Palm oil, a major export industry in both Malaysia and Indonesia, is attempting to combat its environmental image problems with discussions in Jakarta this week. The Roundtable on Sustainable Palm Oil (RSPO) brings together the various stakeholders and would like to establish a certification system for the smallholders who collectively produce a third of the world’s 45 million palm oil output, though the interests of planters, buyers, financiers and environmental groups may diverge too far to reach any agreement.

Negative environmental practices centered around rainforest clearing have seen the palm oil industry routinely targeted by environmentalists’ campaigns: clearing the required land not only destroys sensitive ecosystems including the habitat of several endangered species, the draining of peatland under the forests releases copious amounts of greenhouse gases.

A certification system has been in place since 2008, though only plantations with connections to larger or state-run companies have been able to afford compliance, leaving smaller independents on the fringe. There is also some confusion as to what the regulations actually are. The RSPO is considering setting up a fund to assist smallgrowers and Norway has set up a $1 billion climate aid program for Indonesia which includes provisions for rewarding forest protection.

Although meetings are a positive step to solving palm oil’s problems, there is still considerable bitterness between producers and environmental groups such as Greenpeace, whose anti-palm oil campaigns have caused consumer backlashes against the industry.

articles: Reuters via Yahoo! (article #1, article #2)