In July, a number of environmental commentators talked about the state of certification in the palm oil market. Scott Poynton of The Forest Trust said parts of the industry – including his own organisation – are moving ‘beyond certification’.
Specifically, Poynton said: “The [top reasons the commodity supply chains need to move beyond certification] is that [first] the standards are too weak and have fallen behind the pace of innovation and best practice in the field. The second is that certification stifles innovation and introspection.”
But Poynton – and many other green-oriented organisations – fail to appreciate what palm oil certification in its genuine form is actually about. The benchmark that he and groups like Greenpeace use is certification by the Roundtable for Sustainable Palm Oil (RSPO). The model for this was Forest Stewardship Council (FSC) certification for sustainable wood products.
But the model that these systems attempt to imitate – and the word is used deliberately – involves technical standards, particularly in relation to quality management systems. These standards are supposed to set norms with regard to processes; and they are supposed to provide a basis against which performance can be measured.
Standards and quality management
The technical underpinnings of standards have been well established through bodies such as the International Organisation for Standardisation (ISO). It has established standards for environmental management systems in the form of ISO14000.
This standard is effectively a methodology that organisations can use to measure their environmental impact, and then subsequently, determine ways to minimise that impact. But the standard only involves the measurement, not the target.
And this is where Poynton, his colleagues and most of the environmental movement actually depart from the rest of the world when it comes to standards and quality management: the standards are supposed to provide a way to set the benchmarks; the performance improvements come from innovations developed by the firms themselves. The innovations – not the standards – minimise the costs and the impacts and produce a higher quality product.
Misplaced aim of green certification
Green certification – such as that of the RSPO and FSC – has stood apart from standards from Day One. The objective was to set the targets, not measure the performance.
Consequently much of the infighting and politicisation that is now a regular feature of the policy debate around such certification is whether certain targets are being met, and whether the certification body can in fact assist in the meeting of these targets.
No technical standard for quality management systems operates in this way. The technical standard is and should be neutral, as is the body that develops it, and the body that assesses whether firms conform to it.
This is the way that national certification schemes work, including the Malaysian Sustainable Palm Oil (MSPO) standard. This is the way that national standards for forestry work.
But unsurprisingly in this context, there are basically no international standards for agriculture. The only international certifications that exist are those proposed by environmental groups or other NGOs. The breadth of specific variables are difficult enough at the national level; they are close to impossible at the international level.
Interestingly, Brazil and Germany have proposed an international standard for chain-of-custody systems for forest products. This will provide an open, international standard for companies to implement traceability systems. There will be no politicised organisations such as FSC involved in the process.
Why is this significant? Because purchasers of timber products will be able to see clearly where their products are coming from, with independent verification. Those purchasers can then judge the performance of the operations themselves. If those timber producers want to improve their performance, they can simply do it through innovating.
The MSPO sets a similar benchmark. The firms utilising it can choose to meet that benchmark and then improve their performance – and they will do this through innovation.
Innovation is the territory of firms, not standards organisations. This whole episode underlines the problems that arise when people expect certification to be responsible for driving change and setting targets, rather than simply measuring impacts.