April 11, 2013
The Smallholder Green Certificate for trading under the GreenPalm platform is now available as endorsed by the RSPO EB in November 2012. This decision was crucial as it served as a catalyst for certification of independent smallholders under the RSPO scheme. Among the challenges for independent smallholders to be certified are the missing links within the system that remains unresolved. For FFB trading, smallholders are allowed to sell certified FFB to any certified mill in accordance to the Mass Balance and Segregated systems. However, the rules to ensure the traceability of FFB between a Group of independent smallholders and Mill require more clarity.
To allow Groups of independent smallholders to use the Book & Claim system, the EB has agreed with the proposal to create Smallholder Certificates to be traded via the GreenPalm system based upon the following parameters:
- Introducing RSPO Smallholder CPO, RSPO Smallholder PKO and RSPO Smallholder PKE certificates as separate categories in the GreenPalm system.
- Certificate trading can take place via live bids and live offers or via off-market deals (OMD). All realized trades will be registered on the GreenPalm website.
- Conversion rates for FFB into CPO, PKO and PKE are set according to the following rules:
- CPO: based on national or local (e.g. provincial) reference figures. If the group manager can demonstrate with proof a higher OER of the Group (and the CB can verify this), this OER can be used as basis to convert FFB into CPO certificates. In the absence of a national average, a default OER rate of 20 % shall apply.
- PKO and PKE: based on national or local (e.g. provincial) reference figures. If the group manager can demonstrate with proof a higher PK rate conversion (and the CB can verify this) this rate can be used as basis to convert the FFB to PK. In the absence of national reference, a 5% default value of PK rate is recommended of which 45% is PKO volume and 55% PKE volume based on the industries’ current annual average rate as shown in Table 1 below:
- 0.5 will be rounded up, 0.4 will be rounded down. So, 3.5 will be 4 and 3.4 will be 3.
- There will be a No Buy Back Policy, as it is likely that claims will be very specific to groups of smallholders unless there is overselling.
- The GreenPalm handling fee and the donation to RSPO will each be 1 USD per certificate, similar to the regular certificates.
| Assumption:
200 smallholders, each has 5 ha of land planted with oilpalm, with yield estimated at about 2mt of FFB per month
(1000ha x 2mt/ha = 2000mt/month (FFB)).
Calculation:
CPO (based on 20% conversion rate):
0.2 X 2000mt (FFB) = 400mt (CPO)
PKO (based on 5% PK rate, 45% PKO volume, and 55% PKE volume rate):
0.05 X 2000mt (FFB) = 100mt (PK) X 0.45 = 45mt (PKO |
Nevertheless, the proposed introduction of the Smallholder Green Certificate under the Greenpalm platform is perceived as a potential medium for incidences of double counting and overselling of CSPO. To prevent such occurrence, the following measures have been approved by the EB:
- In the interim, upon being certified, the Group Manager must choose to use only one of the following systems to trade certified FFB:
- the Greenpalm system; or
- physical system
The CB will indicate system opted by the Group Manager on the certificate issued.
- Long term solutions to such problems are the establishment of an integrated IT system that covers both physical sales and the certificate trading, which is currently under development.
This decision is effective immediately.
To-date there are four Independent Smallholder Groups certified under the scheme and now using this Smallholder Green Certificate facility.
As of 1 January 2017, the RSPO no longer endorses GreenPalm as the service provider for the trade in Book and Claim certificates. From this date, RSPO-certified volumes can be sold via Credits on the RSPO PalmTrace platform.
