mixed’ product systems that contain

1 MSI Integrity (2020) p.66

© Victor Moriyama / Greenpeace 25 March 2019 - Bahia, Brazil. Industrial soybean plantation in Barreiras.

10 Executive summary Greenpeace International - Destruction: Certified 11 CONCLUSIONS ensuring compliance with legal requirements companies. Moreover, all of a scheme’s smallholders and communities whose livelihoods from governmental authorities to third-party requirements should be enforced across the depend on forests and other ecosystems. While some certification schemes have strong auditors, thereby weakening the enforcement of whole of each corporate group’s operations, Companies must begin by immediately requiring standards, weak implementation combined with such requirements. including those linked by ownership, and implementing strong environmental and a lack of transparency and product traceability management and/or other forms of control. social standards for commodity production, means even these schemes have major failings. FUNDAMENTAL REFORMS NEEDED FOR setting up traceability and transparency systems Certain schemes may have a localised positive Independence of CBs and auditors: A new CERTIFICATION SCHEMES • for all commodities, proactively monitoring their impact, such as strong individual country or local structure that acts as a ‘firewall’ between supply chains and supporting and financing forest application. However, far too many certified Minimum requirements for fundamental reform the two parties is needed, preventing the and natural ecosystem protection and restoration. companies continue to be linked to forest and of certification schemes include: direct payment of funds, impartially selecting ecosystem destruction, land disputes and the best qualified CBs to do assessments THE WAY FORWARD: MOVING BEYOND human rights abuses. The conclusion thus is • Equitable governance: Ensuring that and verifying the satisfactory performance that certification is a weak tool to address global schemes’ governance bodies have a SUPPLY CHAINS forest and ecosystem destruction. Currently, majority of representatives of social and of assessments and audits. To meet the demands of social justice and certification enables destructive businesses to environmental interests – including Strong rules and immediate enforcement • address the climate, biodiversity and health continue operating as usual. By improving the Indigenous and local communities – so that are necessary, including sanctioning or image of forest and ecosystem risk commodities crises, comprehensive and well-structured decisions are made in the interests of people expelling certificate holders or members and so stimulating demand, certification risks strategies are needed. Governments in both and the planet, rather than profits. who breach standards. actually increasing the harm caused by the producer and consumer countries, individually expansion of commodity production. Certification • Standards that include at a minimum: 1) Full and together, must develop and implement THE WAY FORWARD: policies that favour people, the planet and schemes thus end up greenwashing products respect for Indigenous Peoples’ rights and CLEANING UP SUPPLY CHAINS biodiversity, to rapidly halt and reverse the linked to deforestation, ecosystem destruction livelihoods, and labour rights; 2) prohibition loss and degradation of all natural ecosystems and rights abuses. of direct and indirect deforestation Producer country governments must enact and limiting the global temperature rise this (including conversion to plantations), forest THE ROLE OF CERTIFICATION comprehensive legislation (if it does not already century to a maximum of 1.5°C. These plans degradation and conversion and degradation exist) to protect forests and other natural should include rights-based, legal protection The weaknesses and flaws identified in the of other natural ecosystems, including, but habitats from destruction or degradation. of at least 30% of land by 2030, representing certification schemes assessed in the report not limited to, peatlands; 3) establishment of Legislation should include the obligation to all ecoregions, along with the restoration of at make it clear that certification should not be strong (early) natural ecosystem conversion publish maps of all supply areas for complete least 500 million ha of natural forests. These relied on to deliver change in the commodity cut-off dates; 4) restoration and remediation supply chain transparency and traceability, policies must be socially just and always protect all human rights. They must be combined with sector. At best, it has a limited role to play requirements for deforestation/ecosystem safeguard Indigenous and local communities and workers’ rights, and ensure monitoring and efforts to reduce the consumption of certain as a supplement to more comprehensive and conversion prior to the cut-off dates, as well independent verification and enforcement of commodities and products, addressing the issue binding measures. Following fundamental as restitution of social harms; 5) protection reforms, including strengthened standards and compliance with this legislation. of growth as well as just distribution. of High Conservation Values, High Carbon full transparency, certification can play a role to Stock forests, conservation areas and Intact Consumer country governments and, where help lift environmental and social performance applicable, regional jurisdictions such as the Forest Landscapes; 6) adapted provisions on the ground. However, it is imperative to EU must adopt laws that prevent products that to support small farmer/smallholder recognise its shortcomings and develop realistic are linked to forest and ecosystem destruction expectations about the applications that implementation. Certification should also or degradation or violation of related human certification can have and under what conditions require ecological production. rights being sold to consumers. This must it can be effective. It is also important to • Full traceability and transparency: Schemes be done through due diligence and measures recognise and assess the differences between to ensure full supply chain traceability and must, at a minimum, require a comprehensive certification schemes, which, as this report transparency (public disclosure). Legislation (unbroken) traceability system for certified shows, vary in terms of governance, standards, should also include rules on due diligence transparency, implementation and effectiveness. products from farm to consumer. Actors for financial institutions to ensure that they at all stages of the supply chain must Certification must not be accepted as a are neither directly nor indirectly linked to or way to demonstrate compliance with legal be certified with transparent reporting financially supporting ecosystem destruction or requirements related to the protection of forests, of transactions, and volumes tracked to degradation or human rights violations. ecosystems and human rights, considering all ensure an uncompromised chain of custody. Cooperation between consumer and producer the limitations of these schemes and their issues Certification schemes should also require full countries is also necessary to foster the adoption with regard to effectiveness and credibility. transparency, including maps of certified of responsible, ecological production methods and Embedding certification into regulatory areas (including conservation areas) and effective restoration and remediation practices. frameworks would shift responsibility for details on the ultimate ownership of certified Special attention should be paid to the position of

12 Executive summary Greenpeace International - Destruction: Certified 13 Introduction INTRODUCTION

The purpose of this report is to assess the effectiveness of (mainly voluntary) certification for land-based commodities as an instrument to address global deforestation, forest degradation and other ecosystem conversion and associated human rights abuses (including violations of Indigenous rights and labour rights).

1 Ultimately the aim is to inform decision making increases. UNEP reports that between 70% and © Kemal Jufri / Greenpeace by governments and companies on what role 80% of total deforestation globally is caused 13 November 2013 - Kalimantan, Indonesia. Cleared peatland forest in an oil palm certification can play as a tool for cleaning up by agricultural production, mainly animal concession owned by PT Ladang Sawit Mas, a subsidiary of Bumitama Agri Ltd. supply chains, what reforms are required and farming and soya and oil palm plantations.2 what other measures are needed to address the Underlying the ecological collapse is the wider biodiversity and climate crisis. neoliberal economic system, based on growth, causes appalling loss of biodiversity,4 often During the late 1980s and intensifying in the consumerism and extractivism. The world’s forests are a crucial defence against violates the rights of Indigenous Peoples and 1990s and 2000s, the public became aware of spiralling climate change, and are home to Agricultural and industrial forestry expansion other communities and contributes massively the growing role of multinational corporations many Indigenous and local communities and also contributes to the conversion or degradation to climate change, jeopardising our chances in perpetrating major environmental harms innumerable species of animals and plants. of other natural ecosystems such as wetlands of limiting the global temperature rise to 1.5° and human rights abuses, and thus of the The current global health crisis and ongoing (especially peatlands), savannahs, shrublands Celsius compared to preindustrial levels – the responsibility they bear. Numerous campaigns 5 ecological and climate breakdown share many and grasslands.3 This continuous destruction goal set in the Paris Agreement and reinforced by non-governmental organisations (NGOs) of the same drivers, including the destruction by the Intergovernmental Panel on have exposed corporate bad behaviour, yet of forests and other natural ecosystems by Climate Change (IPCC) Special Report the governments of the producer countries 6 industrial agriculture – as humans encroach on Global Warming of 1.5°C. that host these companies’ operations have into previously natural habitats and pathogens 1 Everard, M., et al. (2020) failed to create or enforce laws to hold them accountable for contributing to such harms. transfer from wild animals to humans, the risk 2 IRP (2019) p.90 4 IPBES (2019) Consumer country governments have likewise of further diseases like COVID-19 emerging only 3 See eg Bonanomi, J., et al. (2019). 5 UNFCCC, The Paris Agreement [Website] failed to take any effective actions, such as 6 IPCC (2018)

14 Introduction Greenpeace International - Destruction: Certified 15 regulating the markets, and kept protecting Declaration on Deforestation,7 Target 15.2 of the – in part to level the playing field.14 There is a broad range of certification schemes17 (together ‘their’ industries and economic growth models. United Nations Sustainable Development Goals realisation that what seemed like the solution for with feedback from the schemes themselves) Multilateral initiatives and institutions such as (UN SDGs),8 Aichi Biodiversity Target 59 and tackling environmental destruction and cleaning and the views of certification experts. the Food and Agriculture Organization (FAO), the New York Declaration on Forests (NYDF).10 up supply chains 30 years ago has failed to deliver The report begins by defining some key terms the United Nations Conference on Environment Many companies and some governments looked on its promise, and that there is an urgent need and concepts, such as certification schemes, and Development (UNCED), the International to voluntary measures, including certification, for other, more comprehensive measures to fight certification bodies, labelling and verification. Tropical Timber Organization (ITTO) and the as a way to reach these goals11 – but as the 2020 the climate and biodiversity crisis. However, Chapter 1 discusses the inherent limitations of 1992 Earth Summit proved unable to deliver deadline approached it became clear that the many actors do still see certification as a major certification as an instrument to address global solutions to the crisis of deforestation. So, CGF companies would grossly fail to meet their part of the solution, arguing for example that in deforestation, forest degradation and other in the absence of any adequate domestic or 2020 zero deforestation commitments12 and that the absence of strong laws voluntary certification ecosystem conversion for the production of international accountability mechanisms and the other initiatives would similarly fall short. schemes can go some way towards preventing FERCs. Chapter 2 then outlines the key factors in recognition of the need for corporations to Indeed, as the Convention on Biological Diversity deforestation and protecting human rights. This that influence the effectiveness of certification limit their reputational damage and market confirmed in its 2020 Global Biodiversity often goes hand in hand with advocating for the schemes in meeting that overarching goal. loss, market-based ‘solutions’ began to arise. Outlook report, ‘The recent rate of deforestation need to increase the demand for ‘responsible’ or Chapter 3 supplements this general discussion by The private sector, civil society and to some is lower than that of the previous decade, but ‘sustainable’ – ie, certified – soya, palm oil or detailing the strengths and weaknesses of some degree governments collaborated to establish only by about one third, and deforestation timber/wood products, with the idea being that if individual certification schemes for biofuels, voluntary frameworks.1 Since the late 1980s the may be accelerating again in some areas. Loss, more of these products are traded the result will cocoa, coffee, palm oil, soya and wood products. number of such multi-stakeholder initiatives, degradation and fragmentation of habitats be a decrease in deforestation and other harms Because there are too many schemes for this including voluntary certification schemes remains high in forest and other biomes.’13 linked to the production of these commodities.15 report to be able to analyse all of them in detail, increased rapidly,2 and they have expanded to Civil society, together with a range of While certification of forest and ecosystem risk only certain schemes are discussed, with a focus address a range of aspects of the production policymakers, companies and even some commodities (FERCs)16 has grown globally over on those that are most widely used and/or that process, including deforestation and protection certification schemes, has begun to realise the past decades, deforestation and natural are claimed by governments and corporations to of Indigenous rights. that standalone voluntary measures such as ecosystem destruction have continued. Does exemplify best practice. The Forest Stewardship Council (FSC) was certification are not enough to bring about real this mean that certification has failed? How Finally, based on the report’s findings, the one the first of many voluntary certification change and are arguing for regulatory measures effective are certification schemes at addressing conclusions and the way forward discuss schemes that was set up with multi-stakeholder deforestation, forest degradation and other whether certification serves its purpose, governance and commodity management forms of ecosystem conversion? What inherently 7 Seven European countries have signed the Amsterdam consider the appropriate role for certification standards. Over the years, much effort – Declaration on Deforestation committing to limits the effectiveness of certification? Are and the reforms needed, and suggest what including by Greenpeace,3 working with the deforestation-free, sustainable commodities. See there common themes in the performance Amsterdam Declarations Partnership, About [Website]. further measures governments and companies FSC4 and to some degree the Roundtable on of different certification schemes? What are 8 ‘By 2020, promote the implementation of sustainable should focus on to clean up supply chains in Sustainable Palm Oil (RSPO)5 – has been focused the strengths and weaknesses of some of the management of all types of forests, halt deforestation, order to protect the world’s biodiversity and on improving the standards and enforcement of most widely used schemes? What reforms are restore degraded forests and substantially increase ecosystems, to limit global warming to below such certification schemes. afforestation and reforestation globally.’ Source: United required, and what role could certification play 1.5°C and to help prevent future pandemics. Nations Sustainable Development Goals Knowledge in the future? What other measures are needed In 2010, members of the Consumer Goods Platform, Sustainable Development Goal 15 [Website]. to address deforestation, forest degradation and Forum (CGF – a global network of major 9 ‘By 2020, the rate of loss of all natural habitats, including ecosystem conversion? These questions form manufacturers, retailers, service providers and forests, is at least halved and where feasible brought the basis for this report. business associations) set themselves a deadline close to zero, and degradation and fragmentation is significantly reduced.’ Source: Convention on Biological of 2020 to eliminate deforestation from their Diversity, Aichi Biodiversity Targets [Website]. The present analysis is based on an extensive 6 supply chains. The same deadline was also set 10 The NYDF includes targets to end natural forest loss literature review of research on certification, a by several international commitments regarding by 2030, with a 50% reduction by 2020. In addition, it review of publicly available information about a halting deforestation, such as the Amsterdam calls for restoring 350 million hectares of degraded and deforested lands by 2030, supporting the private sector in eliminating deforestation from the supply chains of major 14 MSI Integrity (2020) pp.31,48 agricultural commodities by 2020, and providing financial 1 Bartley, T. (2003), Chan, S., & Pattberg, P. (2008), MSI support to reduce emissions related to deforestation and 15 See eg International Institute for Environment and Integrity (2020) forest degradation. See New York Declaration on Forests, Development, Four actions to reduce the ‘forest About [Website]. footprint’ of commodities [Website]. 2 Liu, P. (2010), OECD (2016) 11 Lambin, E. F., & Thorlakson, T. (2018), Neeff, T., & 16 FERCs are commodities whose extraction, harvesting or 3 In this report, mentions of ‘Greenpeace’ should be read as Linhares-Juvena, T. (2017), Pacheco, P., et al. (2021) production has, or risks having, a detrimental impact references to Greenpeace International unless otherwise on forests, other ecosystems and related human rights, indicated. 12 See Chain Reaction Research (2020, 5 March), such as soy (mostly used to feed farm animals), palm 17 This does not include changes certification schemes Ecobusiness (2018), Global Canopy (2020), Greenpeace 4 See eg Greenpeace (2008a). oil, beef, timber, rubber and cocoa. See Greenpeace have proposed to make or will make to their standards (2018b) and Greenpeace (2019c). (2020) p.5. and systems in the future. 5 Greenpeace Southeast Asia (2018, 15 November) 13 Secretariat of the Convention on Biological Diversity 6 Consumer Goods Forum (2010, 29 November) (2020) p.7

16 Introduction Greenpeace International - Destruction: Certified 17 Certification - definitions CERTIFICATION

– DEFINITIONS © Dave Taylor / Greenpeace 2 August 2016 - Canada Ruby-throated hummingbird (Archilochus colubris) in Canadian boreal forest.

in theory provides the purchaser/consumer with accredited by a recognised accreditation body, an indication of the product’s sustainability.7 such as Assurance Services International (ASI) Certification schemes for FERCs set a range the International Sustainability and Carbon for the FSC and RSPO.10 In simple terms, the 3 An important aspect of certification is product or of social and environmental standards with Certification (ISCC) and REDCert. role of accreditation bodies such as ASI is to which production of these commodities should material traceability, usually implemented via Certification is often used by companies that ensure that CBs are following the rules set by the comply. These standards usually comprise a set a chain of custody (CoC) system and standards. produce or trade FERCs – or manufacture or certification schemes. Additional guidance on of principles and criteria (with the principles Traceability is defined as the ability to follow sell products containing them – to reassure sustainability standards is provided by bodies setting out the broad elements of the standard a product or its components through stages of customers that they or their suppliers have taken such as the ISEAL Alliance.11 and the criteria defining what is required for each the supply chain (eg, production, processing, steps to minimise the negative environmental element), together with verifiable indicators of manufacturing and distribution); this is Verification is a simpler approach that does and/or social impacts linked to the production compliance with the criteria. An area, product, required if guarantees are to be made about the not necessarily form part of a certification of the commodities concerned, and that farm, manufacturer or processor (eg mill) is certification status of a product. scheme; it can be defined as the ‘assessment their products can therefore be considered and validation of compliance, performance, certified by a particular certification scheme 4 Companies or consultancies serving as ‘sustainable’. Yet no certification scheme and/or actions relative to a stated commitment, when it is assessed as meeting the standards certification bodies (CBs) undertake the task can make a claim that its certified products standard, or target’.12 An example would be set by that scheme. of ensuring, by means of third-party audits, are truly sustainable, as what is actually ‘second-party’ independent verification of that the certified organisations (producers, Whereas certification relates to a particular sustainable in relation to forests, land and the extent to which a company is complying 5 processors, downstream companies) comply management area or processing facility, agriculture is not known. with its No Deforestation, No Peat, No membership is what allows an organisation with the required social and environmental Certificationlabelling is a ‘promise’ or claim Exploitation (NDPE) policy.13 As part of a to participate in governance of the scheme. In criteria. Each CB has an approved list of auditors that a product meets the criteria set out by a certification scheme audit, the process of some schemes (eg the FSC), a company can – typically consultants or employees of the certification scheme, and is mostly done at the assessing whether organisations are complying be a certificate holder but does not need to be CB – who can perform the audits. The certified consumer goods manufacturers’ end.6 Typically with the required social and environmental a member.1 For other schemes, like the RSPO, organisations themselves are usually responsible incorporated into a product’s packaging, labelling criteria may also be referred to as ‘conformity 2 for commissioning these third-party audits, and membership is a prerequisite for certification. assessment’ or ‘verification’.14 bear the costs.8 Most certification schemes have Participation in almost all certification schemes 3 European Commission, Voluntary schemes [Website] accreditation requirements for CBs based on is voluntary, although in some cases the schemes 4 For example, Unilever defines ‘sustainable sourcing’ of International Organization for Standardization serve to enable companies to comply with palm oil as purchasing only from certified sustainable (ISO) requirements.9 They require CBs to be legal requirements – for example, compliance sources. See Unilever (2020) p.3. 10 ASI, Scheme owners we work with [Website] with the European Union’s Renewable Energy 5 ISO 14021 on self-declared environmental claims says 11 ISEAL Alliance, Who we are [Website] Directive (EU RED) sustainability criteria ‘The concepts involved in sustainability are highly complex and still under study. At this time there are 7 Retail Forum for Sustainability (2011) 12 Accountability Framework Initiative, Definitions – is ensured by certification schemes such as Monitoring, verification, reporting, and claims [Website] no definitive methods for measuring sustainability or 8 See eg Carlson, K. M., et al. (2017), Food and Agriculture confirming its accomplishment. Therefore, no claim of Organization of the United Nations (2018) and Food and 13 Accountability Framework Initiative, Core principles achieving sustainability can be made.’ See ISO (2016) Agriculture Organization of the United Nations, Forest – 11. Monitoring and verification [Website], Wilmar 1 See FSC, Home [Website], and FSC, Members [Website]. Clause 5.5, p.5. certification [Website]. International (2018) 2 RSPO, RSPO certification [Website] 6 Liu, P. (2010) 9 ISO (2012) 14 FSC (2014) p.3

18 Certification - definitions Greenpeace International - Destruction: Certified 19 INTRODUCTION

CHAPTER 1:

This chapter provides some Chapter 1: Inherent limitations of certification reflections on the inherent limitations of certification, INHERENT looking at its intended purpose, the wide variation in quality between certification schemes, the responsibility that is shifted to consumers and the fact that LIMITATIONS OFOF problems of growth in demand for FERCs and leakage are not solved CERTIFICATION (nor meant to be) by certification.

Chapter 1 - Inherent limitations of certification

© Ulet Ifansasti / Greenpeace 20 11 December 2016 - West Kalimantan, Indonesia. A recently cleared area in an oil 21 palm concession owned by PT Damai Agro Sejahtera, part of the Bumitama group. Focus on strengthening decrease the production and consumption of levels of assurance.9 Weaker, corporate-driven has been the case with the weaker PEFC adopting 1 15  certain forest and ecosystem risk commodities schemes that provide limited assurance may some FSC policies and standards. However, as market access, position altogether. The RSPO, for example, goes as far even certify as ‘sustainable’ products containing discussed in the box on page 89, the variability and profits rather than as to forbid its members even to ‘make claims materials that have contributed, directly or in the national schemes the PEFC has endorsed which imply that the removal of palm oil from a indirectly, to clearly unsustainable practices such means that it may not in fact deliver the expected sustainability product is a preferable social or environmental as the clearance of natural forests or human rights level of ‘sustainability’ assurance. A commodity can be defined as ‘an economic sustainability outcome to the use of RSPO abuses – a fundamental dishonesty that misleads 5 good, usually a resource, that has full or certified sustainable palm oil’. consumers. (see eg the analysis of the Programme Shifting responsibility for the Endorsement of Forest Certification 3 substantial fungibility: that is, the market treats onto consumers instances of the good as equivalent or nearly Misleading label of [PEFC] on page 89). 1 2 so with no regard to who produced them’. In  In the case of national or international Certification pushes some of the responsibility other words, regardless of where or by whom sustainability with wide guidelines with which different certification for evaluating the credentials and the validity of a commodity like palm oil or soya is produced, variation in the quality of schemes are deemed to show compliance, the environmental and ethical claims made about a ultimately it is the same product which inconsistencies between schemes mean that product onto the consumer. The responsibility essentially has the same value on the global certification schemes the guidelines themselves are only as strong as should instead rest with producers, traders, market. Opportunities to increase commodity manufactures, retailers and governments, There is little consistency between the their weakest link. An example is the European profitability include preferential market access, who should ensure that only products free various certification schemes in terms of their Feed Manufacturers’ Federation (FEFAC) Soy price premiums and cost reductions. One key 10 of deforestation, ecosystem destruction and definitions of forests and ecosystems that Sourcing Guidelines, which set a sustainability issue is that, in the absence of strong and human rights abuses are traded and sold. This should be protected, their treatment of historical baseline for importing soya into the European effective regulatory frameworks in producing transference is not only unjust but also to a large deforestation and their requirements for market. Of the 18 schemes that comply with and consuming countries, cost reductions can extent ineffective, as the purchasing decisions of remediation or restoration. More broadly, there the guidelines and are classified by FEFAC as be achieved through what can be described 11 a large proportion of consumers are of necessity are large differences in the quality and rigour sustainable – five of which are traders’ own as ‘bad practices’, such as poor labour and driven by price rather than environmental of the standards and their implementation.6 second-party schemes – 10 reportedly rely on social practices, land grabbing, shortcuts on and social justice considerations.16 The global Yet because certification is increasingly being national legislation that differentiates between environmental standards or tax avoidance. 12 economic recession caused by the COVID-19 equated with sustainability, despite their legal and illegal deforestation. The problem with crisis – which is having a disproportionate impact Within this context certification is a market- differences all of these schemes and their a focus on illegal deforestation alone is that it on those with limited purchasing power and based mechanism, in which the primary advocates are able to cultivate a positive image.7 does not address deforestation as such, and states choice with regard to consumption – has only incentive producers have for meeting may legalise deforestation to accommodate soya In many cases industries have created new exacerbated this situation.17 environmental and social standards is the reward producers and allow further expansion. FEFAC’s certification schemes with weaker standards in of increased market access or price premiums.2 2021 Soy Sourcing Guidelines include protecting Furthermore, the aforementioned variation in response to existing schemes with more rigour, Instead of incentivising high performance natural ecosystems as a ‘desired’ criterion (with the quality of certification schemes may not be enabling them to continue with business as usual a cut-off date of no later than 2020), but it is still against standards as a major outcome, a key 8 clear to consumers, who are often ill equipped but with a certification claim. In some instances 13 focus is on increasing the demand for or market not considered essential. A deeper analysis of to distinguish between commodities certified major commodities traders have even set up share of ‘sustainable’ (ie, certified) products, FEFAC and other guidelines, including the PEFC by weaker and stronger schemes.18 Consumers their own voluntary standards, which can have even when the actual sustainability of those and RED, can be found in Chapter 3. typically distinguish only between products the effect – intentional or not – of undermining products cannot be guaranteed.3 labelled as certified and those that are not. more credible schemes and confusing the In some cases where there are competing Companies using weaker schemes can thus reap Another issue is that the very existence of a market. For example, ADM, Amaggi, Bunge and schemes, weaker schemes have taken steps to 14 the same market benefits as those using stronger certification scheme for a commodity tends to Cargill each have their own standards for soya bring themselves in line with the stronger ones. schemes, removing much of the incentive for strengthen that particular commodity’s market production; while all of these standards claim This can ultimately have a positive effect, with the investing in more robust certification. position, and may discourage efforts to promote to supply certified sustainable (or ‘responsible’) less robust schemes eventually becoming more the substitution of alternative commodities soya, they offer very different provisions and similar to the stronger ones – for example, this whose production may be less harmful4 or to

5 RSPO (2017a) p.2 9 Kusumaningtyas, R., & van Gelder, J. W. (2019) 15 OECD (2016) pp.11-12 1 Wikipedia, Commodity [Website]. See also Chen, J. (2020, 6 A deeper analysis of various land use–related 10 FEFAC, Responsible sourcing [Website] 14 February). 16 Kaczorowska, J., et al. (2019), Lehmann, J., & Sheffi, Y. certification schemes can be found in Voigt, M. (Ed.) 11 ITC Standards Map, FEFAC European Feed Manufacturers’ (2019) 2 See Liu, P. (2010) and Pavel, C., et al. (2016). (2019). Federation [Website] 17 Food and Agriculture Organization of the United 3 As ISO 14021 states, ‘At this time there are no definitive 7 Changing Markets Foundation (2018) 12 Kusumaningtyas, R., & van Gelder, J. W. (2019) p.24 Nations, Q&A: COVID-19 pandemic – impact on food and methods for measuring sustainability or confirming 8 Examples include the PEFC scheme, which is a response agriculture [Website] its accomplishment. Therefore, no claim of achieving 13 FEFAC (2021) p.17 to the FSC, and some weak biomass labels such as ISCC sustainability can be made.’ See ISO (2016) Clause 5.5, p.5. 18 OECD (2016) and the Sustainable Biomass Program (SBP), as well as 14 For example, the PEFC adopted similar requirements for 4 Changing Markets Foundation (2018) p.86 the endless other efforts of the industry to self-label. controversial wood sources in its CoC standard to those implemented by the FSC for its ‘controlled wood’. See PEFC (2020) and FSC (2017).

22 Chapter 1 - Inherent limitations of certification Greenpeace International - Destruction: Certified 23 4 Certification schemes do not 5 To address the issue of  and are not designed to limit leakage, no one measure the growth of commodities is enough The focus on producing more for less cost is ‘Leakage’ happens because certification tends the dominant business model in companies to be required by downstream companies across the world. A fundamental problem and consumers in niche markets such as in with the growth in production of a particular Europe and the West, while business as usual commodity, however, is that it puts additional continues in other countries, such as India, pressure on land, and subsequently risks further China and Indonesia (although these markets driving deforestation and conversion of other are starting to move towards certification natural ecosystems.1 This is most visible where too). Unsustainable producer companies, new markets are emerging for commodities. which are commonly part of corporate groups Certification schemes do not – and were never that include certified companies, often find designed to – address the problem of growth in alternative ‘leakage’ markets for non-certified supply or demand; some schemes, like the FSC, products, limiting the ability of certification even have a strategy of growth.2 Certification to drive change on the ground.4 Unsustainable can thus mislead consumers, giving the producers may also be encouraged to move into impression that a certified product is ‘green’ or expand in jurisdictions where there are laxer and ‘sustainable’, no matter how much of it is sustainability and certification requirements. produced and consumed. A good example is crop- Rather than being eliminated, the destructive based bioenergy: increased demand ultimately environmental impacts that the sustainability drives forest degradation and/or land conversion standards and certification schemes hoped for other crops which are displaced to make room to avoid are thus simply displaced – a for the bioenergy crops, generating greenhouse phenomenon known as the spillover effect.5 gas (GHG) emissions and so fundamentally undermining the goal of the industry.3 Any certification scheme applied to bioenergy is thus effectively a greenwash.

PT Megakarya Jaya Raya (PT MJR) Oil Palm Concession in Papua © Ulet Ifansasti / Greenpeace

1 Pendrill, F. (2019) 2 FSC (2015c) © Ulet Ifansasti / Greenpeace 4 Chain Reaction Research (2018) p.1 31 October 2013 - Central Kalimantan, Indonesia. Orangutans 3 Gao, Y., et al. (2011), Lapola, D. M., et al. (2010), Popp, J., et 5 See eg Bastos Lima, M. G., Persson, U. M., & Meyfroidt, P. at a feeding station run by Orangutan Foundation International. al. (2014) (2019), Heilmayr, R., Carlson, K. M., & Benedict, J. J. (2020) and Meyfroidt, P., et al. (2020).

24 Chapter 1 - Inherent limitations of certification Greenpeace International - Destruction: Certified 25 INTRODUCTION

Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility

CHAPTER 2:

This chapter examines the effectiveness of certification schemes at addressing global deforestation, forest degradation and human Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility KEY ASPECTS rights abuses associated with the production of FERCs, by exploring the common influencing aspects. The effectiveness and credibility of a certification scheme depend on a range of factors, including: its governance and the THAT DETERMINE independence of its financing, processes and decision making; the strength and scope of its standards; physical traceability in the direct supply chain and the transparency of a corporate group’s1 production activities across CERTIFICATION its operations (not limited to those directly responsible for the certified product); the way a scheme uses and controls its label and claims; the required frequency of audits and the quality and independence of the auditing system; SCHEMES’ the auditing system’s level of transparency; the possibility of sanctions; and the rigour with which any sanctions are enforced and implemented. This chapter groups these aspects into five key areas – namely governance and EFFECTIVENESS decision making, standards, traceability and transparency, auditing and implementation – and reviews the general effectiveness and credibility of certification schemes AND CREDIBILITY in relation to these elements.

1 The AFi defines a corporate group as ‘The totality of legal entities to which the company is affiliated in a relationship in which either party controls the actions © Ulet Ifansasti / Greenpeace or performance of the other.’ See Accountability 29 June 2013 - Riau, Indonesia. Forest fires in an area of recently Framework Initiative, Definitions – Different types of deforested peatland near Tanjung Baru village, Pangkalan Kerinci supply chain actors [Website]. subdistrict in Pelalawan Regency. The village lies beside an oil palm 26 concession owned by PT Pusaka Megah Bumi Nusantara (PMBN), a palm 27 oil company belonging to the Asian Agri group (a member of the RSPO). Furthermore, larger and more powerful actors, such as agribusiness corporations and global traders, are often in a position to dictate standards to smaller and less powerful producers, which may end up being excluded from certification schemes altogether if they cannot afford the investment necessary for Governance and the certification process. This has been found to be the case for soya5 and for independent decision making palm oil smallholders.6 That said, there are also schemes – especially within the Fair Trade movement – that have been created intentionally to enable positive participation of marginalized producers in global trade,7 and some schemes are making CORPORATE POWER IS ENTRENCHED – efforts to address corporate dominance. An OVERREPRESENTATION OF BUSINESS example is the RSPO’s Smallholder Support ACTORS IN DECISION MAKING Fund, which aims to improve participation The business sector tends to be of smallholders by, for example, providing 8 disproportionately represented in certification assistance with the costs of certification. schemes’ governing bodies, giving it an outsized role in decision making.1 When the FAILURE OF SCHEMES TO ADHERE TO performance standards for certification schemes BEST PRACTICE STANDARDS are being developed and implemented, the The ISEAL Alliance aims to strengthen market interests of influential corporations sustainability standards and provides a standard tend to carry more weight than the interests of requirements framework for certification Indigenous and local communities, consumers schemes. Its membership is open to all multi- and other stakeholders, or the need to address stakeholder sustainability standards and the relevant social and/or environmental issues accreditation bodies that demonstrate their 2 in the most effective way possible. This is ability to meet the ISEAL Codes of Good Practice in part also due to the fact that standards are and accompanying requirements, which continuously being adapted into complex sets emphasise transparency, openness and broad of principles in order to apply them in very stakeholder consultation and dialogue.9 ISEAL different contexts. It is difficult for civil society Code Compliant membership can be considered to keep up with or match the amount of an indicator of scheme strength, but with lobbying done by multinational corporations, ISEAL being governed by its members and not which have extensive resources to dedicate independently auditing member compliance,10 3 to preserving their interests. As a result, the the extent to which they actually adhere to the recent MSI Integrity report Not Fit-for-Purpose Codes is not always clear. concludes that multi-stakeholder initiatives © Jonne Sippola / Greenpeace (including certification schemes) ‘entrench Certification schemes can also apply to be ISEAL 6 September 2018 - In Inari, Lapland, Greenpeace and Sami Community Members (formerly ‘subscribers’), people are demonstrating against industrial exploitation of power in favor of corporations – the entities the Great Northern Forest in the Sámi territory. they seek to regulate’,4 whereas people and the rather than Code Compliant members, but environment, not corporations, should be at the that only requires them to commit to the heart of governance. organisation’s mission and not to demonstrate Indonesian Sustainable Palm Oil (ISPO, where compliance with the Codes of Good Practice.11 CBs are accredited by the ISPO Commission), 5 Elgert, L. (2012) p.296 This clearly is less of a guarantee of system often use national accreditation bodies, 6 OECD (2016), Rietberg, P., & Slingerland, M. (2016) 1 MSI Integrity (2020) p.66 strength than full membership. which lack comprehensiveness, independent 7 Commerce Équitable France et al. (2020) guidance and oversight.12 2 Marin-Burgos, V., Clancy, J. S., & Lovett, J. C. (2014) Schemes that are not ISEAL Code Compliant 8 RSPO, Introduction RSSF [Website] 3 Changing Markets Foundation (2018) pp.19-20, MSI members or Community Members, such as 9 ISEAL Alliance (2014); see also ISEAL Alliance, ISEAL Integrity (2020) p.66 12 See Malaysian Palm Oil Certification Council, membership [Website] Malaysian Sustainable Palm Oil (MSPO) and Accreditation of certification bodies [Website], and 4 MSI Integrity (2020) p.66 10 ISEAL Alliance (2018) Ministry of Agriculture of the Republic of Indonesia 11 ISEAL Alliance, Become a member [Website] et al. (2015).

28 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 29 Certification schemes have emerged sector by sector and do not all share the same scope. For example, they may cover certain important risk areas, such as environmental damage or Indigenous rights, but not address others, such as the use of child labour, pesticides or GMOs.

Standards LACK OF GROUP-LEVEL ACCOUNTABILITY Certification schemes widely fail to take into account the relevant activities of all companies within a corporate group3 and to require group- WEAK STANDARDS wide compliance with the certification standards In some instances certification schemes create (see ‘Traceability and transparency’ below). This standards that are too weak to ensure that frequently results in consumers being offered deforestation, other ecosystem conversation certified ‘sustainable’ products containing and associated human rights abuses are commodities produced by companies that are actually being addressed. This happens when still actively linked to deforestation, human schemes set standards that are weaker than rights abuses or other problematic issues through international norms or are otherwise regressive, other parts of their group, as only a part of use ambiguous language and/or make key their production is required to comply with the © Mitja Kobal / Greenpeace standards ‘optional’.1 given certification criteria.4 20 August 2016 - Romania. Tree in Carpathian forest. The FSC is a notable exception with its Policy DIFFERING SCOPE OF STANDARDS for Association,5 but it nevertheless uses a To protect natural ecosystems and respect rather weak definition of what an ‘associated WEAKENING OF STANDARDS THROUGH JURISDICTIONAL-LEVEL APPLICATION human rights a certification scheme should organization or individual’ is. In addition, its ADAPTATION TO LOCAL CONDITIONS UNPROVEN include standards on at least the following: enforcement of the policy is limited, inconsistent deforestation (conversion of forest to plantation and very slow.6 The RSPO also requires Most certification schemes have the ability Some certification schemes are moving to or farmland) and forest degradation; degradation membership (and thus compliance) to extend to to change their standards (normally at the jurisdictional certification. This means that a and conversion of other ecosystems, including all companies within a corporate group that have ‘indicator’ level) for different countries or whole district, province, state or even country peatlands; restoration of converted ecosystems an interest in palm oil;7 however, it frequently regions to suit local conditions or national is being certified, rather than an individual and restitution of social harms; cut-off dates fails to enforce this requirement, in part as contexts. The FSC relies on this flexibility for concession or management unit. For example, after which ecosystem conversion is prohibited; a result of the complex, informal and (likely the implementation of its global Principles the RSPO is developing a jurisdictional approach 9 protection of high conservation values (HCVs), often deliberately) opaque structures of many and Criteria for Forest Stewardship, the to certification and is in the process of certifying High Carbon Stock (HCS) forests, conservation corporate groups within the industry.8 RSPO allows ‘national interpretations’ of its in their entirety the state of Sabah in Malaysia; areas and Intact Forest Landscapes (IFLs); Free, Principles and Criteria10 and the PEFC is simply the district of Seruyan in Central Kalimantan, Prior and Informed Consent (FPIC); Indigenous a collection of different national standards.11 Indonesia; and Ecuador.12 The idea behind this and community land rights; and labour rights. While some scope for adaptation to national approach is to act as a catalyst for a broader These are thus the key elements against which 3 The AFi defines a corporate group as ‘The totality of contexts is an advantage, especially if that commitment to sustainability with the support the standards of the selected schemes are legal entities to which the company is affiliated in a adaptation is strengthening or clarifying in of multiple stakeholders (local governments, assessed in this report. More broadly, for relationship in which either party controls the actions relation to local laws, this approach can result producers, civil society organisations and or performance of the other.’ See Accountability in a weakening of standards where the national purchasers) and to reduce the costs of certification to be consistent with holistic efforts Framework Initiative, Definitions – Different types of to address the multiple pressures on biodiversity supply chain actors [Website]. standards depart considerably from the global certification by spreading them more widely. and ecosystem health it would need to require 4 Changing Markets Foundation (2018). NGOs have principles and criteria. Compliance will need to be mandatory ecological production,2 including prohibiting repeatedly called out the RSPO for its failures in to ensure all producers in a jurisdiction the use of synthetic pesticides and GMOs. this area; see eg EIA (2015), Greenpeace (2018b) and are committed to and compliant with the Rainforest Action Network (2017, 12 June). standard, and it will require legal reforms and 5 FSC (2011b) the engagement of a range of government 1 MSI Integrity (2020) pp.87-88 6 The FSC’s case tracker includes details on complaints agencies.13 To date there has been no successful 2 See Greenpeace (2015). where the resolution process has extended over several jurisdictional-level certification. years. See FSC, Current cases [Website]. 9 FSC (2015a) 7 RSPO (2017c) pp.6-9 10 RSPO, National interpretations [Website] 12 RSPO (2019, 24 June) 8 See eg Greenpeace (2018a), Greenpeace (2019a) and 11 PEFC, Adapting global standards to local needs MacInnes, A. (2021). [Website] 13 Colchester, M., et al. (2020).

30 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 31 USING CERTIFICATION TO SIGNAL (WTO) rules says that a government cannot COMPLIANCE WITH LEGISLATION IS NOT instruct the use of one specific certification scheme, even if that certificate is objectively A SOLUTION the best one. Thus, governments have to In some cases certification is used to show develop their own criteria, or even go as far as compliance with legal environmental developing elements of a whole certification requirements. For example, the EU RED sets scheme, together with a procedure to assess out sustainability criteria for biofuels produced existing schemes against these government or consumed in the EU, and producers can criteria. After this assessment a formal decision demonstrate compliance with these criteria of acceptance, accreditation or recognition has through certification by a national scheme or a to be taken by the authorities. The assessment voluntary scheme recognised by the European itself must be executed by an independent body, 1 Commission (such as ISCC). However, the which often must be set up specifically for EU Court of Auditors has found the system this purpose and which must be composed of that should ensure the transparency and independent experts. reliability of certification systems used in the context of the EU RED to have several There are multiple risk factors here which point deficiencies (see box ‘The EU Renewable to the likelihood of the resulting solution being Energy Directive (RED)’ on page 58). weaker than existing certification schemes: the government criteria can be limited in scope,2 If certification on its own is unable to guarantee the assessment body can lack the necessary that commodity production is entirely free of independence requirements,3 the assessment deforestation, human rights abuses or other procedure can be incomplete or rely on an harms, there is little to suggest that using insufficient set of information (eg when input certification as a tool for proving compliance from stakeholders is limited or the assessment with legal requirements could solve the issues is merely based on documentation review) and in supply chains and fulfill the legislation’s ultimately political actors can interfere and objectives. In this context, recognising a take decisions based on criteria that are totally particular certification scheme as a proof unrelated to the reliability of a scheme.4 of compliance, despite its shortcomings, removes any incentive to improve the scheme or to replace it with a more reliable alternative, effectively contributing to the 2 See box ‘The EU Renewable Energy Directive (RED)’ on institutionalisation of greenwashing. page 58. 3 Two examples in the Netherlands are TPAC for timber Given that certification schemes are procurement (see https://www.tpac.smk.nl/32/home. voluntary tools, and that compliance with html) and ADBE for biomass subsidies (see https:// their requirements is verified by third-party adviescommissiedbe.nl). In both cases the assessment committees have experts that have clear links to the forest operators that often function on a commercial or timber or biomass sector. Their independence can basis (see ‘Auditing’ below), it is clear that therefore be questioned. they can neither replace regulatory obligations 4 For example, in the Netherlands, in the case of subsidies for operators to comply with legal criteria nor for co-firing biomass for four coal-fired power plants absolve public authorities from the responsibility – the so-called SDE+/SDE++ scheme – the Dutch Minister of Economic Affairs and Climate Policy decided of enforcing those criteria. in Q3 2018 not to follow the advice of the independent assessment committee that is tasked with advising the In addition, using certification to comply with minister because it did not lead to enough certification legislation poses problems of administrative schemes being recognised; he instead made an exception efficiency and effectiveness as it requires an and accepted the FSC and PEFC schemes for an interim additional layer of procedures and assessments period until the end of 2019, even though the PEFC was the weakest of all certificates being assessed. This is on top of the already complicated processes of the 'Exception in 2019' mentioned on the Netherlands certification schemes. The EU RED legislation Enterprise Agency website (see Netherlands Enterprise is a good example: the current mainstream Agency, Sustainability criteria for solid biomass under the SDE+/SDE++ scheme [Website]). While the details © Ulet Ifansasti / Greenpeace interpretation of World Trade Organization of this exception are no longer visible on this page, the category 1 and 2 overview document shows that the 8 January 2015 - Kalimantan, Indonesia. Pulpwood concession PEFC-approved schemes (ATFS and SFI) have the lowest PT AHL, owned by PT Riau Andalan Pulp & Paper (part of APRIL), 1 European Commission, Voluntary schemes [Website] scores of the approved schemes. in Sebuku subdistrict.

32 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 33 The lack of full traceability and transparency producers receive ‘credits’ for each tonne of The segregated model (some companies use the makes it impossible for certification schemes, let certified commodity they produce; however, term ‘100%’) ensures that certified commodity alone downstream companies and consumers, the commodity is then mixed with uncertified is not mixed with uncertified commodity;12 thus, to ensure that destruction or degradation of product, rather than being segregated or tracked if a product or ingredient is labeled as certified, forests and other ecosystems and human rights through the supply chain. Downstream companies the entire content is guaranteed to be certified. abuses are excluded from the production of a that have purchased quantities of uncertified It may, however, come from different certified commodity.3 commodity on the open market can buy sources/farms, including different countries corresponding quantities of credits, enabling them of origin. The strictest form of segregation is Traceability and Technology to enable full traceability and to claim to be supporting certified production. the identity preserved (IP) type model, where transparency exists,4 including e-data analysis The revenue from sold credits is intended to a certified product or ingredient from one tools, so feasibility is not the stumbling transparency encourage and support the transition of producers individual source (farm or group) remains block – the issue rather seems to be one of to adherence to the certification standards.9 segregated – and therefore potentially traceable reluctance on the part of manufacturers, – throughout the supply chain.13 This is also the processors and retailers. This might stem from Under the mixed/mass balance model, certified most difficult and expensive model to implement, their unwillingness to pay extra to ensure full commodity is mixed with uncertified commodity so its use is relatively rare.14 segregation,5 arguing that other models (book throughout the supply chain and this mixed LACK OF TRACEABILITY AND and claim and mixed sourcing – see below) commodity is sold to end users as ‘certified SUMMARY REPORTS OR RESULTS OF TRANSPARENCY CONCEAL PROBLEMS IN also contribute to the growth of ‘sustainable’ mixed commodity’. Accounting systems track the production, or from a fear that traceability quantity of certified commodity passing through AUDIT ASSESSMENTS OFTEN NOT MADE THE SUPPLY CHAIN will make it impossible to conceal harmful or the supply chain to the market, and in theory PUBLIC Most certification schemes require only a destructive practices in commodity production, only this volume is able to be labelled or claimed An important element of transparency and minimal level of traceability and transparency. increasing the pressure on companies to solve as certified. This approach enables the costs of therefore increased accountability and credibility A truly unbroken traceability system enabling these problems. setting up infrastructure for segregated supply of a certification scheme is the publication commodities to be tracked from source to end 10 chains to be avoided. Schemes such as Fairtrade of key documents or information relating to product and vice versa is not implemented for any MIXING CERTIFIED WITH UNCERTIFIED and the Rainforest Alliance argue that this allows the certification assessments. This allows FERCs. Full transparency (public disclosure of the COMMODITIES ALLOWS DEFORESTATION the participation of more smallholder farmers and stakeholders to evaluate the performance of entire supply chain) is similarly lacking. companies that otherwise would not be able to LINKED PRODUCTS TO BE GREEN- certificate holders and supply chain actors With the exception of the RSPO1 and FSC,2 which afford access to the certification scheme. LABELLED against the certification scheme’s standards, do so to a limited extent, none of the major The issue with such sourcing models, of course, and to assess how good a job the auditors and Even some of the better certification schemes schemes publish maps of certified companies is that they allow supply chains to continue to be certification bodies have done. include an option for downstream companies and areas. Further, most schemes do not require filled with commodities and suppliers associated to buy commodities certified under ‘mixed’ There is variation across schemes, ranging the provision of maps or data for publication on with deforestation and other social and ecological systems such as ‘mass balance’, or other from essentially no transparency at all to remaining natural ecosystems or conservation harms. Companies that purchase commodities approaches to support certified production summary reports of audits being made publicly values in certified areas, or publication of details or products made from commodities traded 6 available. Schemes that lack transparency about on social conflicts or grievances. such as ‘book and claim’. through these supply chain models may therefore members’ compliance with their standards and None of the schemes require full transparency Under the book and claim model (aka ‘certificate be inadvertently supporting producers that about any sanctions imposed (eg if a member is concerning either the ultimate ownership of trading’), used for example by the Round continue to engage in deforestation, ecosystem suspended, and why) risk obscuring evidence 7 8 certified companies or the full extent of the Table on Responsible Soy (RTRS) and RSPO, destruction and/or human rights abuses. They of ecosystem destruction and/or human rights corporate groups to which they may belong. are also misleading consumers if they claim that abuses in supply chains.15 This makes it impossible for buyers to avoid the products made with these commodities are certified suppliers that belong to corporate 3 Smit, H., McNally, R., & Gijsenbergh, A. (2015) ‘sustainable’. Even if their certification label producer groups involved in unsustainable 4 See eg Hirbli, T. (2018) and Saberi, S., et al. (2018). says ‘mixed sources’, it still conveys a certain production of commodities through some of 5 Where certified feedstock is kept separate from any message to consumers, who may have trouble 11 their other (uncertified) subsidiaries, associated uncertified feedstock throughout the supply chain. differentiating between different types of labels. Segregation is one of the most expensive supply chain entities and suppliers. models to implement, second only to identity preservation 12 FLOCERT, Glossary: Physical traceability [Website], RSPO, (IP). See eg Mol, A., & Oosterveer, P. (2015) and RSPO RSPO supply chains [Website] (n.d.-a) pp.5-6. 9 SPOTT, GreenPalm: Smallholders [Website]. See also 13 IDH & IUCN NL (2019) p.32, Rainforest Alliance (2018c) p.5, 1 RSPO, GeoRSPO [Website]. See the section on the RSPO in 6 There are slight variations in how schemes refer to the Changing Markets Foundation (2018) p.39. RSPO, RSPO supply chains [Website] Chapter 3 for further details. different certification models. The terms used in this 10 See eg Forum Nachhaltiges Palmöl, Trade options 14 Mol, A., & Oosterveer, P. (2015). See also eg RSPO (n.d.-a) 2 FSC, FSC on the map [Website]; see also Worm, L.D. (2019, report and the descriptions here attempt to represent the [Website]. p.5. 5 September). most common usage. For further details on the different 11 See eg Brécard, D. (2014). and OECD (2016) 15 MSI Integrity (2020) pp.143-145 models see eg Forum Nachhaltiges Palmöl, Trade options [Website]. 7 RTRS, How to buy RTRS-certified material [Website] 8 RSPO, RSPO supply chains [Website]

34 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 35 Sl cain models

1 2 1

NO CERTIFICATION CLAIM NO CERTIFICATION Not Certified CLAIM

Not Certified

3 4 100

100

CERTIFIED & LABELLED CERTIFIED Not Certified % CERTIFIED 100% Not Certified

50%

NO 50% Not Certified CERTIFICATION CLAIM

36 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 37 Auditing

INADEQUATE THIRD-PARTY by different CBs. The problem here is that the AUDITING PROCEDURES audits are done separately, and critical information – particularly concerning certified volumes of Scheduled audit visits present only a snapshot the commodity concerned – is not passed down of conditions at a particular location, at a the supply chain and shared with the CBs that specific time,1 and allow companies to ‘prepare’ are auditing the buyers of these products. This for the audit.2 Pre-announced audit visits creates the opportunity for fraudulent labelling of give producers time to falsify records and uncertified material as certified. (perhaps temporarily) remove unauthorized agency contractors or exploited workers As discussed in the previous section, at present, from facilities.3 Some certification schemes no scheme has implemented a system that go some way towards addressing these comprehensively tracks the movement or concerns by having unannounced audits in transformation of commodities all the way addition to scheduled visits. through the supply chain (the exception is the ‘identity preserved’ supply chain model, but as © Ulet Ifansasti / Greenpeace ONLY PART OF THE SUPPLY CHAIN IS noted, because of the high costs associated with 13 December 2016 - West Kalimantan, Indonesia. Members of the Greenpeace Forest Fire 6 Prevention Team walk during an investigation in a newly cleared peatland area inside PT CHECKED this system its use is not yet widely adopted). The FSC has developed a transaction verification DAS concession in Muara Kayong village, Nanga Tayap Subdistrict, Ketapang. Certification schemes often only specify system, but it is applied only in limited performance standards for the primary producer circumstances in relation to risk.7 This lack of full 4 or processor. Although schemes might have a traceability and volume tracking renders claims familiar with their clients over time, which – Alleged greenwashing of illegal timber from ‘chain of custody’ standard that is intended to made about so-called ‘sustainable’ certified might cause them to overlook issues that they Ukraine for IKEA’ on page 46). 10 provide some assurance about what happens to sources questionable. have become habituated to seeing.8 certified goods before they reach the brand or There is broad acknowledgement of this issue Contractual obligations between CBs and the as a threat to certification integrity,11 but with retailer, these standards may be significantly LIMITED INDEPENDENCE OF less detailed and robust than the standards companies they certify can also be a complicating limited examples of alternative approaches, CERTIFICATION BODIES and oversight processes in place for the initial factor. Global Witness investigations have revealed schemes are reluctant to adopt innovations to supplier. This opens the risk of, for example, It is common practice for certification bodies to that ‘contractual obligations between the FSC’s address this concern. Research suggests that human rights abuses occurring at other points be paid directly by the clients they are auditing, certifying bodies and the companies they certify having a ‘firewall’ between CBs and their clients in the supply chain, such as during processing of who can always choose another CB if they are leave them with little power to take action against improves the strength of environmental standards products like coffee, wood or palm oil.5 dissatisfied with the results of an audit. The subsidiaries’, because the CB is ‘unable to act as auditing. Proposals include rotation of CBs and 9 CBs’ financial dependence on the clients they both certifier and complainant’. In some cases their auditors, having the certification fee held in In the case where there are multiple certificates are certifying creates an intrinsic conflict of such a lack of independence may lead to enabling an escrow account until the assessment report has used in the supply chain, they are often audited interest, potentially encouraging them to give full-blown corruption, as was recently alleged been validated, a tender process after which a third unduly favourable audit results in order to keep by Earthsight in their reports on illegal logging party decides on the CB for a client, flat fee audits in Ukraine (see box ‘FSC implementation failure and free audits funded by levies or other means.12 1 MSI Integrity (2020) p.134 their clients. As well, auditors may become overly 2 MSI Integrity (2020) pp.131-132 3 LeBaron, G., & Lister, J. (2016) p.3 6 Mol, A., & Oosterveer, P. (2015). See also eg RSPO (n.d.-a) 8 Jennings, S. (2016) pp.8-9. See also Duflo, E., et al. 10 Earthsight (2018), Earthsight (2020) 4 See eg GreenPalm, What is GreenPalm? [Website]. p.5. (2012), EIA (2015), EIA (2019) and Hines, A. (2014, 12 September). 11 Mike Read Associates (2020) pp.32-43 5 MSI Integrity (2020) p.102 7 FSC, Transaction verification [Website] 9 Hines, A. (2014, 12 September) 12 Eg Duflo, E., et al. (2012).

38 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 39 Implementation

LITTLE RESEARCH INTO IMPACT – LET REPORTED VIOLATIONS OF ALONE EVIDENCE OF POSITIVE IMPACTS CERTIFICATION STANDARDS While certification schemes claim they have Certification schemes often fall short not only in a positive impact, systematic reviews of the their definition of the standards themselves, as evidence by academics and other researchers discussed above, but – even more importantly typically point to ‘sparse, limited, and often – in how those standards are interpreted, context-specific benefits’ for rights holders implemented and enforced. For example, such as local communities and famers1 and, numerous case studies from across forest regions particularly regarding forestry, mixed and show that RSPO certification has been granted to inconclusive results.2 Schemes themselves often companies that have been reported to be involved communicate front and center the uptake or in deforestation, land disputes, destruction of scale of their operations – such as the number Indigenous livelihoods, agrochemical pollution of forests, plantations or farms that have been and cutting communities off from their certified or countries that they cover – as drinking water supplies.6 3 evidence of their success or ‘impact’. However, The following case studies show how the RTRS, assessments of whether they are achieving ProTerra, FSC and RSPO have all certified their desired impact on people or the planet are companies that have been accused of having links 4 of varying quality, with even Fairtrade, which to environmental destruction and/or human seems committed to impact measurement, rights abuses. apparently having difficulty evaluating the extent to which its model produces positive outcomes ‘[R]esults on environmental and biodiversity for the people the scheme seeks to benefit.5 performance are in many cases limited … or variable…. In some cases, certification schemes 1 MSI Integrity (2020) p.193. See also Oya, C., et al. (2017) and Petrokofsky, G., & Jennings, S. (2018). have spurred more intensive and degrading land- 2 See eg Moog, S., Spicer, A., & Böhm, S. (2014) and use practice … and caused higher deforestation in Morgans, C. L., et al. (2018). neighbouring old-growth forest areas.’ 3 See eg ISCC, Home [Website], Rainforest Alliance, Our - IPBES (2019) p.44 impacts [Website], RSPO, Impact: RSPO in numbers [Website] and RTRS, Impact [Website]. 4 MSI Integrity (2020) pp.196,201-202 6 See eg Greenpeace (2019a) and World Rainforest 5 MSI Integrity (2020) pp.202-203 Movement (2018, 16 November).

© Ulet Ifansasti / Greenpeace 29 June 2013 - Sumatra, Indonesia. A worker watches fires rising in a concession owned by PT Raja Garuda Mas Sejati (a palm oil company belonging to the Asian Agri group, a member of the RSPO).

40 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 41 WEAK PENALTIES FOR COMPANIES And even if a producer’s certification is BREACHING CRITERIA withdrawn and the producer ultimately suspended or expelled from the scheme, this When companies breach certification standards, does not necessarily lead to satisfaction or the consequences are not necessarily swift compensation for communities and individuals or severe. In some cases the auditors appear who may have lost their land, livelihoods, inclined to be lenient; in others, audits (as cultural sites or clean water supply as a result discussed in ‘Auditing’ on page 38) may of the producer’s activities. Most certification fail to pick up issues or take a long time to schemes have a dispute or grievance mechanism do so (for example when parts of a farm or that enables complaints to be made against concession are audited only every few years). certified companies and operations, the CBs Typically, the most extreme sanction for a and the scheme itself. However, often these very serious breach of a certification scheme’s mechanisms and the cases heard under them standards is for a producer’s certification to are not made public. They may not have clear be terminated immediately. The producer’s processes or be easy to use, and complaints may membership in the scheme may also be revoked. not be addressed in a timely and comprehensive For less serious infractions, the certification manner. Moreover, most schemes do not provide may only be suspended. However, in practice for compensation to be paid to people affected certificate holders that have seriously breached by loss of land or livelihood or other human a certification scheme’s standards do not rights violations,2 nor do they have mechanisms normally have their certificates suspended or in place for remediation or restoration of terminated immediately. Rather, they are given damage to natural ecosystems. And if they do time to achieve compliance, on the questionable have provisions of this kind, their scope and basis that engagement with non-compliant effectiveness are often limited. companies is a more effective driver of change than excluding them from the scheme until The following case studies give some examples they are in compliance and have carried out of cases where certification has failed to live remediation. Thus, despite the use of pass/fail up to its promise as an effective means of certification criteria and indicators, the approach cleaning up supply chains. Details on the often aims for ‘continuous improvement’ and implementation and effectiveness of individual ‘inclusiveness’, while ensuring a complete schemes are provided in the following chapter. halt to deforestation, natural ecosystem destruction, human rights abuses or other harms across the certificate holder’s operations remains a distant goal.1

1 See eg MSI Integrity (2020) pp.139-140. 2 MSI Integrity (2020) p.178

© Jiri Rezac / Greenpeace 9 October 2009 - Canada. Boreal forest in Alberta.

42 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 43 7 March 2019 © Chain Reaction Research CASE STUDY Formosa do Rio Preto, Bahia, Brazil. Deforestation at SLC Agrícola's Fazenda Parceiro between 7 March 2019 and 5 May 2019. RTRS & ProTerra implementation failure

Page ref SLC Agrícola, Alleged greenwashing of soya from SLC Agrícola, Brazil, for Lidl

SLC Agrícola, the largest listed soya producer In February 2018, SLC Agrícola announced its in Brazil, operates 16 farms spread across six participation in the Lidl Soybean Initiative. Brazilian states,1 including the region known as This initiative – which is run in collaboration Matopiba (comprising the states of Maranhão, with ProTerra – aims to work with suppliers 5 May 2019. Tocantins, Piauí and Bahia, and currently of sustainable and non-GMO soya, providing a the frontier of deforestation in the Cerrado higher price for certified produce sold to Lidl. ecoregion2). Its main clients include Cargill SLC Agrícola selected Fazenda Parnaíba and Agrícola S.A., Amaggi LD Commodities S.A. and Fazenda Planeste in Maranhão, which already Bunge Alimentos S.A.3 had ProTerra and RTRS certifications, to supply certified sustainable soya to Lidl.9 SLC Agrícola is a member of the RTRS4 and of the soya certification scheme ProTerra.5 It has several According to CRR, soon after this partnership RTRS certified farms, two of which are also was announced Fazenda Parnaíba was split certified by ProTerra.6 into two separate farms: Fazenda Parnaíba and Fazenda Palmeira. The report states that Chain Reaction Research (CRR) reports that Fazenda Palmeira was not part of the ProTerra between 2011 and 2017 SLC Agrícola deforested or RTRS certification programs and was not to be 39,887 ha of land, some 30,000 ha of which were included in the Lidl partnership.10 classified as Cerrado forest.7 The Cerrado is an ecosystem that has been recognised for its high Also in 2018, SLC Agrícola reportedly applied for biodiversity value and whose protection the RTRS environmental licences to clear a total of 16,938 supposedly ‘strongly supports’.8 ha on its Parnaíba, Palmeira, Parceiro, Parnaguá The corporate restructuring of Fazenda Parnaíba circumvent the certification standards through and Palmares farms.11 CRR research found that – which according to CRR appears to have corporate restructuring, allowing it to continue at Fazenda Parnaíba and Fazenda Palmeira, the been intended to circumvent the Lidl Soybean its destructive practices in other areas of its company’s plans were to result in the clearing Initiative’s responsible sourcing policies and operations even as it sold ‘certified sustainable’ of 4,775 ha of native Cerrado vegetation; of certification requirements – enabled SLC Agrícola produce to a major retailer. this, some 4,130 ha conveniently fell within the to enter into the partnership claiming to be borders of the newly formed Fazenda Palmeira, Were the RTRS, ProTerra and other schemes ‘sustainable’, while reportedly simultaneously and the remaining 645 ha of deforestation was to to require group-wide compliance with their continuing to destroy large swathes of native take place on the certified Fazenda Parnaíba.12 certification criteria, consumers choosing to Cerrado vegetation.13 buy certified products could be more sure that 1 SLC Agrícola, About us [Website] If so, this would appear to be a clear example of they were not unwittingly supporting producers 2 Greenpeace (2019c) the RTRS and ProTerra facilitating greenwashing, engaging in the very practices their buying choices 3 SLC Agrícola (2019) p.109 with the reports suggesting that a company were intended to discourage. that had engaged in widespread deforestation 4 RTRS, Members [Website] ProTerra reports that SLC Agrícola was excluded in the past saw market potential in RTRS 5 ProTerra Foundation, The ProTerra network [Website], from the latest cycles of the Lidl initiative, but and ProTerra certification and decided to ProTerra Foundation (2019f) according to the company's website the two farms 9 SLC Agrícola (2018) 6 SLC Agrícola, Our farms [Website]. See also SLC Agrícola in question have retained their certified status.14 (2018). 10 Chain Reaction Research (2018, 29 October) 13 Chain Reaction Research (2017, 18 September), Chain 7 Chain Reaction Research (2017, 18 September) 11 Chain Reaction Research (2018, 29 October) Reaction Research (2018, 29 October), Chain Reaction Research (2019, 9 May), Chain Reaction Research (2020, 17 8 RTRS (2017, 24 October) 12 Chain Reaction Research (2018, 29 October) April) 14 See SLC Agícola, Our farms [Website]

44 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 45 CASE STUDY

FSC implementation failure

Alleged greenwashing of illegal timber from Ukraine for IKEA

In 2014, furniture giant IKEA committed to VGSM. Wood panel producer Egger – another source 100% of its wood from ‘more important supplier to IKEA – reportedly also sustainable sources’ – defined as ‘wood from imported almost $2 million worth of wood FSC forests and recycled wood’ – by August during 2019 from suppliers in Ukraine that 2020.1 The company later extended this deadline have been the repeated subjects of criminal to the end of 2020, and claims to have met it proceedings regarding illegal logging and by reaching 98% compliance.2 illegal timber trading.7 First and foremost, this commitment to The illegalities and corruption risks in IKEA’s responsible sourcing must be weighed against Ukrainian supply chains are not unique. Findings the company’s relentless push for growth. Its show that in all SFE regions state-sanctioned consumption of wood has reportedly doubled illegal logging is a business-as-usual practice, in the past decade, and according to NGO with reports of corruption running from the local Earthsight’s calculations, to sustain its growth to the provincial level, and even to a former head each year it must consume 1.8–2.5 million more of state. Earthsight reports that while President trees than it did the year before.3 Viktor Yanukovych was in power in Ukraine from 2011 to 2014 overseas companies paid millions Moreover, a recent investigation by Earthsight of dollars in bribes into the offshore accounts of raises concerns that relying on FSC certification his friends in the forest agency in order to access ©Earthsight doesn’t appear to provide strong guarantees of timber, and that wood for which such bribes had Logs from Carpathians. sustainability or even legality. The investigation been paid is highly likely to subsequently have reports that IKEA is selling tens of thousands made its way into IKEA products.8 of chairs in countries such as the UK, US and Part of the problem is that the FSC has a investigating reported illicit acts and working Germany made from wood that was illegally FSC audits of these problematic suppliers fundamentally flawed audit system due to the with other stakeholders ‘to address the root of 12 felled by the Velyky Bychkiv state forestry reportedly failed to detect any problems. As the financial link between the company seeking the problems threatening the Ukrainian forests.’ certification and the CB auditing the company enterprise (SFE) in the Ukrainian Carpathians,4 Earthsight investigation reveals, there are many Truly addressing those problems, however – and against the FSC standards10 (a problem discussed home to endangered lynx and bear populations.5 reported cases of FSC certified companies or not just in Ukraine – will require the FSC to shift in ‘Auditing’ on page 38). The report alleges that the SFE illegally licensed their subsidiaries engaging in illegal logging, its focus away from certifying as much forest as ‘sanitary’ felling on more than a hundred sites degradation of IFLs and human rights abuses, The Earthsight investigation reports that the FSC possible.13 To address concerns of greenwashing, in April–June 2018, 2019 and 2020.6 According with the FSC failing to take action unless has even lobbied the Ukrainian government to it must instead concentrate on rigorous to Earthsight, illegal logging was carried out NGOs step in. The report argues that instead of roll back some of the environmental regulations enforcement of its standards and strengthening by local furniture and timber company VGSM following a precautionary approach, the FSC that were found to be being systematically what it can do to protect forests and fight the – one of the largest Ukranian suppliers to IKEA repeatedly gives companies that show indications flouted in certified forests.11 global climate emergency and biodiversity crisis. – and Ukrainian state-owned firms that sold to of engaging in illegal practices the benefit of the The FSC responded to Earthsight’s allegations doubt, even in highly corrupt countries, and sets 9 in vague terms, claiming to be supporting 1 IKEA (2014) pp.13,18 the bar for disassociation onerously high. government action against fraudulent activities, 2 See IKEA, Being forest positive [Website] 3 Earthsight (2020) p.13 12 FSC (2020, 24 June) 10 Hines, A. (2014, 12 September); see also Jennings, S. 4 Earthsight (2020) 7 Earthsight (2020) p.5 13 The FSC has proposed as an indicator of supporting (2016) sustainable forest management objectives ‘Percentage 5 Schlingemann, L., et al. (2017) 8 Earthsight (2020) pp.24-25 11 Earthsight (2020) p.33; see also FSC (2018, 27 of forests certified under inclusive, effective certification 6 Earthsight (2020) pp.4-5 9 Earthsight (2020) p.40 November) schemes.’ See FSC (2015b).

46 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 47 CASE STUDY

RSPO implementation failure

Greenwashing Indonesian palm oil from Bumitama for consumer brands such as Mondelēz, Nestlé and Unilever

The Bumitama group is a joint venture between Bumitama appears to have sought to resolve the Harita Group, controlled by members its legal and certification risks through an of the Lim Hariyanto family, and Malaysian elaborate transfer-of-ownership scheme conglomerate IOI Group. The Bumitama group’s intended to conceal the Lim Hariyanto family’s main palm oil holding company, Bumitama Agri and Bumitama’s responsibility for the unlawful Limited (hereafter referred to as Bumitama), development of concessions. By this means, joined the RSPO in 2013.1 A 2018 Greenpeace the group was able to claim that it was not investigation revealed that numerous leading connected to the concessions during their consumer brands, including big names like period of development without appropriate Mondelēz, Nestlé and Unilever, had supply chain permits or in breach of RSPO rules. In at least links to Bumitama.2 one case, Bumitama continued to manage illegal plantations while neither it nor the Lim Prior to becoming an RSPO member, figures Hariyanto family had legal control of them; it given in the company’s prospectus (from when also appears to have been responsible for new Bumitama launched its initial public offering clearance within the concession concerned in © Kemal Jufri / Greenpeace on the Singapore Exchange in 2012) imply that 2015 and 2016,5 before officially purchasing the 13 November 2013 - Indonesia. Cleared peatland forests in an oil palm concession owned over 70,000 ha of land for which Bumitama by PT Andalan Sukses Makmur, a subsidiary of Bumitama Agri Ltd. concession in December 2016.6 lacked title had already undergone unlawful development. Moreover, investigations into The temporary nominal divestment by the Lim three areas to which Bumitami was connected Hariyanto family or Bumitama of concessions influence the company may be able to bring In October 2017, Greenpeace, Sawit Watch and showed that between 2005 and 2018 some 11,100 where development was undertaken without to bear on investigations into and complaints the Environmental Investigation Agency (EIA) ha of forest were cleared – nearly 2,300 ha of this HCV assessments calls into question whether the about its own operations. requested that the RSPO Secretariat reopen a from 2014 onward – apparently without credible compensation proposals the company submitted complaint against Bumitama directly linked to HCV assessments having been undertaken to the RSPO accurately reflect its true liability Bumitama’s record is profoundly incompatible this transfer-of-ownership scheme. The initial and acted upon.3 The RSPO’s Remediation under the terms of the RaCP. Such proposals with the RSPO’s Principles and Criteria. Given letter and subsequent information provided to and Compensation Procedure (RaCP) requires are not available to stakeholders for review, so that there is strong evidence suggesting that the RSPO by Greenpeace laid out comprehensive members to disclose land development that took there are insufficient means for stakeholders to the identified clearance was directly instigated, evidence of the group’s modus operandi and place without an HCV assessment. Members independently assess whether the disclosures encouraged or supported by Bumitama or the the individuals involved. As of November 2020, are also required to calculate environmental on which they are based are full and accurate. In Lim Hariyanto family, despite ownership having the RSPO claimed to still be working on a draft liabilities, carry out appropriate remediation this case, the limitations of the RSPO’s reliance passed nominally and temporarily out of their chronology ‘to provide clarity of this complaint’.10 and propose and provide compensation. Under on members’ self-policing are potentially hands at the time of the clearing and before RSPO rules, clearance after May 2014 is banned compounded by the fact that Bumitama has a the concessions definitively entered Bumitama’s altogether and cannot be compensated, although representative on the RSPO Complaints Panel, portfolio,8 there appear to be compelling grounds a loophole permits RSPO members to acquire which adjudicates on complaints against for Bumitama’s expulsion from the RSPO.9 newly cleared concessions from non-members.4 members7 – a factor that, in spite of conflict of interest procedures, raises questions about what

1 RSPO, Members: Bumitama Agri Ltd [Website] 8 Greenpeace (2018a) 2 Greenpeace (2018b) pp.iii,38-39 5 Greenpeace (2018a) pp.5,30 9 The RaCP’s guiding principles state that ‘Non-compliant land clearance … after 9 May 2014 by RSPO members may 3 Greenpeace (2018a) pp.4-7 6 Bumitama Agri Ltd. (2016, 20 December) result in expulsion.’ See RSPO, RSPO Remediation and 10 RSPO, Complaint: PT Hati Prima Agro (a subsidiary of 4 RSPO, RSPO Remediation and Compensation Procedure 7 Lim Sian Choo. See RSPO, Complaints Panel [Website], and Compensation Procedure [Website]. BUMITAMA AGRI LTD) [Website] [Website] RSPO, RT17 programme [Website].

48 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 49 CASE STUDY

FSC implementation failure

Korindo holds FSC certification despite destruction of Papuan rainforest

Korindo – an Indonesian–Korean plantation and Korindo’s response has centred on the threat energy conglomerate whose customers include of legal action to silence civil society and multinationals like Siemens Gamesa Renewable news outlets that continue to investigate its Energy – owns the largest palm oil plantation activities.8 The FSC, which conducted three holdings in Papua. A recent analysis using data separate investigations into Korindo’s legacy of from the CIFOR Papua Atlas1 showed that Korindo deforestation and human rights, published only had destroyed 57,000 ha of rainforest in the heavily redacted versions of its reports on these province since 20012 – an area almost the size cases after facing legal threats by Korindo.9 of Seoul, the capital of South Korea. The group A recent investigation by Greenpeace and still holds an FSC certification for its timber Forensic Architecture has also presented evidence operations, despite having been found by the FSC3 indicating that Korindo intentionally used fire to violate the scheme’s Policy for Association4 due as part of the process of clearing vast areas of to extensive forest clearance. forest in remote areas of the Indonesian province The FSC’s own investigation found that Korindo of Papua,10 although the FSC claimed it was not had destroyed more than 30,000 ha of rainforest possible to prove that the fires were set with the between 2014 and 2019, and in doing so had intention to clear land and declined to follow violated a number of FSC standards, including up on this aspect of the allegations against the by failing to protect substantial areas of HCV company.11 Plantation development is a root cause forests in its concessions.5 The FSC panel of Indonesia’s forest and peatland fires, which also concluded that violations of Indigenous reportedly led to the destruction of some 4.4 Peoples’ traditional and human rights had million ha of land between 2015 and 2019.12 taken place.6 Yet, in a demonstration of weak governance, the FSC International Board failed to cut ties with Korindo, as required by its own Policy for Association.7

1 https://atlas.cifor.org/papua/#en 2 Greenpeace Southeast Asia (2020, 12 November) 3 FSC (2019, 3 August) 4 FSC (2011b) 5 For details on the case, see FSC, Korindo Group [Website]. 6 For details on the case, see FSC, Korindo Group [Website]. See also Forensic Architecture & Greenpeace (2020) and Jong, H. N. (2019, 11 November). 8 Greenpeace Southeast Asia (2020, 12 November), Mighty Earth (2021, 19 January) 7 The FSC denies that its decision not to disassociate was based on the threat of legal action by Korindo and 9 FSC, Korindo Group [Website], Jong, H. N. (2019, 11 © Ulet Ifansasti / Greenpeace claims that it hopes instead to work with the company November) 1 April 2018 - Indonesia. Logging operations in PT Inocin to ‘[achieve] demonstrable progress on important 10 Forensic Architecture & Greenpeace (2020) environmental improvements and social remedy in the Abadi logging concession (HPH), part of the Korindo group. 11 FSC (2020, 12 November) p.2 areas in which Korindo operates’. See FSC (2020, 12 November) p.12. See also FSC (2011b) p.6. 12 Greenpeace Southeast Asia (2020)

50 Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility Greenpeace International - Destruction: Certified 51 INTRODUCTION

Chapter 3: Analysis of the major certification schemes

CHAPTER 3:

This chapter analyses the Chapter 3: Analysis of the major certification schemes performance of major certification schemes, focusing on five key areas: governance and decision ANALYSIS OF making, standards, traceability and transparency, audits, and implementation and effectiveness. Because there are too many schemes in use for this report to THE MAJOR be able to consider all of them in detail, the schemes discussed are those that are most widely used and/or that are claimed by governments and corporations to CERTIFICATION exemplify best practice, namely: ISCC, Fairtrade, Rainforest Alliance & UTZ (in the process of merging), RSPO, ISPO/MSPO, RTRS, ProTerra and FSC. The chapter is SCHEMES structured by commodity: biofuels, cocoa and coffee, palm oil, soya and wood products.

© Jean-Simon Bégin 8 December 2015 - Canada. Woodland caribou, a type of reindeer, 52 are considered a threatened species due to habitat loss and the 53 impacts of roads, logging, mining, and other industrial disturbances. Biofuels certification schemes

Biofuels certification schemes

International Sustainability • Principle 1 requires conformity with the • The ISCC standard includes no requirement sustainability criteria of the EU RED and for participatory mapping13 but does require and Carbon Certification (ISCC) FQD.7 ISCC has concluded that, for EU a participatory social impact assessment and producers, the requirements of Principles FPIC for any newly acquired lands.14 It largely 2–6 – which represent ‘best practices’ relies on compliance with international ISCC’s membership and governance are dominated by industry. Its standards mostly refer with regard to agriculture and forestry, conventions and relevant national and local to national and regional legislation and international conventions – notably the EU RED, working and social conditions, compliance laws to safeguard Indigenous rights.15 Fuel Quality Directive (FQD) and Common Agricultural Policy (CAP) – and therefore are only with national and regional laws and good as strong as the standards of the legislation or international conventions to which they are Traceability and transparency management practices8 – are met through required to adhere. The scheme relies heavily on self-reporting (sustainability declarations equivalence with cross-compliance of the • ISCC requires every element of the supply and self-declarations for group members) rather than field verification, although it has supply CAP, and thus these producers are only chain for ‘sustainable’ materials to provide chain traceability requirements. However, there is no publicly accessible online database audited with respect to the requirements evidence of compliance with the EU RED reporting on sustainable material produced, so independent validation of this information 16 of Principle 1.9 Cross-compliance, although and FQD. It offers two chain of custody is not possible. The auditing process lacks transparency, and because companies choose and 17 it promotes environmentally friendly options, segregated and mass balance. Both contract directly with CBs themselves, the independence of the CBs cannot be guaranteed. ISCC land management outcomes, is seen to depend upon a ‘sustainability declaration’ does have an online complaints procedure, but it is unclear what action is taken on complaints. be relatively weak from the standpoint of procedure, whereby each actor in the supply Due to weaknesses in governance, standards, transparency, auditing and implementation, sustainability.10 While protection of land with chain completes and provides a declaration this appears as a ‘tick in the box’ scheme that helps to greenwash commodities for biofuels. high carbon stock is included, protection regarding the origin and sustainability of Worse, crop-based bioenergy is not a solution to energy needs in the first place – in particular, of High Carbon Stock forests is not, raising the material being supplied. The recipient growing demand for certain food crops for bioenergy, encouraged by the legitimacy conferred the question as to whether deforestation is is responsible for verifying that the supplier by certification, puts increasing pressure on land and our climate. Any certification scheme adequately addressed.11 This also suggests had a valid ISCC certificate at the time of applied to crop-based bioenergy is thus effectively a greenwash. 18 that Principles 2–6 in themselves are not dispatch. This approach is clearly prone to particularly strong or ambitious. Indeed, the abuse by unscrupulous actors – the scheme includes a ‘plausibility check’ that compares Governance and decision making • The Board, which manages the affairs ISCC standard allows any company operating material output from a farm or plantation of the association, currently consists in a country that has ratified the fundamental • ISCC is governed by an association with with its area and yields,19 but given the only of industry representatives and two core International Labour Organization (ILO) more than 150 members, which it proclaims variation in actual yields at the farm/ 4 conventions to be considered in compliance to include research institutes and NGOs.1 researchers. NGOs are not represented. with Principle 4 relating to human, labour plantation level as well as the predominant However, over 90% of its members are Board minutes and General Assembly • and land rights ‘as long as the auditor, ‘mass balance’ supply chain model used producers, processors, traders or others active agendas and decisions do not appear to be based on a risk assessment does not come this seems an insufficient safeguard to in the biomass supply chain, with just four available publicly on the ISCC website. to a different conclusion’.12 prevent unsustainable or illegally produced member organisations being NGOs.2 • ISCC is not currently a member of the ISEAL material being passed off as ‘sustainable’. • The General Assembly is ISCC’s highest Alliancer5 (see ‘Failure of schemes to adhere While claiming to provide full traceability decision-making body; all members to best practice standards’ on page 28). throughout the supply chain, ISCC participate.3 With such a high proportion of acknowledges that ‘some transactions may Standards members being private companies from the not be represented or hidden’.20 biomass industry, ISCC is to all intents and • The ISCC sustainability standard includes purposes controlled by the industry. six principles and a range of generic criteria 13 ISCC (2020b), McInnes, A. (2017) p.6 suitable for its multi-commodity (eg palm 14 ISCC (2020b) pp.37,43 oil, soya, maize), global scope.6 7 ISCC (2020b) p.10 15 McInnes, A. (2017) p.6 8 ISCC (2020b) pp.7-8 16 ISCC (2018) p.7 1 ISCC, Governance & transparency [Website], and ISCC, 9 ISCC (2020b) pp.8-9 17 See ISCC (2018) pp.31-32. ISCC members [Website] 4 ISCC, ISCC Association [Website] 10 See eg ECA (2008). 18 See ISCC (2018) pp.9,13-17. 2 ISCC, ISCC members [Website] 5 ISEAL Alliance, ISEAL community members [Website] 11 ISCC (2020b) pp.16-17 19 ISCC (2018) p.19 3 ISCC (2011) pp.4-5 6 ISCC (2020b) 12 ISCC (2020b) p.9 20 Feige, A. (2020)

54 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 55 • There is no accessible online database Audits • Farms and plantations are audited and • As ISCC itself points out, sustainability reporting on sustainable material produced, • ISCC audits are conducted by auditors certified either as single sites or as part of certification is currently required for only so independent validation of this information on behalf of CBs that have signed a a producer group. For group certification, a small percentage of biomass produced is not possible. cooperation agreement with ISCC. However, ISCC uses a system of self-declaration in worldwide (notably biofuels for the EU • ISCC requires mapping of plantation like most schemes, the independence of which individual growers report on their own market), and voluntarily certified products areas (but not the associated conservation the audit process and thus the credibility compliance with sustainability criteria. Only only cover a small portion of unregulated areas) for independent smallholder of the certification is compromised by the the head office responsible for the group and a markets. So even if, as the scheme claims, 11 certification,1 but this generally requires fact that companies seeking certification sample of group members are audited. certification has a positive impact in the areas that are certified, it has limited influence external technical support. can themselves choose any CB that has Implementation and effectiveness ISCC recognition and then contract on unsustainable practices in non-certified • ISCC has an online complaints submission • ISCC is predominantly a European certification areas, which represent the majority of current 2 directly with their chosen CB to provide procedure, and an online system for filing system, with more than two-thirds of its 15 them with audit services.5 production. Increased bioenergy demand complaints, but it remains unclear where the certificates issued in Europe in 2018. The next increases the demand for feedstocks such Audits are performed at different points in complaints are registered or how to find out • most predominant region was Asia (20%), as palm oil and soya, pushing up prices and the supply chain and verify documentation, any information about their status. with roughly half of the certificates in this providing an incentive to increase production including ‘sustainability declarations’.6 region being issued in Indonesia and Malaysia, • ISCC set up a working group at its of these and/or replacement commodities The ‘sustainability’ of the material actually presumably dominated by the palm oil sector.12 2016 General Assembly to improve its (as other markets, such as animal feed, shift being delivered through the supply transparency by making publication An internal review of the impact of the to cheaper feedstocks). Land previously chain is determined on the basis of the • of summary audit reports mandatory.3 scheme highlighted that the majority of non- used for growing other crops is taken over audit of the grower.7 Summary reports are available on the ISCC conformities detected by audits were related for biofuel feedstock production, displacing website but have insufficient detail to • Desk-based risk assessments are conducted to mass balance and traceability, followed by the original crops (or their replacements) determine if critical ‘sustainability’ criteria prior to each audit to identify potential issues with documentation and record keeping onto newly cleared land. The aim of the have been met. As ISCC audits are not issues. Where high risks are identified, and GHG emissions calculations.13 bioenergy industry is to reduce GHG emissions pre-announced to the general public, there a more extensive audit is conducted.9 by replacing fossil fuels, but increasing • An independent review focusing on the palm appears to be no information available on However, there is a lack of transparency demand for feedstocks ultimately drives oil sector furthermore showed that ISCC had companies that were audited but failed to regarding the risks that are identified and the land conversion for other crops, generating significant weaknesses, ranging from its achieve certification.4 Further details on active measures put in place to mitigate risk. GHG emissions and so fundamentally domination by the private sector and related the transparency of the audit process are undermining that goal.16 Any certification • Certified companies that are determined to organisations to its lack of transparency, and provided in the following section. scheme applied to crop-based bioenergy is be at high risk of non-compliance can be weaknesses in monitoring and evaluation.14 thus effectively a greenwash. subject to further (potentially unannounced) surveillance audits,10 but the results of these are not published.

5 ISCC (2020a) p.21; see also Jennings, S. (2016) 11 ISCC (2016) pp.12-14 1 ISCC (2019b) 6 ISCC (2018) pp.12-13 12 Analysis of data from ISCC (2019a) p.35. 15 ISCC (2019a) p.11 2 ISCC, Procedure for reporting complaints [Website] 7 ISCC (2016) p.22 13 Wüstenhöfer, S. (2019) pp.8-9 16 Gao, Y., et al. (2011), Lapola, D. M., et al. (2010), Popp, J., 3 ISCC, Governance & transparency [Website] 9 ISCC (2016) pp.6-8 14 McInnes, A. (2017) et al. (2014) 4 See ISCC, All certificates [Website]. 10 ISCC (2016) p.6

56 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 57 THE EU RENEWABLE ENERGY DIRECTIVE (RED)

The EU’s Renewable Energy Directive1 sets working conditions, were not covered by the sustainability criteria for biofuels and other assessment.7 Another was that the assessment forms of bioenergy that can be counted procedure was purely based on a documentary towards the EU’s targets for renewable energy. review of the certification procedures with no Compliance with the sustainability criteria follow-up supervision, which according to can be demonstrated through one of the 14 the ECA means that ‘the Commission cannot voluntary certification schemes – including obtain assurance that voluntary schemes ISCC – that are recognised by the European actually apply the certification standards Commission.2 These schemes are responsible presented for recognition. Furthermore, the for certifying the sustainability of most review points to the fact that ‘the Commission biofuels placed on the EU market. has no means to detect alleged infringements of voluntary schemes’ rules as there is no The recognition decisions are based on an specific complaint system in place and assessment of the schemes’ certification does not verify whether complaints directly procedures and are valid for five years.3 The addressed to voluntary schemes are correctly assessments are carried out by an external dealt with by them’.8 The ECA also listed contractor, based on a predetermined numerous other faults in the schemes, leading framework that assesses compliance with the them to conclude that ‘the EU certification RED’s sustainability criteria.4 system for the sustainability of biofuels is In 2016, after the EU RED had been in place not fully reliable’.9 for several years, the European Court of In addition to these concerns about whether Auditors (ECA) conducted a review of the the recognised schemes are able to ensure Commission’s assessment process for the that the certified biofuels are sustainable, the voluntary certification schemes.5 Although inherent shortcomings of the sustainability the ECA concluded that the assessments of the criteria have been debated since the RED schemes adequately covered the mandatory was first published in 2008. The increased criteria established by the RED,6 the review demand for crops like palm oil for biofuels highlighted several concerns about the © Victor Moriyama / Greenpeace drives expansion of agricultural land, often assessment process. A key finding was that 25 March 2019 - Cerrado, Brazil. Silo in the “Ring of Soy”. into forests and peatlands, leading to a several important aspects necessary to ensure phenomenon known as indirect land-use the sustainability of biofuels, such as a scheme change (ILUC).10 A common problem with verifying the absence of land tenure conflicts, certification schemes, the negative impacts RED11 and tackle the problem in a different In conclusion, the RED criteria have never forced labour and child labour and poor of growing demand were beyond what any way: by limiting the volume of biofuels made been fit to tackle the negative impacts of the sustainability criteria could address. The from crops needing agricultural land that growing demand for crops and land driven by 1 Directive (EU) 2018/2001, available at https:// outcry of the scientific community and could be counted towards the EU targets. the policy, and the implementation of these eur-lex.europa.eu/legal-content/EN/ TXT/?uri=CELEX%3A32018L2001 civil society over the GHG emissions and While harmful biofuels still prevail, the latest criteria has been poor. These weaknesses add 12 2 For a list of the schemes see European Commission, deforestation caused by the EU’s growing use revision of the RED commits the EU to, for to the inherent weaknesses of certification Voluntary schemes [Website] of biofuels finally forced the EU to revise the example, phasing out the use of palm oil as schemes that are discussed in this report. 3 ECA (2016) p.8 biodiesel by 2030. 4 ECA (2016) p.20

5 ECA (2016). Note that the report does not name the 7 ECA (2016) p.14 individual schemes assessed, citing confidentiality 8 ECA (2016) p.9 based on respect for the private lives of the persons 11 Directive (EU) 2015/1513 and entities concerned (see p.43). 9 ECA (2016) p.35 12 Directive (EU) 2018/2001 6 ECA (2016) p.48 10 Fargione, J., et al. (2008), Searchinger, T., et al. (2008)

58 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 59 Cocoa and coffee certification schemes

although the standard requires members Traceability and transparency to ‘take measures to protect and enhance Cocoa and coffee certification schemes • The Fairtrade standard for small-scale biodiversity’, it leaves those measures up producer organisations allows a mass balance 9 to the members’ discretion. approach for cocoa, cane sugar, tea and juice.17 Fairtrade • Producers who grow a mix of Fairtrade The standard for traders similarly waives the certified and uncertified crops are permitted requirement for physical segregation and Power sharing at Fairtrade is relatively well balanced. Fairtrade also seems to be one of the to use pesticides that appear in Fairtrade’s traceability to producers in the case of these 10 better fair trade schemes in operation, currently being the only certification system that Hazardous Materials List on the uncertified commodities, for which single-site or group- 18 guarantees a minimum price safety net for farmers, plus an extra sum for them to invest crops. Even pesticides on the Red List (those level mass balance accounting is permitted. in business or community projects. However, concern remains about the scheme’s actual banned outright from use on Fairtrade crops, According to Fairtrade, all their coffee is effectiveness, with a literature review1 showing mixed results regarding livelihood impacts as opposed to being permitted only under fully traceable and physically segregated and pointing to the need for improvement with respect to labour standards on small farms specified conditions or ‘under extreme from non-Fairtrade products at all stages 11 19 and reducing child labour. FPIC is not explicitly mentioned in the Fairtrade standard. Audit caution’ ) are included in this permission, of the supply chain. reports and a register of complaints are not made public, limiting transparency. For cocoa as long as they are not used on fields where In the case of single-ingredient products 12 • and a limited number of other products mass balance sourcing is allowed, meaning buyers Fairtrade crops are grown. sourced using mass balance, Fairtrade could end up with Fairtrade certified products in their hands whose production nonetheless • The standard for small-scale producer requires that – although Fairtrade and non- involved ecosystem conversion or human rights abuses. GMOs are prohibited. Furthermore, organisations prohibits the use of GMOs Fairtrade material may be mixed at some the Fairtrade standard’s requirements regarding deforestation and other ecosystem destruction on Fairtrade crops or other crops grown point in the supply chain – the amount of the are not very clearly defined, making implementation difficult and limiting its effectiveness in in the same fields.13 commodity a company sells as Fairtrade must preventing ecosystem conversion. match the amount purchased.20 • The standard prohibits discrimination, child 14 The black Fairtrade mark requires all 1 Bray, J. G., & Neilson, J. (2017) labour and forced labour, but makes no • specific mention of FPIC.15 Indigenous rights ingredients of a product that are available are mentioned only in the context of the under Fairtrade conditions to be Fairtrade Governance and decision making Standards need for conflict resolution regarding land (eg, in the case of chocolate, not only cocoa • Decision-making power at Fairtrade • The recently revised (2019) Fairtrade standard and water rights, in keeping with the ILO but also sugar and – where used – vanilla). is shared between producer networks for small-scale producer organisations has Indigenous and Tribal Peoples Convention.16 If only a single ingredient is sourced as and national Fairtrade organisations – added new requirements on ‘Protection Fairtrade, this is to be indicated by a white ‘responsible for licensing, marketing, of forests and vegetation’, ‘Prevention of Fairtrade sourced ingredient mark.21 business development and raising awareness deforestation’, and ‘Enhancing biodiversity’, Small-scale producer organisations are not in a defined geographic area’2 – which which if fully implemented are collectively • required to make available maps of their have equal representation at the General strong.6 However, how effective they will be The ‘Prevention of deforestation’ requirement (3.2.32, operations, but they must keep records of the Assembly and on the Board.3 Power is questionable given that this change has which for organisations already certified comes into locations and sizes of their members’ farms.22 sharing at Fairtrade currently seems well come very late, after much deforestation due effect from April 2021) relies on FAO definitions, eg for deforestation (‘The conversion of forest to other land Complaints and allegations of non- balanced, especially when compared to other to cocoa and coffee expansion, as well as the use or the permanent reduction of the tree canopy cover • certification schemes.4 focus on protected areas and ambiguously below the minimum 10 percent threshold’); see Fairtrade compliance can be made either to Fairtrade defined ‘carbon storage ecosystems’7 and International (2019a) p.29. or to its CB, FLOCERT.23 It is possible to • Fairtrade is a Code Compliant member of reliance on the UN Food and Agriculture 9 Fairtrade International (2019a) p.30 view a list of members that have had their the ISEAL Alliance.5 Organization (FAO) definitions of forest 10 Fairtrade International (2019a) pp.57-71 11 Fairtrade International (2019a) p.57 and deforestation, which are widely 17 Fairtrade International (2019a) p.15 8 12 Fairtrade International (2019a) pp.24-25 considered problematic. Additionally, 18 Fairtrade International (2019b) pp.19-21 13 Fairtrade International (2019a) pp.32-33 19 Fairtrade International, Traceability in Fairtrade supply 6 Fairtrade International (2019a) pp.29-30 14 Fairtrade International (2019a) pp.34-39 chains [Website], and Fairtrade International (2019b) p.18 7 The ‘Protection of forests and vegetation’ requirement 15 Fairtrade noted in its reply to Greenpeace that ‘FPIC 20 Fairtrade International, The Fairtrade marks [Website] is enshrined at the organizational level. Fairtrade 2 FLOCERT, Glossary: National Fairtrade Organization (3.2.31, with immediate effect) requires that ‘Your 21 Fairtrade International, The Fairtrade marks [Website]. producer networks are co-owners of Fairtrade, and have (NFO) [Website] members do not cause deforestation and do not destroy UTZ labels refer only to the coffee, cocoa, tea or hazelnuts vegetation in carbon storage ecosystems or protected to both fulfill transparency/democracy/human rights 3 Fairtrade International, Our general assembly and board in a product; see UTZ, The UTZ logos [Website]. areas’ – wording which leaves it unclear whether requirements in their own organizations, and are entitled [Website] deforestation is prohibited outright or merely in the areas to expect these values while working with other Fairtrade 22 Fairtrade International (2019a) p.50 entities.’ 4 Bennett, E. A. (2015) mentioned. See Fairtrade International (2019a) p.29. 23 Fairtrade International (2010a), FLOCERT, Quality and 5 ISEAL Alliance, ISEAL community members [Website] 8 See eg World Rainforest Movement (2016, 21 September). 16 Fairtrade International (2019a) p.12 appeals [Website]

60 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 61 certifications suspended,1 but neither earning top marks in 31 of 45 categories.11 Fairtrade nor FLOCERT makes public details However, concern remains about the overall Rainforest Alliance/UTZ of complaints against or sanctions imposed effectiveness of these schemes. A 2016 upon producers or traders, arguing that literature review of the impact of coffee Subsequent to its January 2018 merger with UTZ, the Rainforest Alliance published a new details of specific cases are confidential as certification programs (including Fairtrade) Sustainable Agriculture Standard in June 2020.1 While including several new requirements, protected by law in most cases. FLOCERT’s on smallholder livelihoods found that there the new combined standards largely follow the Rainforest Alliance’s previous standards, 2 grievance mechanism is public and includes was no consensus about beneficial livelihood which are stronger than UTZ’s. Audits to this standard will become mandatory in mid-2021.2 multiple channels, including WhatsApp and impacts. While some studies identified Until then the two separate schemes will continue in operation, so comments on the UTZ various language options. FLOCERT also benefits in particular contexts and settings, scheme and standards are included below. publishes complaints statistics annually, but causation to the certification was difficult Governance of the Rainforest Alliance and UTZ schemes is less balanced than at Fairtrade, does not make a register of complaints public.3 to show. A greater number of studies found with the Standards Committee that oversees them being somewhat industry-heavy. There’s either neutral or mixed impacts, and a small • Audit reports do not appear to be made public. room for improvement with regard to transparency: the Rainforest Alliance publishes number reported negative impacts.12 Fairtrade detailed audit summaries on its website, but UTZ does not appear to make audit reports Audits has developed a strategy to work towards public at this time and neither scheme makes available details of grievances. Traceability is Fairtrade has only one accepted CB for a living income and identifies this as a key • also a concern – physical traceability is not required and mass balance is a permitted and producers, wholly owned and independently issue.13 However, a recent study found that widely used option, meaning uncertified commodities could end up in products carrying the governed subsidiary FLOCERT.4 FLOCERT there is still significant work to do in this Rainforest Alliance or UTZ seal. The Rainforest Alliance’s Sustainable Agriculture Standard3 is also responsible for the certification of area,14 and Fairtrade’s own research into entirely prohibits the use of GMOs as well as deforestation and destruction of other natural most traders.5 coffee farmers’ household incomes has ecosystems, but concerns have been raised about certified operations; in 2019 the Rainforest found variations between regions.15 • Both announced and unannounced audits Alliance admitted identifying severe non-compliances among certificate holders in West (including of subcontracted premises) • According to the 2018 Cocoa Barometer, Africa with respect to traceability, deforestation and farming in protected areas. This led to may be conducted.6 Fairtrade and the other major schemes have the decertification of some of the certificate holders,4 and warnings to or the suspension of been unable ‘to significantly contribute to 5 Implementation and effectiveness several of the implicated CBs, which were mostly approved by UTZ. In addition, although ensuring [cocoa] farmers achieving [sic] the standards contain relatively strong provisions with regard to FPIC and community Fairtrade works with local and regional • a living income, reducing child labour, or and Indigenous rights, an independent review of the effectiveness of the schemes showed cooperative producers and supports 16 halting environmental degradation’. A that both UTZ and the Rainforest Alliance have been unable to significantly contribute to small-scale farming.7 It is currently the 2017 Overseas Development Institute ensuring [cocoa] farmers achieve a living income or reducing child labour.6 Unfortunately, only certification system that guarantees report commissioned by Fairtrade did find implementation is a clear weakness, allowing certification of highly problematic cocoa in a minimum price safety net for farmers,8 that Fairtrade certification has financial recent years. plus an extra sum for them to invest in benefits for small producers, but noted that it 9 business or community projects. Fairtrade has ‘tended to underestimate and neglect the 1 Rainforest Alliance (2020d) 10 also offers a higher price for organic. issue of labour standards on small farms and 2 Rainforest Alliance (2020, 1 July) 17 In a recent comparison of fair trade and has not had significant impacts in this area’. 3 Both the 2017 and 2020 versions. ethical labels Fairtrade came out on top, 4 Rainforest Alliance (2019, 29 April) 5 Mufson, S. (2019, 29 October) 6 ABVV-FGTB/Horval et al. (2018) p.3

1 Fairtrade International, Faitrade finder [Website] 2 FLOCERT, Quality and appeals [Website] Governance and decision making groups (producers, industry, certification 3 See eg FLOCERT (2021). • The Rainforest Alliance Standards bodies and NGOs). They are appointed 4 FLOCERT, Roots and role in Fairtrade [Website] Committee (overseeing both schemes) is by the Rainforest Alliance Board of 5 Fairtrade International, How Fairtrade certification works Directors, which also approves the final 11 Commerce Équitable France et al. (2020), Martinko, K. responsible for discussing and deciding [Website] versions of new standards.7 The current (2020, 9 March) on a response to feedback received during 6 Fairtrade International (2019a) p.11 Standards Committee is industry-heavy, 12 Bray, J. G., & Neilson, J. (2017) stakeholder and public consultation 7 Fairtrade also certifies larger farms (‘hired labour 13 Fairtrade International, Living income [Website] considering it currently includes four organizations’) for certain products, including tea, plants/ periods, as well as for approving draft flowers and bananas. 14 Commerce Équitable France et al. (2020) p.46 versions of standards. The 10 to 15 8 Bray, J. G., & Neilson, J. (2017) 15 Fobelets, V., Rusman, A., & de Groot Ruiz, A. (2017) pp.4-5 members of the Committee include 9 See eg Fairtrade International, Products: Coffee [Website]. 16 ABVV-FGTB/Horval et al. (2018) p.3. See also SOAS (2014). representatives of various stakeholder 7 Rainforest Alliance & UTZ (2018) 10 Fairtrade International (2010b) p.3 17 Darko, E., Lynch, A., & Smith, W. (2017) p.6

62 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 63 industry members1 even though only two are By contrast, the Rainforest Alliance’s • The Rainforest Alliance Sustainable the idea that certification is only a series of required.2 NGOs, producers and certification Sustainable Agriculture Standard – both the Agriculture Standard prohibits the use of pass/fail requirements’ but leaves open the bodies each have the minimum required 2017 and 2020 versions – entirely prohibits GMOs, while the UTZ standard permits possibility of sanctions such as suspension number of representatives (two, deforestation and destruction of other them provided their use is declared.15 and decertification in severe cases.21 8 Any UTZ certified product whose producer two and one, respectively), leading natural ecosystems after 1 January 2014. The • There is no indication that either the discloses use of GMOs will not be eligible to a relative underrepresentation of standard also claims that ‘By complying with Rainforest Alliance or UTZ has a policy for the Rainforest Alliance/UTZ mutual smallholder and NGO interests. the core criteria of the Farm Requirements, requiring group-wide compliance with its farms also comply with the High Conservation recognition program.16 • The Rainforest Alliance is a Code standards, or that such a policy is envisaged Values approach as set by the HCV Network.’9 Compliant member of ISEAL,3 as was • A new Rainforest Alliance grievance procedure under the new standards. was issued in April 2020, open to anyone UTZ prior to the merger. • The Rainforest Alliance’s 2017 certification Traceability and transparency standard includes clear requirements on with a grievance concerning a member’s (or Standards Neither the Rainforest Alliance nor UTZ community and Indigenous rights, including CB’s) compliance with Rainforest Alliance or • requires physical traceability for cocoa, • Subsequent to its January 2018 merger with the need for constructive engagement, FPIC UTZ certification requirements – however, with mass balance being a permitted and UTZ, the Rainforest Alliance published a new and compensation where relevant (except it gives no details on the possible remedies 22 17 widely used option. The new Labeling & Sustainable Agriculture Standard in June in the case of smallholders, who must or sanctions available. The Rainforest 4 Trademarks Policy states that a single- 2020. Audits to this standard will become merely comply with the general prohibition Alliance’s 2017 certification rules state that 5 ingredient product will be eligible to carry mandatory in mid-2021; until then, the two on farming land legitimately disputed by a complaint may trigger an investigation the Rainforest Alliance Certified (RAC) seal if separate schemes will continue in operation. communities, apart from where a conflict audit which in turn may lead to suspension ‘100% of the equivalent certified volume has It appears that the Rainforest Alliance intends resolution process has been implemented and cancellation of a member’s certificate for 18 been purchased from RAC farms via a certified to continue its cattle certification in some and accepted).10 Under the UTZ standard, up to three years. This would presumably mass balance supply chain (crops that allow form, though it will no longer come under however, individual single-farm and multi- include complaints filed under the grievance 6 the mass balance option include cocoa, orange the main standard. Details of any future site producers are required only to resolve any procedure. It also lists five zero-tolerance juice, palm oil and hazelnuts)’; for multi- schemes are still awaited. unresolved land disputes within ‘a reasonable criteria (such as destruction of HCV areas ingredient products this condition applies to UTZ’s certification standard prohibits period of time’ (including compensation for after November 2005 and various workers’ • the ‘core ingredient’.23 deforestation of primary forest after 2008, but infringed land rights).11 As a general rule the rights issues), failure to comply with which permits clearing of secondary forest with the UTZ standard considers a period of up to five results in immediate denial or cancellation • According to the new labelling policy, in 19 relevant title and/or permits (‘reforestation years as a reasonable time frame.12 The new of the certificate without prior suspension. identity preserved or segregated supply activities of at least equal ecological value’ 2020 standard follows the 2017 Rainforest Although the Rainforest Alliance’s states that chains a product can carry the RAC seal if it are required from individual single-farm Alliance standard in requiring farms to obtain ‘By complying with the core requirements of (or its core ingredient) contains at least 90% and multi-site producers, but not from FPIC, including negotiated compensation, the Farm Requirements, farms also comply certified content.24 7 for any activity ‘diminishing the land or with the High Conservation Values approach’ associations or cooperatives of producers). Marketplace 2.0, the Rainforest Alliance’s 20 • resource use rights or collective interests of the new standard does not appear to contain traceability platform, is password-protected Indigenous peoples and local communities’.13 this explicit prohibition on HCV destruction 1 Rainforest Alliance, Rainforest Alliance Standards and not generally accessible.25 Committee [Website] It also adopts the Rainforest Alliance’s explicit post–November 2005. It further adopts an 26 27 2 Rainforest Alliance & UTZ (2018) p.2 prohibition on large or individually certified ‘assess-and-address’ approach to issues such • Both UTZ’s and the Rainforest Alliance’s 3 ISEAL Alliance, ISEAL community members [Website] farms farming disputed land unless the as child labour, forced labour, discrimination certification criteria require producers and 4 Rainforest Alliance (2020d) dispute has been resolved.14 and workplace violence. The Rainforest producer groups to provide up-to-date 5 Rainforest Alliance (2020, 1 July) Alliance states that it is ‘moving away from 6 The 2019 draft standard for smallholders states that in 21 Rainforest Alliance (2020e) the course of the process of defining priority sectors in 22 See Rainforest Alliance (2020, 6 April) and UTZ, Mass the wake of the merger with UTZ, ‘the decision was made 15 Rainforest Alliance (2017a) p.37, Rainforest Alliance balance in cocoa [Website]. The Rainforest Alliance also not to include cattle in the scope of this new Rainforest (2020d) p.45, UTZ (2015b) p.21 offers a mass balance option for coconut oil, palm oil 8 Rainforest Alliance (2017b), Rainforest Alliance (2020d) Alliance standard. Recognizing the added value our and orange juice; see Rainforest Alliance (2018a) p.6. current standard has, we are exploring ways for the cattle p.43 16 Rainforest Alliance, Mutual recognition program [Website] 23 Rainforest Alliance (2020c) pp.4-5 certification program to continue through a different 9 Rainforest Alliance (2020d) p.73 approach. ... For the current certificates with a cattle 17 Rainforest Alliance (2020b) 24 Rainforest Alliance (2020c) pp.4-5 scope, the Rainforest Alliance will establish the timeline 10 Rainforest Alliance (2017b) pp.44,48,52-53 18 Rainforest Alliance (2017a) pp.12,15-17 25 Rainforest Alliance, Marketplace 2.0 [Website] and details of any transition with ample warning and 11 See UTZ (2015b) p.14 and UTZ (2018a). will support the transition to a new program if that is 19 Rainforest Alliance (2017a) p.10 26 UTZ (2015b) p.14 and UTZ (2015a) p.13 12 UTZ (2018a). the result of our current exploration.’ Source: Rainforest 20 Rainforest Alliance (2020d) p.75 27 Rainforest Alliance (2017b) p.30 Alliance (2019) pp.4-5. 13 Rainforest Alliance (2020a) p.4 7 UTZ (2015a) p.39, UTZ (2015b) p.37 14 Rainforest Alliance (2020d) p.72

64 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 65 Z

maps of their production areas (including Audits Palm oil certification schemes crop areas, protected areas, etc), and both • UTZ and the Rainforest Alliance have separate publish regularly updated lists of their pools of accredited CBs, which will be merged 1 producer members. The publicly available once the new standard comes into effect.9 map on the Rainforest Alliance website,2 however, thus far only shows the locations • Under the current standard, the rules for of certificate holders and some basic Rainforest Alliance routine (certification information about the producers. and surveillance) audits of groups of farms stipulate that only a sample of farms within • Details of grievances are not made public the group will be evaluated; the proportion except if there is a legal obligation to do of farms covered and the basis on which they so or one of the involved parties makes are chosen are not clear, though the rules do 3 a public statement. state that good performance in a certification • The Rainforest Alliance publishes summary audit over several years can be rewarded by audit reports on its website, regardless of halving the size of the sample for the next the certification decision. It also produces surveillance audit.10 UTZ, by comparison, a separate list of newly suspended and requires auditing of ‘at least the square root cancelled memberships every three months.4 of the total number of group members’.11 UTZ does not appear to make summary The new standard takes a similar approach, audit reports publicly available at this basing the sample size on the square root time. Its lists of producer members include of the number of group members, adjusted producers that have had their certification for risk (so groups with a higher level of suspended or revoked but give no details of compliance risk are audited more heavily).12 the nonconformities for which they were Unannounced audits can be performed 5 • sanctioned. The same applies to its list of ‘RA ‘to respond to a specific grievance, or an 6 approved certification bodies’. issue identified as high risk to the credibility • The new standard describes a ‘certificate of the program’.13 holder profile’ that will provide information Implementation and effectiveness on sustainability performance and serve According to the 2018 Cocoa Barometer, as ‘a valuable tool to drive continuous • neither the Rainforest Alliance nor UTZ improvement, empower producers, build ‘have been able to significantly contribute demand for certified product, and channel to ensuring [cocoa] farmers achieving [sic] supply chain investments’.7 These profiles will a living income, reducing child labour, or © Greenpeace / John Novis be available to buyers and partners,8 but it is halting environmental degradation’.14 19 November 2014 - Cameroon. Cocoa farming. not yet clear whether the general public will be able to view them. • In April 2019 the Rainforest Alliance cases of mismanagement, and severe non- The Washington Post also cast doubt announced that in West Africa ‘we have • compliances in the areas of traceability, on the Rainforest Alliance’s claims of discovered that non-certified cocoa has deforestation and farming in protected areas. farm-to-ship traceability, saying that potentially been entering certified supply As a consequence, some certificate holders ‘industry experts’ claimed that this ‘would 1 Rainforest Alliance, Certificate search and public chains. We have identified groups with summaries [Website], and UTZ, Producers [Website] have been decertified.’15 As well as acting require a census, surveys and satellite maps 2 Rainforest Alliance, Our impacts [Website] against certified producers, the Rainforest that aren’t available’.17 3 Rainforest Alliance (2020b) p.3 9 Rainforest Alliance, How to become an authorized Alliance issued warnings or suspensions to a Rainforest Alliance certification body [Website], UTZ 4 Rainforest Alliance Certificate search and public (2017) number of CBs. According to the Washington summaries [Website] 10 Rainforest Alliance (2017a) pp.8,14-15 Post, these CBs, mostly approved by UTZ, 5 UTZ, Producers [Website] 11 UTZ (2018b) p.24 were responsible for 90% of certifications in 6 UTZ, RA approved certification bodies for the UTZ 16 programs [Website] 12 Rainforest Alliance (2020g) pp.69-70 Côte d’Ivoire in 2018. 7 Rainforest Alliance (2020d) p.8 13 Rainforest Alliance (2020g) p.133

8 Rainforest Alliance (2020f) p.1 14 ABVV-FGTB/Horval et al. (2018) p.3 15 Rainforest Alliance (2019, 29 April) 16 Mufson, S. (2019, 29 October) 17 Mufson, S. (2019, 29 October)

66 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 67 Palm oil certification schemes

Roundtable on Sustainable Palm Oil (RSPO)

The RSPO has relatively strong environmental and social standards on paper, including recently requiring no deforestation through implementing the High Carbon Stock Approach (HCSA). It also has moderately strong multi-stakeholder governance structures and good levels of transparency. However, implementation of its standards is often weak, with serious audit failures being reported, many members failing to meet the full range of membership requirements and grievances slow to be addressed. CBs are contracted directly by clients who are seeking to be certified, causing conflicts of interest, and both NGOs and the RSPO’s own accreditation body report widespread and systemic failure to uphold the RSPO standards. Another major weakness is with the RSPO’s reliance on mass balance and book and claim supply chain models, where untraced, uncertified palm oil is mixed with certified product. While the more expensive identity preserved and segregated options can ensure certified oil is kept © Kemal Jufri / Greenpeace separate throughout the supply chain, overall RSPO certified oil cannot be guaranteed to be free 6 May 2013 - Indonesia. Transport of oil palm fruit by truck from PT Inti Indosawit Subur, of deforestation or human rights abuses. an oil palm plantation owned by Asian Agri, the palm oil division of the RGE group. A WWF investigation documented trade from illegal oil palm plantations in Tesso Nilo National Park to the RSPO-certified PT Inti Indosawit Subur mill.

Governance and decision making • The RSPO is a Code Compliant member of the 5 9 • The RSPO is a multi-stakeholder body ISEAL Alliance. (HCS forest), with a cut-off date of 15 it currently relies on HCV probability mapping November 2018.10 However, this change is to identify forest risk areas and voluntary in whose establishment WWF played an Standards 11 important role.1 However, over time its still being phased in, and given reports of commitments by smallholders to only • On paper, the RSPO has strong requirements 12 14 membership has become dominated by past implementation failures it remains develop within ‘low risk’ areas. with regard to community and human rights, 2 to be seen if enforcement measures will business and it has limited structures or • RSPO standards on peat have improved, including FPIC, participatory mapping be fully and robustly put in place on the rules to ensure other members, such as civil 15 and a documented grievance procedure.6 with all expansion on peat now prohibited. society and environmental organisations, ground. Additionally, the RSPO has yet to However, as RSPO member Forest Peoples However, apart from those that fail a are fairly represented, including in the develop guidance for implementation of Programme admits, industry non- ‘drainability assessment’, the standards 3 the HCSA in high forest cover landscapes General Assembly’s decision making. With 7 still do not require the rewetting and/ compliance is prevalent (see below). (HFCLs), posing a risk that exemptions the exception of smallholders, some of or restoration of the millions of hectares allowing some continued deforestation may whom are Indigenous, Indigenous Peoples • In November 2018, the RSPO made the of drained peatlands that have oil palm be made for some countries.13 and local communities are also largely not significant step of voting to incorporate planted on them, which is essential for directly involved in the RSPO’s governance ‘no deforestation’ and the HCSA into its The 2019 RSPO independent smallholder climate change mitigation.16 8 • system, despite (as landholders) being palm oil certification standards. Prior to standard has not yet incorporated the HCSA; important stakeholders.4 the 2018 amendments, RSPO standards 14 RSPO (2019c) p.41, RSPO (2018a). HCV 1–3 probability required the protection of only some types maps are currently available only for Malaysia, of forest (‘primary’ forest and HCV areas). 9 RSPO (2018b) Indonesia, Thailand, Honduras and Ghana. ‘Low 1 RSPO, About [Website] risk’ areas include bare land, pastures and existing Members that are growers are now also 10 Ie, no development is permitted to take place in these agricultural lands (see RSPO (2018a) p.2). 2 RSPO, Impact: RSPO in numbers [Website] required to protect areas of natural forest areas after this date. 15 RSPO (2018d) pp.57-59 3 The RSPO has recently changed its voting rules to allocate 11 The RSPO has published guidelines to implement the NGOs 25% of the vote, but still requires a simple majority integration of HCS in the assessment. See RSPO (2019, 12 16 See IUCN, Issues brief: Peatlands and climate change of votes to pass a resolution at the General Assembly (see June). [Website]. The RSPO has published a best practices RSPO (2019, 6 November)). In contrast, the FSC has three manual for management and rehabilitation of natural 12 See eg EIA (2015), EIA (2019). equal social, environmental and economic chambers, and 5 ISEAL Alliance, ISEAL community members [Website] vegetation for oil palm on peat (RSPO (2019d)) and a a resolution must have majority support in all chambers to 13 RSPO (2018, 21 November). The HCSA defines HFCLs as procedure for growers to assess and address subsidence 6 RSPO (2018d), Efeca (2016), McInnis, A. (2017) pp.6-10 pass; see FSC, Membership chambers [Website]. areas with >80% forest cover. Source: HCSA (2018, 14 and flood risks on peatlands (RSPO (2019a)); however, 7 Forest Peoples Programme (2015, 1 June) June). these procedures are voluntary. 4 Colchester, M. (2016) p.158, McInnes, A. (2017) pp.34- 35,37 8 RSPO (2018c)

68 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 69 • The independent smallholder standard • There is no transparency regarding the is targeted at large groups of organised identity of suppliers whose palm oil smallholders with a group manager is mixed with certified palm oil in the to facilitate. It is not well adapted to mass balance system, where members independent smallholders (< 6 ha1) in small are required to collect chain of custody cooperatives, so will not provide a way into information but not to make it publicly certified markets for them.2 The RSPO’s available.8 With mass balance or book and maximum production area for individual claim systems there is a risk that the oil that smallholder group members is 50 ha unless actually goes into products may have been a different national level has been agreed produced by a company group associated on;3 the standard thus focuses more on with deforestation.9 Additionally, the lack small enterprises with large planted areas of transparency on ownership links to than on real independent smallholders who other companies means RSPO members rely largely on family labour. may be linked to companies carrying out deforestation and human rights abuses.10 • The RSPO has separate certification systems for production and supply chains.4 Its • RSPO members agreed in 2013 that all Principles and Criteria for sustainable palm companies would be required to publish their oil production apply only to growers and concession maps the following year.11 Despite their own mills and plantations.5 Non- ongoing resistance, Indonesian government grower members are not required to follow officials confirmed in May 2017 that there the Principles and Criteria; nor are growers were no legal barriers to companies in providing ‘conventional’ (uncertified) Indonesia publishing concession maps on the sources associated with mass balance or RSPO platform.12 The Malaysian government book and claim systems.6 granted permission for publication of maps of concessions in Peninsular Malaysia and Traceability and transparency Sarawak in December 2019.13 The RSPO has • The RSPO offers four supply chain models: yet to publish a complete list of all of the identity preserved, segregated, mass balance maps on its publicly accessible mapping 7 and book and claim. platform,14 but data collection is improving and as of February 2021 it reported having received and published 95% (162 map 1 This is the definition given by Serikat Petani Kelapa Sawit (SPKS), the union that represents Indonesia’s submissions out of a total of 171 that should independent palm oil farmers. See eg CSPO Watch be provided by members).15 The scheme (2020a). claims to be following up with members 2 Brandi, C., & Hosang, C. (2015), SEnSOR (2016). The RSPO does have a program, the RSPO Smallholder who have not provided maps or complete Support Fund, that aims to help smallholders get data, as is required by their membership. certified, for example by providing assistance with The level of map transparency it provides is the costs of certification (see RSPO, Introduction RSSF [Website]). However, a recent report by Climate Focus and the Tropical Forest Alliance found that ‘most independent smallholders continue to find it difficult 8 RSPO (2018d) to achieve certification and the number of certified 9 See eg Forest Peoples Programme (2019, 13 June) and smallholders remain limited; with fewer than 3,400 Morrison, O. (2020, 6 March). independent smallholders in Indonesia and Malaysia certified so far’ (Bakhtary, H., et al. (2020) pp.23-24). 10 Eg RSPO member First Resources; see MacInnes, A. (2021). 3 In Indonesia, for example, the threshold size is 25 ha. See RSPO (2019c) p.8. 11 RSPO (2013, 14 November) 4 RSPO, RSPO supply chains [Website] 12 RSPO (2017, 31 May) © Micha Patault / Greenpeace 5 RSPO (2018d) p.6 13 RSPO (2019, 12 December) 15 March 2016 - Cameroon. A truck loaded with oil palm fruits in Socapalm (Société 6 RSPO (2018d) p.6 14 RSPO, GeoRSPO [Website] Camerounaise de Palmeraies) oil palm plantation near Apouh. Working and living conditions in Socfin’s subsidiaries concessions are still way under the international standards. 7 RSPO, RSPO supply chains [Website] 15 Email response from RSPO 22 Feb 2021

70 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 71 the best offered by any of the certification • The RSPO has been repeatedly accused schemes at this time. of failing to enforce its own standards10 and demonstrate positive environmental • The RSPO has an online database for tracking and social impact.11 Many members have complaints. Details on grievances are reportedly failed to meet all the membership publicly available.1 requirements, including having all their • In addition to compliance audits, members are concessions certified.12 Significantly, 14 of required to submit an Annual Communication the 25 corporate producer groups exposed by of Progress (ACOP) every year reporting on Greenpeace’s 2018 Final Countdown report13 their progress towards the goal of achieving as involved in deforestation are members 2 full sustainability. ACOPs and summaries or include companies that are members of audit reports are publicly available, as of the RSPO, and one more is very closely are summaries of social and environmental associated with Wilmar, an RSPO member.14 3 impact assessments. In addition, according to CRR two of India’s Audits three largest palm oil refineries are RSPO members but have no NDPE commitments All RSPO CBs are accredited by ASI.4 • and buy from companies known to be • CBs are contracted and paid by the companies carrying out deforestation.15 being audited, creating an intrinsic conflict of More than two-thirds of the palm oil producer interest. Furthermore, CBs and auditors are • groups most linked to the recurrent fires reportedly typically selected based on price in Indonesia in 2019 – the worst since the and not necessarily competence.5 disastrous 2015 fire season16 – are members • The RSPO requires risk-based auditing and or include companies that are members surveillance of accredited CBs, but it does not of the RSPO.17 RSPO Principles and Criteria require unannounced audits.6 specifically prohibit the use of fire and Implementation and effectiveness require fire prevention and control measures, including with adjacent stakeholders.18 • At the RSPO’s annual roundtable in 2016 ASI disclosed that most CBs assessing palm oil • The RSPO often only acts on its plantations were failing to uphold the RSPO implementation weaknesses when NGOs standard, undermining its credibility.7 ASI has bring formal complaints, and even then the continued to find significant variation in the complaint system is slow and ineffective. For types of non-compliance identified by CBs example, there are many documented cases 8 of the RSPO failing to act decisively when and those that go undetected. An EIA report © Greenpeace / John Novis from November 2019 also revealed that non- violations of human or Indigenous rights are 15 May 2012 - Sumatra, Indonesia. Close-up of an oil palm fruit. 19 adherence to the RSPO standards, certification reported. The majority of complaints the system and auditing rules was systemic and 20 widespread and had led to labour abuses and 10 See eg EIA (2015), EIA (2019) and Greenpeace (2013). RSPO receives derive from land disputes, but a formal complaint lodged against one of 23 destruction of forests.9 11 Morgans, C. L., et al. (2018) these often take years to resolve. IOI’s subsidiaries in 2010. It only suspended the group’s membership in 2016, after 12 Less than a fifth of company members claimed to be 100% • Similar concerns apply to other types of certified by the end of 2017. Source: WWF & ZSL (2019) p.3. a second complaint was lodged by RSPO The RSPO requirement is that all existing members have all grievances. For example, despite being 1 RSPO, Case tracker [Website] member Aidenvironment.24 their concessions certified by 2023. aware that IOI Group had been clearing 2 Efeca (2016) p.3 13 Greenpeace (2018b) rainforest since 2008, when Greenpeace 3 WWF Malaysia (2018) p.11 14 For more details see Greenpeace (2018a). 21 first exposed it, the RSPO ignored evidence 23 RSPO, Complaint: IOI Pelita Plantation SDN BHD (a 4 RSPO, Certification bodies [Website] 15 Chain Reaction Research (2020, 28 April) and complaints from NGOs22 and sidelined subsidiary of IOI Corporation Berhad) [Website] 5 Jennings, S. (2016) pp.8-9. See also RSPO (n.d.-b). 16 Jong, H. N. (2020, 10 February) 24 IOI’s RSPO certification was suspended on 4 April 2016 6 RSPO (2017b), WWF Malaysia (2018) pp.10-11 17 Greenpeace (2019a) and reinstated on 8 August 2016. For full details see RSPO, 7 Colchester, M. (2017, 14 February) 20 Colchester, M. (2016) pp.159-161 Complaint: PT Sukses Karya Sawit (PT SKS), PT Berkat 18 RSPO (2018b) Nabati Sawit (PT BNS), PT Bumi Sawit Sejahtera (PT 8 ASI (2019, 29 October) 21 Greenpeace (2008b) 19 See eg Colchester, M. (2017, 14 February), Forest Peoples BSS), PT Sawit Nabati Agro (PT SNA) (a subsidiary of IOI 9 EIA (2019) Programme (2015, 1 June) and Lierley, E. R. (2017). 22 Eg Colchester, M., & Chao, S. (Eds) (2013). Corporation Berhad) [Website].

72 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 73 Indonesian Sustainable Palm Oil / Malaysian Sustainable Palm Oil (ISPO/MSPO) PALM OIL INNOVATION GROUP (POIG) CASE STUDY ISPO and MSPO are national standards created by the Indonesian and Malaysian governments POIG was created to address system for this. Having process, POIG does not together with the palm oil industry. They are based on existing laws and regulations, with the weaknesses of RSPO third-party verification ensure all the suppliers limited input from and involvement of civil society or NGOs. The standards, which are available standards and, to some of compliance to POIG of a member are POIG only for purchase and not publicly, are reportedly relatively weak, lacking core requirements degree, inadequacies in the indicators is the best way for compliant. While POIG has on no deforestation (such as via the HCSA), no expansion onto peatlands, implementation of audit process. Its existence a producer to demonstrate demonstrated that high HCV approach, comprehensive FPIC and respect for Indigenous and local community rights, testifies to the failures of that it complies with the NDPE standards are possible, protection of smallholders’ and workers’ rights or prohibition of the use of fire. ISPO does RSPO certification.1 The NDPE policies that have been including resulting in many requirements in the POIG adopted by leading palm oil of these being adopted by not have a functional chain of custody system for its certified products, nor does it require Charter2 and indicators for consumer goods companies, the RSPO in 2018,4 its ties transparency. While both schemes are nominally mandatory, providing them with far greater verification3 are designed as processors, traders and to the RSPO and limited reach than voluntary schemes, they have weak accreditation oversight for their certification a ‘best in class’ add-on to the growers, so they can break implementation mean POIG bodies and weak implementation of systems for compliance with their standards. RSPO standards and audit the link to deforestation and is not the answer to the process. However, POIG itself human rights abuses. problem of weak certification. Governance and decision making Standards is not a certification scheme. POIG is, however, useful About 19% of the world’s for regulators in importing ISPO and MSPO are national government ISPO standards are available only for purchase POIG requires segregated or palm oil is RSPO certified, and • • countries in defining and industry initiatives. They are based and not publicly. These standards have been identity protected trade in oil just over 1% of the world’s verifiable commodity import to ensure physical traceability palm oil is POIG verified. on national-level laws and regulations widely assessed as being weak, in particular standards for stopping is possible, and relies on As POIG implementation is enabling palm oil processors and growers due to the lack of core requirements on no deforestation and human the RSPO Chain of Custody currently limited to grower to claim ‘sustainability’, rather than deforestation (such as via the HCSA), no rights abuses in palm oil members’ own plantations, comprehensive sets of standards and expansion onto peatlands, implementation supply chains. and retailer, manufacturer 1 1 POIG (2013, 28 June) quality assurance systems. of HCV approach, FPIC and respect for and trader requirements Indigenous and local community rights, 2 POIG (2013) • The dominance of industry and government implementation is still in protection of smallholders’ and workers’ 3 POIG (2019) 4 POIG (2018, 15 November) in the structure and governance of the MSPO rights and the use of fire.6 To make matters system leaves little room for meaningful worse, the Indonesian government has input from and participation by recognized recently proposed legislation that will stakeholders and organisations.2 Nonetheless, weaken environmental impact assessment MSPO standards-setting processes are (EIA) requirements, a core component of stronger due to MSPO’s greater inclusivity ISPO standards.7 and multi-stakeholder oversight committee,3 compared with ISPO’s very opaque and poor • MSPO standards (also available only for standards-setting governance.4 purchase) are considered stronger than ISPO’s with regard to rights and FPIC.8 • Neither MSPO nor ISPO is a member of Requirements regarding deforestation and the ISEAL Alliance. 5 conversion on peatland for new planting are tied to national legislation.9

6 See eg Efeca (2016), Efeca (2020a) pp.2-3, EIA & Kaoem Telapak (2020), IUCN NL (2019), Kusumaningtyas, 1 Aubert, P-M., Chakib, A., Laurans, Y. (2017) pp.29-30, R. (2018) and McInnis, A. (2017). See also Ministry of Efeca (2016) Agriculture of the Republic of Indonesia et al. (2015). 2 Aubert, P-M., Chakib, A., Laurans, Y. (2017) p.30, WWF 7 Jong, H. N. (2020, 11 February) Malaysia (2018) 8 Efeca (2016), McInnis, A. (2017). See also Malaysian Palm 3 Efeca (2016) pp.1-2, WWF (2017) p.6 © Ulet Ifansasti / Greenpeace Oil Certification Council, Part 3: General principles for oil 4 EIA & Kaoem Telapak (2020) palm plantations and organised smallholders [Website]. 26 March 2018 - Papua, Indonesia. Aerial view of primary forest near the river Digul. 5 ISEAL Alliance, ISEAL Community members [Website] 9 See eg (CSPO Watch 2019, 2020b). See also Malaysian

74 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 75 Soya certification schemes

• Both MSPO and ISPO are currently revising Audits their standards. So far the revised ISPO • ISPO CBs are accredited directly by the standard has reportedly largely ignored civil ISPO Commission rather than having an society organisation and public consultation independent body to do this.7 There are input; indeed, it has been criticised by reportedly no independent monitors to assess NGOs in Indonesia for failing to incorporate the credibility and accountability of the ISPO previously agreed aspects from a multi- scheme.8 stakeholder consultation.1 It does not include clear language that would ensure Indigenous • MSPO CBs are accredited by Standards 9 rights are protected, including the right to Malaysia, the national accreditation body. FPIC, or prohibit deforestation – only primary • The MSPO standard reportedly does not forests are clearly protected, and there is no require an adjustment to audit intensity reference to Indonesia’s moratoria on new in relation to issues found,10 and allows licenses for oil palm plantations and clearing unannounced audits but does not require primary forests and peatlands.2 The draft them.11 For ISPO, the requirements on both ISPO standard reportedly does include a new of these fronts are unclear.12 principle on transparency, but this focuses Implementation and effectiveness principally on the origin and prices of fresh fruit bunches (FFB) and requiring companies • ISPO compliance is nominally mandatory to commit to a code of ethics.3 for all palm oil operations in Indonesia and is based on compliance with existing Traceability and transparency plantation laws and regulations.13 It therefore • MSPO has recently established a chain of has the advantage of having much broader custody system, MSPO Trace.4 application than voluntary standards. • ISPO, at present, reportedly does not have However, actual compliance is limited by a chain of custody system; the certification conflicting and poorly enforced regulations 5 and companies not seeing any market applies only to plantation growers. © Ardiles Rante / Greenpeace 14 benefit and so delaying implementation. 11 September 2013 - Central Kalimantan, Indonesia. Land clearance ISPO has no transparency requirements • There are coordination problems related to in an oil palm concession owned by PT Andalan Sukses Makmur, a for assessments, certified areas, disputes different policies stemming from different subsidiary of Bumitama Agri Ltd. 6 and complaints or audit results, and MSPO ministries, and the division of responsibilities provides only minimal transparency. between the national government and local The ISPO scheme appears to have weak MSPO certification became mandatory 15 • • governments in Indonesia. provisions for sanctions against non- from 1 January 2020, with the government compliant producers, and has demonstrated threatening fines and possible license failures even on basic legal issues such revocation for non-compliant producers. 7 Ministry of Agriculture of the Republic of Indonesia et as ensuring proper permit processes are 18 According to MSPO Trace, as of February al. (2015) followed and addressing the several million 2021 88% of Malaysian producers were 8 Suara Jakarta (2016, 11 October) hectares of oil palm plantations located certified under the scheme, including Palm Oil Certification Council, Part 3: General principles 9 Malaysian Palm Oil Certification Council, Accreditation 16 for oil palm plantations and organised smallholders of certification bodies [Website] in the forest estate. Its lack of strong nearly 100% of organised smallholders [Website]. 10 WWF Malaysia (2018) p.11 authority to implement and enforce the and plantation companies and 38% of 1 EIA & Kaoem Telapak (2020), Jong, H. N. (2020, 29 19 11 WWF Malaysia (2018) p.10 certification requirements due to the failure of independent smallholders. April), Pearce, S. (2020, 9 April). See also Civil Society Representative for ISPO Strengthening (2017). 12 IUCN NL (2019) p.28 government agencies to monitor and enforce 2 EIA & Kaoem Telapak (2020) p.4 13 Ministry of Agriculture of the Republic of Indonesia et laws, is a fundamental flaw that greatly al. (2015), Jong, H. N. (2020, 29 April) 17 3 EIA & Kaoem Telapak (2020) p.3 reduces its effectiveness. 14 Hidayat, N. K., Offermans, A., & Glasbergen, P. (2018). 4 https://mspotrace.org.my/Home As of April 2020, just over a third of Indonesia’s 5 Civil Society Representative for ISPO Strengthening (2017) plantation companies (557 of 1,500) and less than 1% of 16 See Forest Watch Indonesia (2017, 30 March) and smallholdings had been certified as sustainable by the Hidayat, N. K., Offermans, A., & Glasbergen, P. (2018). 6 Civil Society Representative for ISPO Strengthening ISPO. Source: Jong, H. N. (2020, 29 April). 18 Bernama (2020, 10 July), Efeca (2020b) (2017), EIA & Kaoem Telapak (2020) p.4, WWF Malaysia 17 See Hidayat, N. K., Offermans, A., & Glasbergen, P. (2018) p.11 15 Hidayat, N. K., Offermans, A., & Glasbergen, P. (2018) (2018) and Kusumaningtyas, R. (2018). 19 https://mspotrace.org.my/Home

76 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 77 Soya certification schemes Standards supporting sustainable production,14 and • The RTRS production standard is a relatively not that they are buying deforestation-free strong standard on natural ecosystem products, this still allows the companies a conversion as it forbids any conversion of green image. 6 Round Table on Responsible Soy (RTRS) ‘natural lands’ after June 2016. • When RTRS certified physical material is • For areas critical for biodiversity (hotspots), purchased, it is monitored throughout the which includes nearly all the Brazilian supply chain, and certification applies to both RTRS certification is often considered by the industry as one of the best of its kind, with buyers Amazon, the cut-off date is May 2009.7 This producers and supply chain actors. There are making the claim that if they purchase 100% RTRS soya, they are supporting sustainable means that although newly converted land is three supply chain models: segregated, mass production.1 But this is a highly problematic claim, as the vast majority of RTRS soya sales are not eligible for RTRS certification, historical balance, and country material balance (a mass based on credits, rather than physical flows of soya. Buyers thus might not know whether the conversion is accepted, except in HCV areas. balance accounting system implemented at 15 producers of the actual products they are buying are engaging in deforestation or other ecosystem the national level). National interpretations of the standard are destruction. Buying credits is supposedly intended to encourage farmers to produce responsible • available, taking into account differences in • Updates on certified producers and certified soya, but the premium farmers receive for credits is too low to compensate them for not clearing regulations and production standards.8 volumes are available in the Marketplace land for soya production. As a result it is likely that most certified farms would not have engaged section of the RTRS website.16 Annual audit in land conversion even without the RTRS. On top of that, companies can sell RTRS soya or credits • The RTRS allows GMO soya but ensures reports contain information on certified from their certified farms while still deforesting on non-certified farms. Claims of supporting that it is not mixed with non-GMO farms and their locations, and producer audits 9 sustainable production are therefore misleading, allowing companies a green image even if they certified material. are published on the RTRS website.17 are still contributing to human rights abuses and/or the destruction of nature. Traceability and transparency • The RTRS has a grievance procedure,18 but it 1 See RTRS, RTRS claims [Website]. • There are two ways to buy RTRS certified was only published in mid-2020 and the RTRS soya. The first is in the form of credits, claims that no complaints have been received where producers are granted one credit for since then. This makes it impossible to say Governance and decision making The General Assembly is the RTRS’s highest • each tonne of certified soya they produce, how complaints are dealt with. decision-making body. All members, • The RTRS was initially conceived in 2004 and buyers can purchase credits to support including both participants and observers, Audits by a committee whose members – Grupo responsible soya production (but not take part, though only participating Amaggi, Unilever, COOP, WWF, Dutch the actual soya itself). The second is by • RTRS-endorsed accreditation bodies are members have a vote.3 development organisation Cordaid and purchasing physical flows of certified soya.10 responsible for accrediting and auditing CBs 19 Brazilian smallholder organisation Fetraf-Sul • The RTRS’s Executive Board is composed Both options are available via the RTRS’s for the scheme. – came together to prepare an international of a maximum of 15 representatives from online trading platform, and non-GMO • The RTRS requires CBs to consult with affected conference on responsible soya. The scheme each of the three member constituencies options exist for both.11 stakeholders during audits, contributing to the was formally established in 2006, but (producers; industry, trade and finance; civil 20 The vast majority of RTRS soya sales are level of assurance the scheme offers. Cordaid and Fetraf-Sul reportedly left the society), which all have the same voting rights • based on credits rather than physical flows of Producer audits are only carried out on a organisation committee in 2005 because they regardless of their share in membership.4 • soya.12 As with all such systems, buyers risk disagreed with not excluding GMO soya from producer’s certified farms and not at the whole The RTRS is a Community Member of the 21 2 • inadvertently supporting deforestation, as producer or company level. This means that the RTRS standard. 5 ISEAL Alliance. they do not know whether the producer of the companies can sell RTRS soya or credits from actual product they are buying is involved in their certified farms while still being involved deforestation or not.13 Although companies in deforestation on non-certified farms. that buy credits can only claim that they are

6 RTRS (2017) pp.23-24 14 See RTRS, RTRS claims [Website]. 7 RTRS (2017) pp.23-24 15 RTRS, RTRS soy [Website]; see also RTRS (2018). 8 RTRS, National interpretations [Website] 16 RTRS, Marketplace - Certified volumes and producers [Website] 9 RTRS (2018) pp.19-21 17 RTRS, Public audit reports [Website] 10 RTRS, RTRS soy [Website] 3 RTRS, Who we are [Website]; see also RTRS, Members 18 RTRS (2019) 11 RTRS, Marketplace [Website], and RTRS soy [Website] [Website]. 19 RTRS, What are the benefits of RTRS certification? 2 The RTRS’s principles and criteria were finalised in 2010, 12 Data on credits buyers and physical soya buyers is available 4 RTRS, Who we are [Website] [Website] after a series of consultations. See Hospes, A., van der from the RTRS Marketplace. See RTRS, Marketplace Valk, O., & van der Mheen-Sluijer, J. (2012) pp.38-43. 5 ISEAL Alliance, ISEAL community members [Website] [Website]. 20 Kusumaningtyas, R., & van Gelder, J. W. (2019) p.21 13 RTRS, RTRS soy [Website] 21 RTRS (2017)

78 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 79 ProTerra

ProTerra has stricter sustainability criteria than the RTRS, prohibiting conversion of natural vegetation and HCV areas after 2008, excluding GMO crops and providing a system of identity preservation (IP) – that is, traceability of an individual certified producer’s soya throughout the supply chain. However, producer certification applies only to the farms a producer chooses to have certified, rather than to all of a producer’s or company’s farms. This means companies can be involved in deforestation or violations of economic, social and cultural rights on non-certified farms and can pick and choose which farms to have certified. Thus, buyers who choose to support ProTerra certified operations might be filling the coffers of parent companies engaging in destructive practices elsewhere. Also problematic is the lack of transparency: detailed production or trade data at the company level is not available, producer audits are not made public and details of complaints are not released, so it is difficult to verify the effectiveness of the standard’s implementation.

Governance and decision making Standards • The ProTerra standard was established • The ProTerra standard is based on the Basel in 2006 by FoodChain ID (previously Cert Criteria on Responsible Soy, published in 6 © Otto Ramos / Greenpeace ID). The ProTerra Foundation became 2004 by WWF and Coop Switzerland, but 25 July 2017 - Amapá, Brazil. A soya plantation in a independent in 2012. Standard revisions applies to a broad range of agricultural Cerrado area within the Amazon. are developed through a multi-stakeholder commodities (not just soya). These criteria process with input from internal and external exclude GMO crops and require identity 1 Implementation and effectiveness • SLC Agrícola is an example of a soya actors. preservation – that is, traceability of an individual certified producer’s output producer in the Cerrado that has RTRS The Board of Directors is the main decision- The premium farmers receive for credits • 7 • 3 throughout the supply chain. (reportedly around 0.5% of the soya price)1 certification for some of its farms but making body, comprising four directors. Two is not seen as a sufficient incentive to has reportedly engaged in repeated of the current directors are also connected • The cut-off date for the conversion of native 2 8 discourage them from engaging in land large-scale deforestation on other farms to FoodChain ID , which carries out the vegetation and HCV areas is 2008. which are not certified (see box ‘RTRS & ProTerra audits.3 The Stakeholder Council conversion. As a result it is likely that most • For ProTerra the unit of certification ProTerra implementation failure – Alleged has a strategic advisory role; it is composed certified farms would not have engaged in includes the entire farm.9 However, producer greenwashing of soya from SLC Agrícola, of between three and nine members, with the land conversion even without the RTRS. certification applies only to the farms a Brazil, for Lidl’ on page 44).5 current composition representing only the They are mostly located in areas with a long producer chooses to have certified, rather 4 2 industry. There are no NGOs represented on agricultural history. than to all of a producer’s or company’s the board or stakeholder council. farms. This means companies can be • ProTerra is not currently a member of the involved in deforestation in non-certified ISEAL Alliance.5 farms and can pick and choose which farms to have certified (as CRR reports in the case of SLC Agrícola; see box ‘RTRS & ProTerra implementation failure – Alleged greenwashing of soya from SLC Agrícola, Brazil, for Lidl’ on page 44). 1 ProTerra Foundation (2019e) 2 Brad Riemenapp is President & CEO of FoodChain ID. Augusto Freire left his position at FoodChain ID in January 2021 6 ProForest (2004) 3 SLC Agrícola, Our farms [Website] 3 ProTerra Foundation, About us [Website] 1 Solidaridad (2020, 9 April) 7 ProTerra Foundation (2019c) pp.32-35 5 Chain Reaction Research (2020, 17 April) and Chain 4 ProTerra Foundation, About us [Website], ProTerra 2 Cameron, B. (2017) Reaction Research (2019, 9 May) Foundation (2019d) 8 ProTerra Foundation (2019c) p.29 5 ISEAL Alliance, ISEAL community members [Website] 9 ProTerra Foundation (2019c) p.8

80 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 81 EUROPEAN FEED MANUFACTURERS’ FEDERATION (FEFAC)

FEFAC represents European protection legislation.6 So, as showed that 10 of the feed associations in 27 EU long as operators stay within standards prohibit only countries.1 It first released the law, they are effectively illegal deforestation. Just its Soy Sourcing Guidelines complying with the FEFAC seven of the standards in 2015,2 providing guidelines. However, excluded deforestation and recommendations on in many countries legal conversion of all native sourcing responsible soy, and compliance is not enough vegetation after 2008 or published an updated version to halt deforestation and 2009.9 in 2021.3 The guidelines conversion of areas with high Companies and/or countries comprise 54 ‘essential’ and biodiversity. Large areas of publicly claim they aim 19 ‘desired’ criteria regarding savanna could, for example, for 100% sustainability by © Otto Ramos / Greenpeace legal compliance, responsible be legally converted in the sourcing soya under schemes 25 July 2017 - Amapá, Brazil. Soybeans working conditions, Brazilian Cerrado biome, an that are compliant with the growing in a Cerrado area in the Amazon. environmental responsibility, area of enormous ecological FEFAC guidelines. However, good agricultural practices, value that has already lost such general guidelines that respect for legal use of land half of its natural vegetation apply to a number of schemes Traceability and transparency Two of ProTerra’s directors are the and protection of community and remains under threat.7 • are only as strong as their President & CEO and a director at relations.4 At present 18 The new version of the • ProTerra offers two chain of custody weakest link. In the case of 6 schemes and standards are Soy Sourcing Guidelines options: segregated and mass balance. FoodChain ID, which calls into question the FEFAC, because the majority considered to be compliant includes protecting natural According to ProTerra, in the latter case independence of the auditing company. of the certification schemes with the guidelines, of ecosystems as a desired only require compliance ProTerra soya is mixed only with non-GMO Implementation and effectiveness which five are traders’ criterion (with a cut-off 1 with local or national laws non-ProTerra soya. own schemes.5 date no later than 2020), but • ProTerra offers fairly comprehensive instead of enforcing true this is non-binding and still • Detailed production or trade data at the provisions related to forests, wetlands and The essential criteria require sustainability criteria, allows companies to source company level is not available, but ProTerra biodiversity conservation; however, it is compliance with the relevant sourcing from schemes soya produced in converted does provide summary information on the difficult to verify the effectiveness of the forest and ecosystem that adhere to the FEFAC natural ecosystems.8 compliance of its members.2 scheme’s implementation as it is lacking guidelines can in no way A study by Profundo be considered proof that a 3 in transparency in comparison to the RTRS • ProTerra has grievance procedures but until 1 FEFAC, Statistics [Website] analysing 17 certification company is sourcing products scheme.7 now has not released details of complaints, 2 FEFAC, Responsible sourcing standards endorsed under with no links to forest or which makes it impossible to say how they are • SLC Agrícola is an example of a soya [Website] the FEFAC soya guidelines ecosystem destruction and/or being dealt with. It does not rule out making producer in the Cerrado that has ProTerra 3 FEFAC (2021) human rights abuses. 4 8 4 FEFAC (2021) pp.6,11-27 details public depending on the case. certification for some of its farms but 6 FEFAC (2021) p.11 5 ITC Standards Map, FEFAC has reportedly engaged in deforestation 7 Greenpeace (2019c) p.6 • Producer audits are not made public. European Feed Manufacturers’ 9 Kusumaningtyas, R., & van and conversion of large areas of native Federation [Website] 8 FEFAC (2021) pp.17,33-34 Gelder, J. W. ( 2019) p.2 Audits vegetation on other farms which are not • ProTerra has only one approved CB certified (see box on page 44).9 (FoodChain ID).5

1 ProTerra Foundation (2019c) pp.53-56 2 ProTerra Foundation (2019b) 6 ProTerra Foundation, About us [Website] 3 ProTerra Foundation (2019a) and ProTerra Foundation 7 Kusumaningtyas, R., & van Gelder, J. W. (2019) pp.22,27 (2019c) pp.26-27 8 SLC Agrícola, Our farms [Website] 4 Correspondence with Greenpeace, April 2020. 9 Chain Reaction Research (2020, 17 April) and Chain 5 ProTerra Foundation (2019c) p.57 Reaction Research (2019, 9 May)

82 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 83 Forest and wood product certification schemes • The FSC standards are well known for forest management units and wood sourcing Forest and wood certification schemes requiring FPIC as a fundamental human areas judged to be ‘low risk’. However, right for communities potentially impacted neither the FSC nor any other forest and wood by forest harvesting.7 The FSC has taken product certification scheme requires these important additional measures to recognise maps to be published.13 Forest Stewardship Council (FSC) the importance of Indigenous rights and • Most FSC wood products are traded under the perspectives, including the establishment FSC Mix label, where uncertified ‘controlled of the FSC Indigenous Foundation8 The FSC has a number of strengths, including its multi-stakeholder governance structure wood’ is mixed with FSC certified products.14 and recognition of Indigneous Cultural and strong forest management standards that include respect for Indigenous Peoples’ and Controlled wood is neither fully controlled nor Landscapes (ICLs) as essential to the workers’ rights, an early cut-off date on natural forest conversion, and a prohibition on GMOs. exempt from environmental and social harms, governance of IFLs in some regions.9 It is also the most credible and effective forestry certification scheme, and as one of the first as it uses a risk assessment approach that only schemes it has served as a model for certification more generally. However, the FSC still has • However, the national standards that addresses a few priority topics and has varying a number of serious and even fundamental weaknesses. These include the lack of consistent implement the FSC’s international national approaches to implementation, some protection for IFLs, insufficient transparency (maps of certified and conserved areas are not requirements, and that are the basis of of which are weak.15 The reliance on controlled required to be made publicly available), a heavy reliance on mixing non-certified sources certification audits, provide inconsistent levels wood in FSC Mix products undermines the into labeled products (coupled with weak and inconsistent safeguards against controversial of protection for priority values and weak FSC’s effectiveness as a tool for labelling sources), failure to consistently disassociate from companies associated with deforestation requirements for maintaining and restoring products from responsibly managed forests. and human rights abuses, and insufficient product traceability. Concerns have also been the natural character of forests. For example, • The FSC has spent years developing a raised about the objectivity and independence of audits due to the conflict of interest caused national standards in some priority regions transaction verification tool,16 but rather than by companies contracting directly with certification bodies, leading to weak implementation only partially protect IFLs at low levels.10 being applied across the system worldwide it of the standards. The FSC is an imperfect and inconsistent tool to protect forests and people’s FSC certification is also not structured as a has largely been abandoned 17 and is currently rights, and thus additional due diligence is required to provide an assurance of responsibly • tool to achieve large-scale forest protection.11 used only to conduct spot checks on high-risk sourced wood products. Maps of conservation areas are not required markets, such as China.18 to be disclosed, and most standards do not 3 • While the FSC publishes audit summaries Governance and decision making • The FSC is a Code Compliant member of ISEAL. require permanent protection. Despite a of forest management certificates,19 it does The FSC’s governance system has economic, widely supported General Assembly motion • Standards not make audit reports for Chain of Custody social and environmental membership agreeing to IFL protection, and chamber- • On paper, the FSC has strong international certificates publicly available.20 chambers, with an Indigenous Peoples balanced international indicators for IFL principles, criteria and indicators for chamber added in some regions, and with protection, there is strong resistance to responsible forestry, including provisions measures to balance their weight and implementing these requirements in some that uphold Indigenous Peoples’ and 13 At the FSC General Assembly the economic chamber has influence (thereby limiting the dominance of countries.12 Furthermore, the FSC (like other workers’ rights, protect IFLs and other rejected on multiple occasions a proposal to require maps economic interests on key standards issues).1 forestry schemes) does not have approaches of certified areas to be made public. Source: Rosoman, HCVs and environmental values, set a However, practically speaking – through for landscape-level forest protection. G. (2017, 31 October). The recently launched ‘FSC on strong natural forest conversion cut-off the Map’ is a step in the right direction, but relies greater numbers, resourcing and FSC reliance date of 19944 and prohibit GMOs.5 The Traceability and transparency on ‘geospatial data being voluntarily contributed by on licence fees from economic players – the certificate holders’ or National Initiatives and at the time international FSC requirements also mandate of its launch included contributions from just 40% of economic chamber still has a greater influence. • The FSC is failing in terms of traceability conservation of representative samples of certificate holders (see Worm, L. D. (2019, 5 September) and transparency, which are fundamental and FSC, FSC on the map [Website]). In 2013 the FSC established a Permanent forest ecosystems, that a minimum 10% of • to accountable and responsible sourcing of 14 See FSC, Controlled wood and FSC Mix [Website], and Indigenous Peoples Committee – an advisory each management unit be conserved and that commodities. To be fully credible, it would FSC (2019, 29 April) p.6. unit to the FSC board of directors – to ensure national FSC standards include more specific need to publish digital maps of certified 15 FSC (2017). For examples of controlled wood failures, see the voice of Indigenous Peoples is heard at the rules for logging and forest management.6 Greenpeace (2014a,b,c). 2 16 FSC, Transaction verification [Website] decision-making level. 7 FSC (2012) 17 Earthsight (2020) p.35, FSC (2019, 15 January), FSC. 8 FSC (2020, 2 June) (2020, 24 March). Transaction verification is currently 1 The chambers are further split into ‘global’ North and 9 FSC Canada (2016) only required for certain ‘high-risk product types, species and regions’; see FSC, Transaction verification South sub-chambers (representing high-income and 10 Eg the National Forest Stewardship Standard for Cameroon [Website]. non-high-income countries, and votes are weighted 3 ISEAL Alliance, ISEAL community members [Website] (FSC (2020)). to ensure that both groups have an equal say; see FSC 4 FSC (2015a) p.15 18 FSC (2020, 14 April) (2011a). The FSC also aims to promote gender equality; 11 See eg Conniff, R. (2018, 20 February). 19 FSC, Public certificate search [Website] see FSC (2016, 29 August). 5 FSC (2015a) 12 European Sustainable Tropical Timber Coalition 2 FSC, Indigenous peoples [Website] 6 FSC (2018) pp.36-37,39 (2020, 20 April) 20 Greenpeace (2018d)

84 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 85 Audits research,9 showed that loss of IFLs in the • CBs are contracted and directly paid by the Congo Basin was higher inside FSC certified companies being audited,1 creating a potential concessions than in uncertified concessions. conflict of interest that can undermine the A Greenpeace Russia investigation found independence and objectivity of the audits.2 the FSC was contributing to IFL degradation The FSC can act to correct weak audits when and loss in parts of the country through 10 complaints are received about breaches of labelling and marketing destructive wood. FSC standards or when problems are revealed Earthsight also uncovered evidence of the through accreditation surveillance and scheme certifying illegal wood in Ukraine (see monitoring of CBs or certified operations, but box ‘FSC implementation failure – Alleged this does not happen often.3 greenwashing of illegal timber from Ukraine for IKEA’ on page 46).11 FSC certification • The FSC fee for single and multiple-site Chain has even failed to protect HCVs and other of Custody certificates is calculated based values in some countries with strong on the sites’ aggregated annual sales of FSC institutions and governance, such as Finland.12 products.4 As a result, CB independence is compromised; a negative audit result will lead • The FSC’s lack of full traceability and to reduced sales and thus reduced CB income. transparency makes it difficult for buyers and the public to assess the claims of the Implementation and effectiveness certificate holder. Currently, it’s all too easy • In some regions, when implemented for illegal and unsustainable timber to find effectively, FSC full forest management its way into FSC certified supply chains, (resulting in ‘FSC 100%’ or ‘Pure’ products5) especially for FSC ‘Mix’ products.13 provides stronger forest and rights protection • Greenpeace International was a founding than weaker schemes such as the PEFC and member of FSC International in 1994 but SFI (see box PEFC on page 89). terminated its membership in 2018,14 largely • However, over the past decade investigations because the FSC’s integrity and credibility had by Greenpeace6 and other NGOs have been compromised by weak governance and revealed inconsistent implementation of FSC implementation, in particular with regard principles and criteria globally, and serious to controlled wood and the FSC Mix label. cases of FSC certified companies being However Greenpeace Canada, China, New linked to illegal logging, destruction of IFLs, Zealand, UK and USA are still members.15 violations of community rights, high-level • The FSC’s controlled wood requirements16 corruption and human rights abuses.7 This for non-certified inputs to FSC Mix labeled has particularly been the case in high-risk products remain insufficient (see above), regions where democratic and civil society despite being far more robust than other institutions are weak, corruption is prevalent, © Greenpeace systems’ corresponding requirements. The 1 July 2009 - Russia. Logging road in Dvinsky forest. A and HCVs are not formally protected. For FSC has also proven weak on sanctioning Greenpeace case study on the FSC in Russia shows how the example, a Greenpeace Africa analysis from Dvinsky forest IFL in Arkhangelsk region is being destroyed, companies17 responsible for rights abuses 2017,8 confirmed by subsequent independent despite much of the area being formerly or currently FSC certified.

9 Kleinschroth, F., Garcia, C., & Ghazoul, J. (2019) 1 FSC, Become certified [Website] 10 Greenpeace Russia (2017) and deforestation outside of certified forests, The FSC has also done little to stem the global 2 Hines, A. (2014, 12 September); see also Jennings, S. (2016) • 19 11 Earthsight (2020) despite a policy intended to curb their tide of deforestation. Given the pace of 3 ASI, Assessments & reports [Website] 18 12 Greenpeace (2014a) association with the FSC brand. deforestation and the strength of its drivers, 4 FSC (2019) p.9 13 EIA (2018, 21 February), Earthsight (2020). certifying more forests is unlikely to have a 5 FSC, What it means when you see the FSC labels on a product [Website] 14 Greenpeace (2018, 26 March) significant impact, and additional solutions 6 Eg Greenpeace (2014a,b,c). 15 https://info.fsc.org/membership.php are desperately needed. 7 See eg Earthsight (2020). 16 FSC (2017) licence, as well as its subsidiaries and associated entities. 8 Greenpeace Africa (2017) 17 Any company that holds an FSC certificate or trademark 18 Jong, H. N. (2019, 11 November) 19 Moog, S., Spicer, A., & Böhm, S. (2014)

86 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 87 PROGRAMME FOR THE ENDORSEMENT OF FOREST CERTIFICATION (PEFC)

The PEFC describes itself forests to plantations, do The certification of highly as a ‘global alliance of not consistently recognize controversial forestry national forest certification and protect Indigenous practices has also been an systems’, in part created Peoples’ rights and do not ongoing concern with a to address ‘the specific address certified companies’ number of PEFC-endorsed requirements of small- and controversial practices schemes around the globe. family forest owners’.1 It is outside of certified forests. The Indonesian Forestry dominated by governments Certification Cooperation Some important PEFC- and economic interests, and (IFCC) is weak when it comes endorsed national schemes the governance structures of to the protection of HCV even fall short of the PEFC-endorsed schemes do areas, forest conversion, PEFC’s international not have full and balanced hazardous pesticide use, expectations. For example, representation of economic, respect for Indigenous the standards of the PEFC environmental, social and Peoples’ rights, controls scheme for North America, Indigenous interests.2 over certification bodies, the Sustainable Forestry It is considered a weak international consistency Initiative (SFI), have no and industry-dominated and implementation.5 meaningful prohibitions certification scheme, against forest conversion, especially in comparison do not require FPIC for to the FSC,3 and thus this operations affecting report provides only a Indigenous Peoples’ lands limited assessment. and rights and do not While they have shown meaningfully recognize some gradual improvement, and protect HCVs, rare the PEFC’s international and endangered species standards, to which (including Canada’s endorsed schemes are iconic woodland caribou), meant to conform, remain old growth and other weak and insufficient in environmental values.4 crucial areas. For example, they still do not address IFLs, do not recognize and protect most other HCVs, do not sufficiently 5 See eg Greenpeace Southeast prohibit conversion of Asia (2015, 24 June) and Koalisi Anti Mafia Hutan et al. (2020), which documents extensive 1 PEFC, What is PEFC? [Website], clearance of HCVs and peatland and PEFC, History [Website] in the concession of PEFC- 4 See eg Ford, J., & Jenkins, A. certified PT Adindo Hutan Lestari 2 Ford, J., & Jenkins, A. (Eds) (Eds) (2011), Judge-Lord, D., between 2015 and 2020. The IFCC (2011) p.14, WWF (2015) McDermott, C. L., & Cashore, B. also allows much more recent 3 Clark, M. R., & Kozar, J. S. (2020), Skene, J., & Vinyard, S. conversions than does the FSC, (2011), Gutierrez Garzon, A. R., (2019) p.17 and Smith, M. A., & with a cutoff date of 31 December et al. (2020) Perreault, P. (2017). 2010 (IFCC (2013) p.38). © Ulet Ifansasti / Greenpeace 8 January 2015 - Kalimantan, Indonesia. Recently cleared peatland forest inside a pulpwood concession owned by PT Adindo Hutani Lestari in Sebuku Subdistrict.

88 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 89 THE INDONESIAN TIMBER LEGALITY ASSURANCE SYSTEM (SISTEM VERIFIKASI LEGALITAS KAYU, SVLK)

While any system with continue to play a role as to obtain a certificate of covered by the license8 – timber is possible because In addition to the SVLKʼs standards based only on independent monitors, there sustainable production forest in other words, a licence the origins of timber are not weaknesses in legality existing laws is already is concern that their inputs management (S-PHPL) or issued on the basis of SVLK verified in the field. Recent verification, there are limited, some of the same to government consultation timber legality certificate verification is considered research by the Anti Mafia failures in illegal logging shortcomings of voluntary on the reform of the scheme (S-LK) to ensure that all evidence of compliance with Forest Coalition/Koalisi Anti law enforcement, with only schemes also limit the were ignored.3 Timber legality timber harvested, processed, EU law.9 Mafia Hutan and other NGOs a handful of prosecutions confirms that the verification out of over 50 identified functioning and reliability assurance systems commonly transported and traded in But how effective is that 6 system cannot guarantee the cases in 2018–2020 of of public mandatory rely on government agents Indonesia was legal. The VPA verification at ensuring the legality of forest products, let companies trading in illegal verification systems such to verify the legal origin on Forest Law Enforcement, legality and sustainability alone their sustainability – timber.15 In one shocking as Indonesiaʼs SVLK. The of each timber shipment Governance, and Trade (VPA- of Indonesian timber? their 2020 report ‘Sustaining case, Indonesia’s Supreme SVLK is used to assess the through a traceability control FLEGT) was signed in 2013, After four years of FLEGT Deforestation’ documents Court even returned $1.6 compliance of Indonesian system, but Indonesia’s and in 2014 Indonesia ratified licensing and a decade of evidence of recent natural million worth of illegally timber with domestic SVLK outsources this task the agreement through SVLK implementation, forest conversion inside a acquired timber to a trader laws and is therefore a key to accredited independent Presidential Regulation No. the evidence suggests concession in East Kalimantan who had been convicted element of the Indonesia– private verification bodies. 21/2014. This opened the that while the scheme has owned by a company that and issued with a fine and EU Voluntary Partnership In the SVLK all operators possibility for Indonesian contributed to improving the holds a PHPL certificate.12 a jail sentence.16 Agreement (VPA) – a legally throughout the supply timber and timber products administration of Indonesian The Independent Forest binding trade agreement chain are audited to ensure to enter the EU market as forests and the beginnings In summary, largely as a Monitoring Network (JPIK) that aims to ensure only compliance, and a legality FLEGT-licensed timber, of a traceability system, it result of weak governance, has also found evidence of legal timber and timber license is issued at the which is automatically has had limited impact on requirements and 4 a number of failures,13 and products from Indonesia point of export. considered legal under the tackling illegal logging.10 enforcement, the SVLK is not reach the EU market.1 terms of the EU Timber several companies whose The SVLK was launched in yet up to the task of ensuring Regulation (EUTR) that came A December 2018 Tempo concessions burned between The SVLK scheme was 2009, with a Ministry of legal compliance and into force in March 2013.7 report titled ‘Illicit Timber 2015 and 2019 are certified initiated in response to the Forestry Regulation5 stating stopping deforestation. For Laundering Machine’11 under the SVLK scheme.14 the government, it appears recommendations of the 2001 that it was mandatory In November 2016 Indonesia provided evidence of the that the system is more Bali Declaration on tackling for all timber producers became the first country in manipulation of the timber about trade diplomacy than illegal logging, with input and timber processors the world eligible to issue verification process in Papua. 12 Koalisi Anti Mafia Hutan et al. real improvements in forest from government, NGOs and FLEGT licenses for exports According to the investigation, (2020) 2 governance in Indonesia. the private sector. While to the EU. A FLEGT licence the ‘laundering’ of illegal 13 JPIK (2020) 3 See eg Meridian, A. H., et al. civil society organisations effectively means operators 14 For example, many Asia Pulp and (2018). in the EU do not need to Paper (APP) concessions, all of 8 EU FLEGT Facility, FLEGT 4 Luttrell, C., & Fripp, E. (2015) exercise due diligence on which are SVLK verified (see APP, 1 See EU FLEGT Facility, pp4-5 licensing: Lessons from Sustainability report 2019: About Background: The Indonesia– imports of timber products Indonesia’s experience [Website] 5 Regulation No. P.38/Menhut- us [Website]), have had fires in EU Voluntary Partnership II/2009. This regulation has 9 EU FLEGT Facility, SVLK – them between 2015 and 2019. See Agreement [Website]. since been revised several times; Indonesia’s timber legality eg Greenpeace Southeast Asia 2 EU FLEGT Facility, Background: the current version is Ministry assurance system [Website] (2019, 24 September), Greenpeace 6 Lubis, M., et al. (2018) p.1939 Southeast Asia (2020), Greenpeace The Indonesia–EU Voluntary of Environment and Forestry 10 Jong, H. N. (2020, 26 March) 15 EIA & Kaoem Telapak (2021) Partnership Agreement Regulation No. P.21/MENLHK/ 7 EU FLEGT Facility (2013, 3 Southeast Asia (2020, 15 July) and [Website], Lubis, M., et al. (2018) SETJEN/KUM.1/10/2020. October). 11 Tempo (2018, 24 December) Wright, S. (2017). 16 EIA & Kaoem Telapak (2021) p.22

90 Chapter 3: Analysis of the major certification schemes Greenpeace International - Destruction: Certified 91 INTRODUCTION

Chapter 4: Conclusions and the way forward: Forest protection goes beyond certification

CHAPTER 4: Rather than being an effective forest protection tool, certification schemes end up CONCLUSIONS greenwashing products linked to deforestation, ecosystem destruction and rights abuses. Chapter4: Conclusions and the way forward: Forest protection goes beyond certification AND THE WAY FORWARD: FOREST PROTECTION GOES BEYOND CERTIFICATION

92 © Paul Hilton / Greenpeace 93 13 August 2013 - Indonesia. Cassowary. Conclusion: The way forward: Certification – A greenwashing tool? The role of certification

A key aim of the certification schemes discussed Certification has done much to cultivate the in this report, and others of their kind, is to image that ‘green’ labelled commodities are CERTIFICATION – A LIMITED ROLE IN CERTIFICATION – NO SUBSTITUTE FOR remove environmental destruction (including ‘sustainable’. But instead of guaranteeing HALTING ECOSYSTEM DESTRUCTION ROBUST LAW AND GOVERNANCE deforestation) and social harms from the that deforestation and other harms are The weaknesses and flaws identified in the Governments and legislators must not accept production of commodities and their supply excluded from supply chains, certification certification schemes assessed in this report certification schemes as a way to demonstrate chains. Yet the analysis in this report shows with inadequate governance, standards and/or make clear that certification should not be compliance with legal requirements related that certification is a weak tool to address global enforcement enables destructive businesses to relied on to deliver change in the commodity to the protection of forests, ecosystems and forest and ecosystem destruction. It cannot continue operating as usual. More broadly, by sector. At best, it has a limited role to play as a human rights. Considering all the limitations and is not designed to address the problem of improving the image of forest and ecosystem supplement to more comprehensive and binding of certification schemes and their issues growth in supply of and demand for commodities risk commodities and so stimulating demand, measures, and it should neither carry legal force with regard to effectiveness and credibility, that is driving this loss. Furthermore, it cannot certification risks actually increasing the as proof of compliance with those measures as highlighted in this report, it is clear that avoid ‘leakage’, where certification of some harm caused by the expansion of commodity nor absolve the certificate holder of liability for relying on certificates as proof of compliance commodities, producers and areas leads to production. Instead of being an effective forest non-compliance. With reforms, including strong with legal requirements addressing ecosystem deforestation and ecosystem destruction being protection tool, certification schemes thus end up standards and full transparency, certification destruction and social harms would jeopardise displaced to other countries, regions or biomes. greenwashing products linked to deforestation, can potentially help lift environmental and social the effectiveness of the legislation in question. ecosystem destruction and rights abuses. Strong environmental and social standards performance on the ground – but it is imperative Embedding certification schemes into regulatory developed through multi-stakeholder processes Although certification was initially conceived that we develop realistic expectations about frameworks would also shift responsibility for have a wide range of potential applications, as a potential solution to these problems, three the applications it can have and under what ensuring compliance with legal requirements including in regulations. But while some decades of experience show that attempts to conditions it can be effective. from governmental authorities to third-party auditors, thereby weakening the enforcement of certification schemes do have strong standards, address the various design and implementation It is also important to recognise and assess the such requirements. Furthermore, there would problems with implementation combined with flaws have largely failed. Certification can play a differences between certification schemes, be no clear gains in terms of administrative a lack of transparency and product traceability role in excluding products linked to deforestation, which, as this report has shown, vary in terms efficiency, given that governments would mean even these have major failings. Thus, forest degradation, ecosystem conversion and of governance, standards, transparency, still have to introduce and manage a whereas certain schemes may have a localised associated human rights abuses from supply implementation and effectiveness. For example, 1 complex layer of procedures to assess and positive impact, such as strong individual country chains – but it requires many reforms (see box on there is considerable difference between accept certification schemes. or local application, the inherent limitations of page 96). Moreover, the focus on certification is PEFC/SFI certification and FSC certification the certification model and the flaws in their distracting from and delaying the implementation for wood produced in Canada; while there is Instead, a sound regulatory approach must design and implementation mean that none of of a comprehensive and integrated set of solutions room for improvement in the FSC system, be based on the requirement for companies to these schemes are able to live up to their promise. including robust laws and regulations, and FSC certified forests and 100% FSC certified provide, under their own responsibility, reliable hindering the transformation of commodity Although certification has been proposed by some products do provide important forest, wildlife and verifiable evidence that their supply chains production systems away from a model that relies as a useful surrogate for good land use governance and Indigenous rights protections, whereas SFI and products are free of deforestation, ecosystem on continued expansion into natural ecosystems. and commodity regulation, it has not succeeded certification cannot be considered anything conversion, degradation of forests and other in producing the profound reforms needed in more than a greenwash. ecosystems and human rights violations. commodity production and consumption. Far too For certification to play any role in cleaning up many certified companies continue to be linked to supply chains and be considered fit for purpose, forest and ecosystem destruction, land disputes certification schemes first require fundamental and human rights abuses. reform, as outlined in the box on page 96.

1 See eg IPBES (2019) pp.44-45,55,87

94 Chapter 4: Conclusions and the way forward: Forest protection goes beyond certification Greenpeace International - Destruction: Certified 95 FUNDAMENTAL REFORM IS NEEDED BEFORE CERTIFICATION CAN PLAY EVEN A LIMITED ROLE

Certification schemes Certification standards • Protection of HCVs, HCS those linked by ownership, the satisfactory performance • Publishing audit reports have a potential role to should include at a forests, conservation management and/or other of assessments and audits. and clearly indicating any play – as argued above minimum provisions for all areas and IFLs forms of control, regardless To improve the objectivity non-compliances with – as a supplement to of the following: of whether there is a formal of audits some parts should the standard more comprehensive and • Adapted provisions parent/subsidiary structure. be digitalised, for example Full respect of binding ‘sustainability’ and • to support small by making use of remote Applying and enforcing Schemes must at a minimum • responsible trade measures Indigenous People’s farmer/smallholder sensing data. To ensure their appropriate penalties and require a comprehensive implemented by the rights and livelihoods, integrity, recommended implementation (unbroken) traceability compensation payments for governments of both producer and labour rights measures include: More broadly, to support system for certified products significant and/or recurring and consumer countries (see Prohibition of direct and efforts to address the multiple from farm to consumer. Going Rotation of CBs and auditors non-compliances below). But to be fit for even • • indirect deforestation pressures on biodiversity further, actors at all stages this purpose, they require • Having the certification Implementation is key; strong (including conversion and ecosystem health, of the supply chain must be rules regarding breaches fundamental reform. fee be held in an escrow to plantations), certification should require certified with transparent of these conditions must A starting point would be reporting of transactions, account and withheld until forest degradation ecological production, be immediately enforced. to ensure that the schemes’ including prohibiting the use and volumes tracked to the assessment report has and conversion and Considering the scope of the governance bodies have a of chemical pesticides and ensure an uncompromised been validated changes that would be needed degradation of other 2 majority of representatives fertilisers or GMOs. chain of custody. for effective reform, and the of social and environmental natural ecosystems, • A tender process after Certification schemes The certification assessment fact that considerable attempts interests – including including, but not which a third party decides should also require full system must be transformed have been made to address Indigenous and local limited to, peatlands on the CB for a client transparency, including to ensure integrity and some of these issues for years communities – so that Establishment of strong maps of certified areas credibility, and in particular to Flat fee audits, or free with only limited success, the decisions are made in the • • (including conservation address the inherent conflict audits funded by levies or question remains as to whether interests of people and the (early) natural ecosystem areas) and details on of interest between the CB the system is reformable. planet, rather than profits.1 conversion cut-off dates other means the ultimate ownership doing the auditing and its Thus, the recommendation • Restoration and of certified companies. clients. A new structure is • Strengthening of the remains that certification can 1 This is of course without prejudice remediation requirements Moreover, all of a scheme’s needed that acts as a ‘firewall’ auditor registration at best only serve as a useful to the availability of other for deforestation/ requirements should be between the two parties, requirements and supplement to comprehensive avenues and means of redress by and binding measures, stakeholders, such as civil liability ecosystem conversion enforced across the whole preventing the direct payment training processes provided that the reliability claims in consumer and producer prior to the cut-off dates, of each corporate group’s of funds, impartially selecting countries, accountability the best qualified CBs to do and credibility of a scheme has as well as restitution of operations, including mechanisms prescribed by law assessments and verifying been duly assessed. and actions before international social harms jurisdictions. 2 Greenpeace (2015)

96 Chapter 4: Conclusions and the way forward: Forest protection goes beyond certification Greenpeace International - Destruction: Certified 97 The way forward: The role of governments and companies in cleaning up supply chains

An adequate response to ecosystem destruction sold only if they meet strict sustainability and and associated human rights abuses in supply human rights criteria. Such laws should prevent chains requires governments in both producer the placing on the market of commodities and and consumer countries to take responsibility derived products linked to forest and ecosystem to protect people and nature, and requires destruction or degradation or violation of related companies to fully act within those regulatory human rights. To this end, legislation must make frameworks to clean up their supply chains. companies sourcing FERCs and derived products responsible for ensuring that products meet the PRODUCER COUNTRY prescribed criteria, by means of due diligence and GOVERNMENTS’ ROLE measures to ensure full supply chain traceability and transparency (public disclosure). Governments in producer countries must enact comprehensive legislation (if it does Legislation should also include rules on due not already exist) to protect forests and other diligence for financial institutions to ensure natural habitats from destruction or degradation. that they are neither directly nor indirectly Legislation should also include the obligation for linked to or financially supporting forest producers, traders and consumer companies to and ecosystem destruction or degradation or achieve complete supply chain transparency and human rights violations. traceability and safeguard Indigenous and local Crucially, governments should cooperate communities’ and workers’ rights, with penalties internationally to ensure that new laws sufficient to act as a genuine deterrent. Particular regulating the trade in and financing of FERCs support should be given to small farmers to assist are adopted in a broad number of countries, and incentivise them to meet environmental and to guarantee their compliance with strong and social standards. Governments must also environmental and social standards. This will invest in adequate monitoring and enforcement maximise the impact of such initiatives and © Christian Åslund / Greenpeace of compliance with this legislation. Independent minimise the availability of alternative markets 3 October 2016 - Sweden. Fiby Urskog Nature Reserve. verification of compliance should be possible, for environmentally and socially harmful supported by governments publishing details of commodities and products (thereby preventing producers in their territory, including maps of all ‘leakage’, as explained in Chapter 1). farms, concessions or other forms of corporate COMPANIES’ ROLE Finally, companies need to go beyond simply Cooperation between consumer and producer land tenure, as well as group-level ownership removing deforestation from their supply countries is also necessary in order to improve Companies must begin by immediately requiring information. As well as complying with such chains to actively carrying out, supporting governance and foster the adoption of and implementing strong environmental and laws, corporate groups should invest in and financing forest and natural ecosystem responsible, ecological production methods social standards for commodity production, responsible production methods that bring protection and restoration, in collaboration with and effective restoration and remediation setting up traceability and transparency systems opportunities and benefits to local communities. local governments and local and Indigenous practices. Special attention should be paid to for all commodities, enabling them to identify communities. CONSUMER COUNTRY the position of smallholders and communities all traders, producer and corporate groups and whose livelihoods depend on forests and third-party suppliers in their supply chains. GOVERNMENTS’ ROLE other ecosystems, with consumer governments They should also proactively monitor their Governments and, where applicable, regional putting in place targeted and inclusive measures, supply chains to ensure that all suppliers comply jurisdictions such as the EU must adopt laws trade and aid partnerships, and programmes with strong environmental and social standards regulating domestic markets for commodities to support smallholders and communities and policies and, when in place, robust regional and derived products entailing a risk for forests in producer countries. or national legislation. and ecosystems, to ensure that they can be

98 Chapter 4: Conclusions and the way forward: Forest protection goes beyond certification Greenpeace International - Destruction: Certified 99 The way forward: Moving beyond supply chains

Removing deforestation and other harms from Policies and measures for ensuring responsible specific supply chains is an important element of supply chains must be combined with efforts to any strategy aimed at protecting the environment reduce the consumption of certain commodities and human rights. However, in order to meet the and products, addressing the issue of growth as demands of social justice and address the climate, well as just distribution. Government policies biodiversity and health crises, comprehensive and and changes to business models must seek to well-structured strategies are needed. ease pressure on land use by a 50% reduction in global meat and dairy consumption by Such changes must start with countries 2050 (with a 70% reduction by 2030 in high- working together to develop and implement consuming regions).5 More broadly, these action plans that favour people, the planet and policies and business models must contribute biodiversity, with the goal of rapidly halting to a transformation of the current capitalist and reversing the loss and degradation of all paradigm fixated on GDP growth into a socio- natural ecosystems and limiting the global economic system that inherently respects the temperature rise this century to a maximum boundaries of nature and supports social justice of 1.5°C. These plans should include rights- and democratic engagement. based, legal protection1 of at least 30% of land by 2030,2 representing all ecoregions, along Trade policies should mirror and support the with restoration of at least 500 million ha of production and consumption objectives set to natural forests3 and all degraded peatlands4 serve people and the planet. In many cases, by 2030. For these protection plans to be relocalising production and consumption supply effective, recognising, respecting and defending chains can provide such support. Where it makes Indigenous Peoples’ and local communities’ ecological sense, relocalised supply chains can right to customary lands and their self- increase social accountability of producers determination – including self-government, towards both their employees and consumers, Indigenous law and cultural heritage – is a key and can strengthen community ties. Diversified requirement. supply chains are also more resilient than the just-in-time system we currently have. 1 In line with IUCN categories I–VI (see IUCN, Protected area Fiscal policies (including a polluter-pays categories [Website]). Notably, an absence of industrial activities and minimum of human influence beyond approach) and reform of the financial system traditional natural resource activities of Indigenous and should aim to shift the trillions of dollars a year local communities. currently spent on perverse subsidies for fossil 2 In some regions, higher levels of protection may be fuels6 and destructive agriculture7 – as well as necessary – in particular where tipping points would private investment in these – into clean energy, potentially be passed when only 30% was protected (eg in the Amazon) or where there are HCV or HCS values in more ecological food systems and rights-based nature than 30% of the ecoregion. In some ecoregions, achieving conservation and restoration. long-term ecosystem stability will also require ecosystem restoration. 3 See eg Houghton, R. A., Nassikas, A., & Byers, B. (2015) and Griscom, B. W., et al. (2017), Table S1, p.7. 4 Degraded peatlands have been drained or had their water flow altered but have not been completely converted to other land uses, and can be rehabilitated by restoring the 5 Greenpeace (2018c) pp.14-15 © Valdemir Cunha / Greenpeace natural flow of water. Those are estimated to cover around 23 February 2016 - Pará, Brazil. Achiote (Bixa orellana) fruit. 6 Coady, D., et al. (2017) 46 million ha. See Nature4Climate, Peatland restoration [Website]. 7 Food and Land Use Coalition (2019)

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