Palm oil major quits no-deforestation initiative HCSA: A commitment to efficiency or a ‘dangerous sign of backsliding’?
In January 2023, one of the world’s largest palm oil producers announced it was giving up membership of the High Carbon Stocks Approach (HCSA) ‘No Deforestation’ initiative.
The decision has received significant criticism from environmental campaigners, with Greenpeace describing the move ‘a dangerous sign of backsliding’. “Golden Agri-Resources’ exit from HCSA signals clearly the further weakening of its commitment to NDPE – No Deforestation, No Peatland and No Exploitation,” said Grant Rosoman, senior campaign advisor to Greenpeace International.
But GAR strongly refutes any suggestion the decision weakens its commitment to eliminating environmental violations from its palm oil supply chain. “GAR has ended its membership of the organisation. It has not ended its support for the methodology,” Anita Neville, chief sustainability and communications officer at GAR, tells FoodNavigator.
‘We question whether GAR is serious about No Deforestation’
The global food industry is a major driver of deforestation in biodiverse regions. In Europe, soy, palm oil and beef commodity imports are amongst the most linked to tropical deforestation, followed by cocoa and coffee.
The amount of carbon and biodiversity stored within an area of land varies according to the type of vegetative cover. To distinguish forest areas for protection from degraded lands with low carbon, social and biodiversity values, a methodology was developed by a group of public-private stakeholders. The High Carbon Stock Approach (HCSA) was established in 2014.
The methodology aims to ensure there is a practical, transparent, and scientifically credible approach to implementing commitments to halt deforestation in the tropics, which ensuring the rights and livelihoods of local peoples are respected.
Singapore-headquartered GAR was amongst HCSA’s founding members, alongside NGOs, technical support organisations, and other private sector companies working in palm oil and pulp.
Since joining HCSA means committing to the HCSA Toolkit, which defines the methodology for putting No Deforestation into practice on the ground, Greenpeace suggests renouncing membership has implications for GAR’s commitment to these principles.
“We question now whether GAR is serious about implementing its No Deforestation commitments and contributing to the reform of the palm oil sector,” said Rosoman.
GAR’s HCSA decision ‘not taken lightly’
GAR has rebutted Greenpeace’s suggestions that dropping HCSA membership has implications for its commitment to tackling deforestation and other environmental violations.
“The decision not to renew our membership was not taken lightly,” GAR’s Neville told this publication. But the palm oil company believes HCSA has ‘shifted its focus’ in recent years, leading to a ‘significant’ overlap with palm oil certification scheme Roundtable on Sustainable Palm Oil (RSPO).
In reassessing the value HCSA provides, GAR decided to quit the organisation. “We believe that our membership and participation initiatives including RSPO and NDPE Implementing Reporting Network, as well as the commitments in our Social and Environmental Policy, ensure we are accountable to upholding HCSA methodology across our supply chain.
“Membership of HCSA secretariat no longer provides additional value above these existing commitments. To truly tackle deforestation, we should focus on doubling down on what’s working, rather than duplicating or replicating efforts.”
GAR makes the distinction between HCSA membership and support for its methodology. The palm oil company contributed to HCSA’s development because it was, and remains, committed to protecting tropical forests and removing deforestation from its supply chain, we were told.
“As a founding member of the HCSA secretariat and a champion for the HCSA toolkit that the organisation has developed, it’s important to be clear on this point: GAR has ended its membership of the organisation. It has not ended its support for the methodology.”
What happened in Liberia?
One reason Greenpeace queries GAR’s commitment to reform of the palm oil sector relates to a 2018 raised by HCSA against Golden Veroleum Liberia (GVL), in which GAR is invested via private equity fund the Verdant Fund.
“Greenpeace collaborated with GAR to develop the HCSA toolkit in 2011 but ended the collaboration after GAR breached HCSA requirements by clearing around 1000 hectares of forest in Liberia, and its general slowing of implementation and lack of transparency” said Greenpeace’s Rosoman.
The environmental campaigner is concerned that by stepping back, GAR will not follow through with the agreed forest restoration and social remediation in Liberia for deforestation and not ensuring Free, Prior and Informed Consent (FPIC) in its operations there.
Comments questioning GAR’s seriousness in implementing its No Deforestation commitments are baseless, according to the company’s sustainability and communications officer. Greenpeace’s suggestions are ‘disingenuous at best’, and ‘cynical campaigning at worst’.
Following the complaint, GVL immediately acknowledged the HCS clearance and has worked closely with HCSA to validate the detail of these claims with support from an independent third party, Neville explained.
“GAR has been supporting GVL to cooperate with the HCSA investigation, and GVL has already begun implementing HCSA’s remediation measures, which are in line with industry accepted standards, including quarterly progress reports which are verified by a third party.
“As regrettable as the 2018 clearance was, GVL are committed to an outcome that will deliver a net benefit from a social and environmental perspective.”
The company stressed it is ‘fully committed’ to eradicating deforestation from its supply chain, which it backs up with numbers: the company has achieved 98% traceability to plantation so far, has mapped 120,000 independent smallholders in Indonesia, has conserved 79,000 Ha of HCV and HCS areas, and is supporting its suppliers in conserving 117,000 Ha of HCV and HCS areas.
“We take our role in supporting sustainable palm oil serious and stand by our record.”
Giving up HCSA membership: a growing trend?
GAR is not the first palm oil company to exit HCSA over the nine years since its inception. Palm oil majors Sime Darby, IOI, and Wilmar International have all renounced their memberships, the latter citing ‘governance’ concerns.
With now four former-member palm oil companies off HCSA’s books, FoodNavigator queried why renouncing membership might be becoming a trend.
“I can’t speak for others, but I do think that the urgent need to support activities that enable pathways to 1.5c and deliver against growing stakeholder expectation is forcing companies to focus on where they can maximise their resources, be those financial or operational, to meet or ideally exceed these expectations,” said GAR’s Neville.
“Reviewing the purpose and impact of associations and memberships is simply part of this process.”