The Impact of RSPO Certification on Oil Palm Smallholdings in Sarawak

Abstract

This chapter investigates the efficiency of the Roundtable on Sustainable Palm Oil (RSPO) certification system on smallholders in the Malaysian state of Sarawak. It focuses on a plantation that is an RSPO holding company, as well as surrounding villages in the state. The RSPO system was introduced in 2004. First, smallholders can reap substantial profits by cultivating oil palm. Compared to conventional crops, oil palm is currently one of the most attractive cash crops for inland dwellers. Smallholders view it as a flexible livelihood because they can combine it with other economic activities based on each household’s manpower and current financial situation. Second, RSPO certification has the potential to give smallholders more autonomy. Various forms of company support (based on the RSPO system), such as initial investment subsidies, free seedlings, technical support and fertiliser, are very important for smallholders’ success. Such support allows them to cultivate oil palm independently because company aid does not directly compel them to sell oil palm fruits to the company’s mill. Third, this chapter shows that the two-way relationship model gives inland indigenous communities the potential to become producers in the oil palm industry. This research offers a new perspective on how smallholders manage their businesses well by working with other leading actors through RSPO certification.