Civil society organisations call for reform of RSPO membership rules

A coalition of civil society organisations has issued a joint statement in response to the RSPO Complaints Panel’s recent decision letter on the complaint against First Resources (RSPO/2021/04/EN).

The statement warns that the RSPO’s current Membership Rules contain serious loopholes that can be exploited through opaque ownership structures. According to the coalition, these gaps allow companies to continue harmful practices while still enjoying the benefits of RSPO membership, undermining both the credibility of the system and its stated goal of sector transformation.

There has long been a concern at the RSPO about the way some corporate groups shield themselves from accountability for land grabbing, deforestation, tax evasion and other misdemeanours by hiding their ownership of some of their subsidiaries through opaque ownership structures, often incorporating them through shell companies in offshore secrecy jurisdictions.

The 11 co-signatories argue that the Complaints Panel's decision creates a dangerous precedent, effectively reassuring companies that they can exploit weaknesses in the rules to maintain certification benefits while harmful operations continue through undeclared affiliates beyond scrutiny.

The result is that corporate groups that are members of RSPO can obtain ‘Certified Sustainable Palm Oil’ certificates for those operations to which it admits ownership, as long as they comply with RSPO’s voluntary standards, while the same corporate group’s shadow companies can continue with unsustainable practices. This presents a very serious obstacle to RSPO in its self-declared mission to transform the palm oil sector and opens up RSPO to the charge of ‘greenwashing’.

It is for this reason that the undersigned organisations are calling for urgent reforms to close these loopholes and bring RSPO in line with best practice. This should include adopting the Accountability Framework Initiative’s (AFI) definition of a corporate group, already recognised by FSC, and establishing due diligence and grievance protocols that apply a precautionary approach when ownership is concealed.

Without such reforms, RSPO will continue to enable so-called “shadow companies” to evade accountability, putting the integrity of its certification and grievance systems in serious doubt.

RSPO’s reactive posture is no longer sufficient. Shadow companies are not isolated irregularities but a major driver of deforestation and rights violations in the palm oil sector. By allowing opaque ownership structures to persist, RSPO risks enabling companies to continue destructive practices while maintaining certification status. A more proactive approach is urgently required to prevent abuse of loopholes in the Membership Rules.

Read the full joint statement here.

Undersigned Organisations

Forest Peoples Programme, Greenpeace, Greenpeace Indonesia, HuMa, JPIC Kalimantan, LemBAH, Pusaka, Perkumpulan Nurani Perempuan, Rainforest Action Network, TuK Indonesia, YMKL