Terms of Reference for Consultant Support of the Grower Incentives Task Force (GITF) for the Implementation of Resolution GA21-2d

Introduction

On 13 November 2024, the RSPO General Assembly approved Resolution GA21-2D “develop a mechanism to incentivise medium-sized growers and smallholders” (see Annex 1) with 82.19% for, 15.51% against, and 2.30% abstained votes. WWF-Malaysia, Yayasan Lembaga Penelitian Kaleka Indonesia (Kaleka), Sawit Kinabalu Sdn. Bhd were the proponents of the resolution. In the resolution, the proponents explain their work on Jurisdictional Certification approach in Sabah and found reluctance among medium-sized growers and smallholders to pursue RSPO Principles and Criteria (P&C) Certification, contributing to the stagnant RSPO Certification in Sabah. There may be similar challenges in other regions. The proponents explain that better incentives for medium-sized growers and smallholders will enhance participation and support for RSPO Certification. 

Consultant

The RSPO Secretariat is seeking a consultant to support the new Grower Incentives Task Force (GITF). The consultant will conduct interviews with GITF members and other relevant stakeholders, encourage the GITF to develop a broad range of strategies to support medium-sized growers and independent smallholders, and review existing incentives for smallholders, such as RSPO Independent Smallholder Credits, while exploring ways to enhance them.

Additionally, the consultant will assess other financial incentives linked to markets, access to finance, carbon credits, regulatory frameworks, policy interventions, administrative support, and non-market-based tools. Other considerations should include supporting group certification to reduce costs, assisting growers with registration, and lowering RSPO Membership fees.

Task Force

Please see the ToR for the GITF here.

Budget

The consultant is expected to plan and organise the monthly GITF meetings, conduct interviews, evaluate existing mechanisms and together with the GITF come up with a wide range of new strategies.

Deliverables

A validated mechanism to incentivise medium-sized growers and independent smallholders, incorporating both financial and non-financial benefits. This mechanism can be a wide range of strategy recommendations for medium-sized growers and independent smallholder support.

It is important to note that the strategies should be developed to enhance the existing RSPO tools and systems, the existing RSPO Standards; 2019 & 2024 Independent Smallholder Standard, RSPO Smallholder Strategy 2017, RSPO Jurisdictional approach, Shared Responsibility and existing market mechanisms (ISH Credit and certified FFB trade) but can also be developed in a way that it can entirely be managed by external parties (i.e. growers themselves, financial institutions, buyers, etc.).

Timeline

The GITF should deliver on the ToR by the next General Assembly in November 2025. The GITF will be retired after successful completion of the work.

Oversight

RSPO Secretariat:

Inke van der Sluijs, Director Market Transformation

Francisco Naranjo, Technical Director

Market Development Standing Committee (MDSC)

Consultation with Smallholder Standing Committee (SHSC)

Annex 1

Resolution GA21-2d

Proposed Resolution to be adopted at the 21st General Assembly of the Roundtable on Sustainable Palm Oil (RSPO)

13th November 2024

TITLE: DEVELOP A MECHANISM TO INCENTIVIZE MEDIUM-SIZED GROWERS AND SMALLHOLDERS

Submitted by: WWF-Malaysia, Yayasan Lembaga Penelitian Kaleka Indonesia (Kaleka), Sawit Kinabalu Sdn. Bhd.

Background

The Roundtable on Sustainable Palm Oil (RSPO) envisions a global partnership to make palm oil sustainable. The mission of RSPO includes clearly communicating the benefits of sustainable palm oil, facilitating collaboration across the value chain, and setting global standards through certification (Source: RSPO Vision and Mission). As of March 2023, 425,883 hectares, or 27%, of Sabah’s total oil palm plantation area is RSPO certified, mainly from large plantations (Source: RSPO website). However, medium-sized growers and smallholders, who constitute a substantial part of the palm oil supply chain, remain under-represented due to a lack of financial incentives.

In line with the call by RSPO on Jurisdictional Certification approach, Sabah has come forward to declare its commitment to achieve 100% Roundtable on Sustainable Palm Oil (RSPO) Certified Sustainable Palm Oil as an integral part of transitioning the landscape to a sustainable palm oil production. This commitment from Sabah’s State Government, made in close collaboration with the RSPO and its global membership, will be achieved through a jurisdiction-wide landscape approach to transform the entire state’s palm oil supply chain, halting deforestation, restoring ecosystems and securing sustainable livelihoods. It will work simultaneously with smallholders (primarily local and Indigenous communities), the medium and large-scale growers, the processing plants and supply chains, and with the major buyers and financial institutions.

Since 2019, the Sustainable Palm Oil Team (SPOT) at WWF-Malaysia has engaged with medium-sized oil palm growers and smallholders through the Sabah Landscapes Programme, promoting group certification under the RSPO standard. Through this programme, WWF-Malaysia aspires to create a sustainable and inclusive palm oil industry that protects biodiversity and supports local communities. By harmonising economic growth with environmental stewardship, we aim to preserve Sabah’s forests and wildlife while encouraging responsible agricultural practices.

To achieve this vision, WWF-Malaysia actively collaborates with various stakeholders, including government agencies, industry leaders, and local communities, to drive meaningful change. However, despite nearly five years of engagement, progress has been slow. The lack of financial incentives has led to reluctance among medium-sized growers and smallholders to pursue certification, contributing to the stagnant RSPO certification rate of 27% in Sabah.

Other regions, where there are medium-sized growers and smallholders, may face similar challenges to those in Sabah.

Proposed Resolution

We, WWF-Malaysia, Yayasan Lembaga Penelitian Kaleka Indonesia (Kaleka), and Sawit kinabalu Sdn. Bhd., believe that incentivising the oil palm growers, particularly the medium-sized growers and smallholders can enhance participation and support for RSPO certification among these oil palm growers. Therefore, we are proposing the following resolution:

RSPO will identify and develop a mechanism to incentivise medium-sized growers and smallholders.

With key points as follows:

1. RSPO will form a task force to identify and develop a mechanism, considering the potential benefits, risks, and administrative challenges; with the Market Development Standing Committee to oversee the progress of the task force.
2. The objective is to develop a mechanism that would incentivize sustainable practices and improve certification rates among medium-sized growers and smallholders by ensuring they receive financial returns that match and are commensurate with the effort and resources they put into getting certified.
3. The mechanism will be designed to ensure transparency, fairness, and compliance with relevant competition laws.

Potential Benefits

1. Certification Rates: Market-based incentives encourage more growers, particularly the medium-sized growers and smallholders, to pursue RSPO certification, boosting overall rates.
2. Supply Chain Integrity: More certified growers enhance the credibility of RSPO-certified palm oil.
3. Economic Empowerment: Enhancing the livelihood of growers.
4. Sustainability Practices: Financial benefit from certification promotes sustainable practices, benefiting the environment and communities.

Potential Risks

1. Antitrust Concerns: Could raise antitrust issues if it leads to collusion. RSPO must ensure transparency and compliance with competition laws.
2. Implementation Challenges: May face stakeholder resistance and administrative complexity.

Proposed Working Group overseeing this resolution

RSPO Secretariat, Market Development Standing Committee

Contact Info

Max Donysius, WWF-Malaysia ([email protected])

References

RSPO JA Piloting Framework