Ethical Performance
inside intelligence for responsible business


palm oil sector addresses social obligations

February 2006

Social impacts of the palm oil industry have been given equal prominence with environmental problems in a set of principles for the sector agreed by dozens of companies around the world.

The eight principles signed off by the Roundtable on Sustainable Palm Oil – a group of 110 organizations formed to promote the sustainable use of palm oil – seek to address well documented concerns about deforestation, soil erosion, land clearance and pesticide use on oil palm plantations.

They also cover good practice in respect of indigenous peoples’ land rights and labour standards, including child labour.

Among other things, members of RSPO, who include growers and processors, consumer goods manufacturers, retailers and investors, are now expected to:

implement management plans for plantations, and the areas around them, ‘that aim to achieve long-term economic viability’
carry out social impact assessments prior to establishing or expanding plantations
have ‘open consultation’ with indigenous people, growers, communities and other interested parties.

Additionally, the principles require employers to allow workers on plantations to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining is restricted under law, employers must help set up ‘parallel means of independent and free association’.

Asda, Boots Group, Neste Oil Corporation, Northern Foods and RWE npower, among others, have recently joined RSPO, whose members account for a third of world palm oil production.

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