Group Certification Scheme for Independent Smallholders

Introduction

Smallholders produce much of the world’s palm oil. In the two major producers (Indonesia and Malaysia), together accounting for over 80% of the world’s production, smallholders cultivate 37-42% of the oil palm area.  Other countries also have large numbers of smallholders although a much smaller percentage of the world’s traded palm oil.

Smallholder oil palm cultivation can be planned to have minimum social and environmental impacts to make it sustainable. But, given that smallholders usually have few resources, their RSPO certification should not unduly tax them. Thus, the methodology for their assessment must consider the ground realities.  A major cost saving is to certify smallholders in groups, not individually.  Smallholders can organize themselves into groups, apply standard good practices uniformly and apply for (group) certification with the RSPO P&C for Independent Smallholders.

On the other hand, the Group Certification Scheme must consider the range of oil palm smallholders - from the very small with just a few palms in mixed plots to ‘mini’ estates. The smallholder may be completely independent, selling to whoever he wants to, or be linked to a mill for whatever reason (for historic, proximity, economic, legal, etc.).  The RSPO certification is for sustainable palm oil production and use, however certified sustainable palm oil have also to fulfill the technical specification of CPO.

In the context of RSPO systems, independent smallholders are characterized by their: freedom to choose how to use their lands, which crops to plant and how to manage them; being self-organized, self managed and self-financed; and by not being contractually bound to any particular mill or any particular association. They may, however, receive support or extension services from government agencies.

Scheme smallholders are characterized as smallholders who are structurally bound by contract, by a credit agreement or by planning to a particular mill. Scheme smallholders are often not free to choose which crop they develop, are supervised in their planting and crop management techniques, and are often organized, supervised or directly managed by the managers of the mill, estate or scheme to which they are structurally linked.

Elements of A Smallholders’ Group
Group certification schemes are made up of three key elements:

• Group certification standard [in this case, the RSPO P&C for Independent Smallholders]. These set out the requirements to be met for certification.
• Accreditation requirements for group certification. These are the approval mechanisms for certification body to ensure that the certification body which awards the group certificate is competent and capable, produce credible and consistent results.
• Group certification requirements. These are the processes for evaluating a set of requirements (in this case, Group Certification Requirements) has been met, usually carried out by a certification body.

What is Group Certification?

Group certification is certification of an organized group of producers with similar production systems, where the group as a whole is certified.
Smallholder's group certification implies that:

• There is a central body that ensures the group adopts Standard / common practices and manages an Internal Control System [ICS]. This can be a self-organized cooperative/farmers’ association, an individual or government agency.
• All the small farms with their production and handling activities adopted are certified as a group. The individual group members may not use the certification individually.
• The group members operate under contractual or binding requirements specifying their commitment to the standard and permit assessment.
• The ICS maintains files on all group members and assesses their individual operation at least once yearly. A list of the members is available. The group through the ICS mechanism decides on the standards to comply with. Non-compliances are dealt with according to set procedures and sanctions.

The group does not have to be legally constituted; however, it is important to have both structure and system to facilitate making and communicating decisions as well as administering the whole.

What Is An Internal Control System (ICS)?
An ICS is a set of documented procedures and processes that the group implements to achieve its targets. With an ICS the group basically self-controls its members for compliance with the standard. The certification body then mainly evaluates whether the Internal Control System is working well and efficiently. The evaluation is done by checking the ICS documentation system, staff qualifications and assessing some members.

Who Is Eligible For Group Certification?
Smallholders groups can be certified if they fulfill the following conditions:

• The members grow oil palm, sometimes along with subsistence production of other crops, where the family provides the majority of labor and the farm provides the principal source of income and where the planted area of oil palm is usually below 50 hectares in size
• Group has the capacity to control and evaluate all members – and that this includes communicating and visiting them at the required frequencies
• The group has adequate resources to support an impartial entity to manage a viable internal control system objectively and independently, and fulfills at least a batch of CPO production in the mill.
• FFB from the individual members of the group are traded as a group and not individually.
• The group has and implements a system of traceability that allows monitoring of the flow of certified products.

In principle, only smallholders should be members of the group for group certification, but larger farms of >50 ha (e.g., independent outgrowers] can belong to the group.

2.6. Group Certification Requirements
Producer organizations can obtain RSPO certification if they comply with the standard and all the Group Certification Requirements.

Standard of reference for group certification:

Type of RSPO certificate for group certification:
Certified FFB: FFB from a certified smallholders group. An association or organization of the smallholders holds the certificate and organizes the ICS, i.e., the association / organization the ICS.