The sustainability challenges of biomass certification realities on the ground Lunch Dialogue WBM, 14 March 2013, Rotterdam
Goals for today • Present and discuss a number of challenges in the field of sustainable biomass and certification • Learn from experiences from the field • Identify opportunities to jointly work towards improving the sustainability of biomass production
Four Projects on Sustainability Certification of Biomass, funded by AgencyNL. • (1) Improving the social-economic impact of biomass production for local communities and indigenous peoples (palm oil, Kalimantan, Indonesia) • (2) Working towards sustainable biomass production (soy and sugarcane, Mato Grosso, Brazil) • (3) Moving South Africa forward to certified sustainable energy from oilseed crops (soy and sunflower) • (4) Smallholders and certification of biomass.
Summary of presentation 1. Local impacts of biomass production 2. Smallholders and certification of Biomass 3. Reporting and certification challenges 4. Main challenges and questions for dialogue
1. Local impacts of biomass production
Local impacts of palm oil Positive Negative • • Jobs (though few; 5% of communities Loss of land and property/use rights and wages below minimum) • Loss of subsistence (food, medicines, • More customers for local shops, but materials) and decreasing incomes mainly owned by immigrants • Loss of culture and knowledge • Road infrastructure, but also roads • Environment polluted damaged • Drinking water contaminated • Some schools, churches built • Health issues (pesticides, dust) • Sometimes electricity provided • Less access to energy (higher prices) • Human rights violations (discrimination, child and forced labor, no right to organize workers, violence, arbitrary detention) • Conflicts (horizontal and vertical)
Local impacts of soy and sugarcane • Loss of land, rural exodus, concentration of land ownership and income • Contamination of soil and water due to pesticides and use of vinassa (waste), siltation of water bodies , soil compression by heavy machinery • Deforestation, reduction of biodiversity • Marginalization of family farming, decrease of local food supplies • Health issues (increase in the rate of respiratory problems, headaches, intoxication, pesticides in mother milk, deformations and spontaneous abortions, etc) • Loss of cultural traditions linked to nature • Lack of alternative employment
Challenges to improve local impacts • Respect for (customary) land (use) rights, also in the law • Free, Prior and Informed Consent (FPIC) • Resolve conflicts • Protect water sources and cultural sites • At least minimum wages and respect for workers rights • Better controlled use of pesticides • Independent and participatory monitoring and official statistics on health problems specific to the region “We do not ask for more but we do not want less”
2. Smallholders and certification of biomass
Business motivations to include smallholders • more secure supply of better quality raw materials; lower costs of procurement; consumer preference for our products; profitable growth (Nestlé) • High potential for growth; By giving smallholders access to higher-quality seeds, training and fertilizers, they can often double or even triple their yields (Unilever) • A social license to operate and the company can avoid reputational risks
Potential benefits of certification for smallholders • Increased income (price premium, higher yields) • Improved health and safety (e.g. management, use and storage of chemicals, care for water quality and labor conditions) • Improved farm management (more sustainable, efficient and effective production • Increased cooperation of farmers (group certification, bargaining power, better access to markets and services) • Better business opportunities (access to credits, markets) • More local support (local license to operate)
Risks and challenges of certifying smallholders Risks for companies Challenges for smallholders • • Delivery unreliable or low quality, Financial (high costs, access to side-selling credit) • • Financial risks (costs for Technical (meeting criteria, aggregating supply, smallholder manage cooperative, acquiring fails to meet criteria) skills, administrative burden) • Risks for smallholders Business model (imbalanced power between farmers and • Financial (indebtedness, companies, non-adherence to the dependency on company and terms of agreements) market) • Cooperation fails • Insecure tenure rights • No ownership of certificate
Local impacts for palm oil smallholders (lessons of Indonesia project) • Loss of land to palm oil company without free prior informed consent (based on Plantation Law), conflicts • 2 ha plots do not provide for basic needs • Smallholders depend on company, not well organized • Lack of capital, credit and technical support • Inequitable, untransparent price contracts • Inadequate infrastructure • Low quality of land and seeds, limited access to fertilizers Low productivity Transfer of plot to outsiders Farmers indebted Work as laborer
certification of smallholders (lessons of South Africa project) • A high financial input is initially required • Look for risk reduction: crops that serve both food and energy market • Not all farmers and groups are at the same level of education Some are poorly schooled • Need to organise smallholders and provide quality assurance services • Develop fallow or unused land as it does not compete with local food production • Need for local facilitators (who speak local languages) • Certifying smallholders is likely to be a 3-year process (training, preparation, certification) • Develop a sound business model (profitable without external financial input)
How to support successful smallholder certification? Strategies to facilitate smallholder certification • Convincing smallholders (short-term incentives, building trust) • Lowering costs (Group certification, reduced certification fees) • Lowering thresholds (step by step, criteria, exemptions) • Increase access to credit and services (independent from company) • Increase skills, involve in standard development Enabling environment • Consistency in regulations and security of land tenure • Support for independent farmers organization and technical support • Access to capital, credit and markets, fair prices, better premium prices • Cooperation with local stakeholders • Rural investments
3. Reporting and certification Challenges
Reporting and certification challenges • Companies only report on the sources used for biofuel, the countries of origin and the certificate used to prove compliance with the EU RED • No additional reporting of the EU member states. (European Commission report on sustainability impacts based on publicly available information) • Important sustainability issues are not (yet) included in RED criteria, such as impacts on quality of water, soils and air and on social-economic issues • Big differences in the level of assurance offered by the various certification systems approved by the EU to prove compliance with RED and majority of companies chooses the systems with the lowest level of assurance • Verification challenges: the honesty of the records and procedures shown, partial certification, stakeholder do not come to consultations, stakeholders tell stories instead of facts, abundance of laws and regulations, hard to find good quality assessor
4. Main challenges and Questions for Dialogue
Main Challenges • Improve social and environmental impacts • Improve smallholder opportunities • Improve monitoring and reporting • Improve criteria and level of assurance
Questions for dialogue (1) Local impacts • How to improve local impacts? What are your experiences? What are the main challenges? What are the opportunities? Who can / should do what? Smallholders • How to improve smallholders opportunities? What are your experiences? What are the main challenges? What are the opportunities? Who can / should do what?
Questions for dialogue (2) Monitoring / Reporting • How to improve monitoring? What are your experiences? What are the main challenges? What are the opportunities? Who can / should do what? Criteria / Assurance • How to improve level of assurance? What are your experiences? What are the main challenges (e.g. verification of social criteria)? What are the opportunities? Who can / should do what? (e.g companies choose more robust schemes, EC revises RED to include more criteria?) Next steps for Agency NL? What can Agency NL do to improve sustainability of biomass?
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