Palm Oil Audit for Assessing Environmental and Social Aspects of Sustainable DevelopmentPalm oil audit of the environmental and social impacts of palm oil production and the assessment of sustainable development have been around for many years - they were simply known by a different name! The Roundtable on Sustainable Palm Oil (RSPO) process since 2003 has brought palm oil into the global spotlight and greater focus on the environmental and social issues associated with palm oil development and production. This has led to greater self-examination by palm oil producers as well as external scrutiny by other members of the supply chain. This brief report outlines the background to the role of palm oil audit in assessing the environmental and social performance of palm oil producers and guiding their progress towards implementing sustainable palm oil. When we first started palm oil audit at a plantation and processing mill in Papua New Guinea in 1993, there was no environmental code of practice or industry standard against which to compare or benchmark environmental performance. We therefore adopted the same environmental management principles that we had applied to audit of other industries such as mining and manufacturing: legal compliance, environmental and social impact assessment, efficient use of resources, responsible waste management, conservation of natural resources, monitoring and reporting of performance. The name for the report that we produced was an "Environmental Management Audit". In the early 1990s most plantation companies did not have either an environmental or a health and safety policy, let alone an environmental or a health and safety manager. The main focus of companies at that time was getting agricultural development and production underway, generating cash flow and being profitable. Although environmental and social considerations took a back seat to agricultural production, the more progressive companies implemented good agricultural practices that generally were environment friendly and consistent with sustainable development principles. In order to evaluate resource use efficiency and to compare performance between different plantation companies, we recognised the need for benchmarking. We derived a set of basic indicators by considering process inputs and outputs. In evaluating plantation impacts during palm oil audit, we used indicators such as: Crop Yield (t FFB/ha); Fertiliser Usage (kg N/t FFB, kg P/t FFB, kg K/t FFB); Non-renewable energy (fuel l/t FFB); Labour (man-days/t FFB); Soil Erosion Potential (area of roads as % of total land lease area); Conservation (reserve areas as % of total land lease area). The milling process has potential for significant impacts and indicators included: Efficiency (%Oil Extraction Rate; % Oil Loss to Effluent); Product Quality (Oil FFA Content); Water Usage (t/t FFB); Non-renewable energy (% of energy produced from biofuel; diesel fuel l/t FFB); Water Conservation (% of mill effluent re-used or recycled); Pollution (Average BOD loading of mill effluent discharge) and Waste Recycling (% of EFB recycled as mulch). At that time incineration was still used as a method of EFB disposal! In general, accident statistics were not recorded and it was not possible to gauge safety performance, other than make a qualitative assessment and comment on obvious hazards and the need to issue PPE to staff and employees. We assessed social performance by visiting local communities and conducting informal interviews. This provided feedback on whether they had any grievances, what benefits they thought they had gained from oil palm as well as the disadvantages and negative impacts. The palm oil audit process identified situations with unacceptable negative impacts, which were highlighted and we included in the audit report an Environmental Improvement Plan with specific recommendations and assignment of priorities. The development of an international standard for Environmental Management Systems was accompanied by the issue of guidelines on audit principles and procedures (ISO, 1996). This was equivalent to a code of practice for environmental auditors and provided useful information for a structured approach and improving the rigour of the audit process. We have adopted and applied these standards to our palm oil audit since 1996. These guidelines (to see Details of ISO 14000 Standards, click here)were revised in 2003 and combined with principles for environmental and quality management systems auditing. In the late 1990s the World Bank and International Finance Corporation published guidelines for plantation crops and processing (IFC, 1998) that provided a basis for evaluating environmental and social performance. We developed detailed environmental and social audit protocols and used these to supplement the numerical indicators we had been using. At that time we modified the audit report to include a “Sustainability Matrix”, that compared the practices of the auditee with “Best Practice Environmental Management” We continued with the original Improvement Plan, which provides valuable information for our clients and that we still use to this day. More recently, clients are interested to know how their performance compares with the requirements of the RSPO Principles and Criteria. In order to meet this requirement, we make an initial assessment using the recently released NBPOL-RSPO Self Assessment Tool. This provides information on the progress made by a palm oil producer towards the “entry level” requirements for achieving RSPO Sustainable Palm Oil. When the “entry level” requirements are met, then the next step will be to consider an RSPO Verification Audit. The RSPO Verification System is presently being developed and we are actively contributing as a member of the RSPO Verification Working Group. International financiers, particularly those based in Europe have been targeted by environment and social NGOs in relation to their investments in palm oil projects in developing countries, such as Indonesia where there is rapid expansion. We have carried out due diligence environmental and social audits of properties in their portfolios as well as potential investment properties for financiers. For these audits, we use a protocol that is based on the national legislation of the country where the property is located and the recently revised World Bank/IFC Environmental and Social performance Standards (IFC, 2006). For the fieldwork component of palm oil audit, we engage a National Ecologist and a National Sociologist to collect information in their specialised fields. These scientists are fluent in the local language as well as English. Charlie Ross, who is registered as a Lead Auditor with RABQSA International, leads the audit team. The audit team leader has 15 years experience in palm oil environmental management and the ecologist and sociologist bring technical depth to the two areas of greatest NGO concern. This well-balanced audit team provides the auditee with independent, expert advice on the existing, as well as potential future environmental and social risks. We add value to the palm oil audit process by supplying an environmental and social improvement plan to the palm oil producer for guiding them towards implementing Sustainable Palm Oil. If you would like to find out more information on Palm Oil Audit, please Contact Charlie Ross
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