Roundtable on Sustainable Palm Oil (RSPO) in

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Proceedings of the Asia Pacific Industrial Engineering & Management Systems Conference 2012 U. Wangrakdiskul, and N. Yodpijit.

Roundtable on Sustainable Palm Oil (RSPO) in Smallholder Farmers of Thailand Ubolrat Wangrakdiskul Department of Production Engineering, Faculty of Engineering King Mongkut’s University of Technology North Bangkok, Thailand Tel: (+66) 2-555-2000 # 8224 Fax: (+66) 2-587-0029 Email: [email protected] Nantakrit Yodpijit Department of Industrial Engineering, Faculty of Engineering King Mongkut’s University of Technology North Bangkok, Thailand Tel: (+66) 2-555-2000 # 8131 Fax: (+66) 2-912-2012 Email: [email protected]

Abstract. When the fossil energy resources are depleted, renewable energy becomes more important. Oil palm is one of the alternative energy resources that can be used to produce biodiesel. Currently, Thailand is ranked fourth in the world behind Indonesia, Malaysia, and Nigeria for the production of oil palm. In fact, the Roundtable on Sustainable Palm Oil (RSPO) has been formed since 2004 to promote the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders. The objective of this study is to investigate the implementation of RSPO program through smallholder farmers (less than 50 hectares each), which are accounted for over 70% of oil palm planting in Thailand. The present and future situations of palm oil industry are evaluated, and limitations of the RSPO program are discussed. As such, a model from this study can be used to promote the RSPO standard with remaining palm oil smallholders, and palm oil trade barriers may be mitigated. Keywords: Renewable energy, Roundtable on Sustainable Palm Oil (RSPO), Smallholder farmers. .

1. INTRODUCTION

price of oil palm fresh fruit bunches has been increased continually from 2.30 Baht/Kg in 2002, to be 5.34 Baht/Kg in 2011 (Office of Agricultural Economics, 2011b). Due to these results, several Thai farmers have changed their land farms to cultivate oil palm plant instead. The report from the Office of Agricultural Economics in 2012 shows that the oil palm production is 9.88 MT and the cultivation areas are 600,000 hectares or 3.75 million rais (1 hectare = 6.25 rais), which increased the production of oil palm by 20.63% and cultivation areas by 5.63% within 2010 and 2011 (Bureau of Agricultural Economics Research, 2012). Thailand is ranked fourth in the world behind Indonesia, Malaysia and Nigeria for the production of oil palm. However, it is only 3.9% of the total world production (Office of Agricultural Economics, 2011a). Now, the Thai government is trying to promote the cultivation of the oil palm plant in other regions of Thailand in addition to the

Nowadays, the depletion of fossil energy resources is becoming the high concerned issue of the global world. The exertion of exploring renewable energy has been performed. Oil palm biomass is one of renewable energy sources, which can be blended with diesel oil for producing biodiesel. In 2011, Thailand’s primary energy consumption was 138,598 Ktoe (Kiloton oil equivalent). The amount of imported energy was 64,472 Ktoe, which accounted for 46.52% of a year’s total energy consumption (Energy Policy and Planning Office, 2011). Because of these energy statistics, the Thai government has set a goal of 20.3% for the use of alternative energy by 2022. Currently, Thailand use of alternative energy sources is 7.9% and biodiesel is one of the alternative energies (Department of Alternative Energy Development and Efficiency, 2008). Thereby, the

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southern areas. Thereby, it leads to increasing a number of oil palm famers to be 128,265 families in 2011, which increased by 5.7% from 2010 (Office of Agricultural Economics, 2011b). In 2011, Indonesia and Malaysia are the leading countries for producing the palm oil with the amount of 1.7 MT or 81% of total world production (Office of Agricultural Economics, 2011a). The Thai government has concerned with the substitution of fuel oil by producing biodiesel from oil palm plant. Therefore, it has set the target for planting the new oil palm plant by promoting the expansion of cultivation oil palm areas by 80,000 hectares/ year (500,000 rais/year) for the next 5 years from 2006 (The Japan Institute of Energy, 2008). Indonesia and Malaysia are the largest producing oil palm in the global world, and continually expand the cultivation areas of oil palm plant. As a result, it has the effects on the climate change and biodiversity, because some area have been changed from forests to oil palm farm instead (Fitzherbert et al, 2008). Furthermore, the deforestation from expanding the cultivating areas of oil palm is also crucial for the global world. Therefore, the organization by multi stakeholders in Switzerland has established the standard for promoting the sustainable production of oil palm by controlling the glowers, mill industries, and supply chain traders. It is the Roundtable on Sustainable Palm Oil (RSPO) standard, which is described for more detail in the next section.

have pointed out that the producers should adopt the better management practices for alleviating the impacts of biofuel to the social and environment, such as RSPO standard. The Roundtable on Sustainable Palm Oil (RSPO) has been formed since 2004 to promote the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders. The seat of the association is in Zurich, Switzerland, while the secretariat is currently based in Kuala Lumpur with a satellite office in Jakarta. RSPO is a not-for-profit association that unites stakeholders from seven sectors of the palm oil industry, oil palm farmers, palm oil processors or traders, consumer goods manufacturers, retailers, banks and investors, environmental or nature conservation (NGOs) and social or developmental (NGOs) to develop and implement global standards for sustainable palm oil (Roundtable on Sustainable Palm Oil, 2012). Biodiversity, deforestation, and green house gas emission are the main intention of RSPO standard. However, there are remaining criteria, which must be complied with as be described in the next section.

2.2 Types of RSPO Certification Standards RSPO Supply Chain Certification Systems (2009) illustrate that the standards in the RSPO certification are composed of two main types; farmers and supply chain certification. The schematic overview in figure.1 illustrates that there are 5 phases within the RSPO supply chain. The first phase is related with farmers and millers, who are the upstream sector of the palm oil supply chain. They must abide by the principles and criteria of the RSPO framework. The second and third phases are related with the first and final refinery of palm oil. These phases must be performed as the standard of supply chain certification, which can be traceable through the origin of palm oil materials. The phase I to the phase III can receive the supply chain certification via UTZ certification ,which UTZ means “good” in a Maya language (UTZ certified, 2010). The fourth and fifth phases are end-product palm oil manufacturers and retailers which can obtain a supply chain certificate by trading via Green Palm trader on website. However, the details of these certifications may be different from place to place. These certifications have been divided into two types which are described in sections 2.2.1 and 2.2.2 below.

2. ROUNDTABLE ON SUSTAINABLE PALM OIL (RSPO) This paper aims to study and analyze the RSPO standard implementing through the smallholder farmers in Thailand. It is the system of promoting and controlling the sustainable production of palm oil. At present, the RSPO standard is still not well known in Thailand, especially for entrepreneurs in palm oil sector. However, it plays an important role in the supply chain of palm oil products. Many related sectors should not disregard this standard, because it has an influence on the palm oil products which exported to the EU countries. Therefore, the procedure and background of RSPO should be reviewed.

2.1 What is RSPO? Previous studies have reviewed and surveyed about the RSPO standard. Tan et al. (2009) have clarified the negative issues reported in the literature surrounding palm oil production. They have addressed about various policies that will lead to a more sustainable production and development of palm oil industries, such as RSPO, BMP (Best Management Practice). In addition, Lee et al. (2011)

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category has established e foor sustainablee palm oil froom the middle m stream m until downstream chain or o between phase p II and a V in figuree 1. Each batcch of palm oill can be traded through onee of the fo our supply chhain models thhat are approv ved by RSPO O. They can preserve the claim to sustainable production and a the RSPO R Supply Chain Certificcation System m that is appliccable to all a downstream m palm basedd industries which w purchaase and process p RSPO O certified suustainable paalm oil. Thesse four su upply chain models are Identity Presserved, Segreegation, Mass M Balance,, Book and C Claim, which can be illustrrated as fo ollows (RSPO O Supply Chaiin Certificatio on Systems, 20009).

Figure 1: Schhematic Overvview of Palm Oil O Supply Chhain (Modiified from: RS SPO Supply Chain C Certificaation System ms, 2009)

i. Identityy Preserved (IP) - ensurres that all RSPOcertified sustaainable palm m oil and its derivativves are physically p preserved from m all other oil palm sources s th hroughout thee supply chainn as shown in figure f 2.

2.2.1 Farmerrs Certification The farmers in this cattegory are refferred to the farmers f who planting oil w o palm. The areas a of their planting are varying v appproximately between 5 - 100,000 rais. Therebby, the cllassification of o farmer grouups has been performed. p A such, As thhey are classiffied into two groups. g i. Smallhoolder Farmerrs Standard This standdard is the susstainable deveelopment of palm oil foocusing on sm mallholder oil palm farmerss who own less than 500 hectares (3112.5 rais) (Rouundtable on Sustainable Palm Oil. 20012). In Thaiiland, there arre a number of oil palm farmers f abbout 128,265 families. Most of them are the smallholder faarmers and proovide the oil palm p productiion for more than t 70% off Thailand’s yield y productiion. The princciples and critteria in thhis group aree consists of 8 principlees and 39 criteria, c reespectively. The T contents of them are addressed with w the leegal, econom mical, environm mental, socieetal, and opeerations m management. In this papeer, we focuss on this subbgroup beecause they play p an importtant role in paalm oil producction in T Thailand.

Figure F 2: Schematic of Identtify Preserved d Palm Oil Suppply Chaiin (Modified from: RSP PO Supply Chain C Certiification Systeems, 2009) ii. Segregation (S) - ensures thatt RSPO certtified su ustainable pallm oil and itss derivatives is i a mixture of o oil frrom various RSPO-certified R d sources as sh hown in figurre 3.

d ii. Big Estate Standard In this caategory, it has been dividedd in two sub-ggroups. First, it refers to the farmerrs of oil palm F m whose estatee more thhan 1,000 hectares (6,250 rais) r each fam mily. Second, itt refers too the mills thhat have the mill processees and the grrowing esstate, but nott restrict to thhe amount off land. In Thhailand, thhere are a few w of the first one. The priinciples and criteria, c w which they must m comply with, are thhe same as of the sm mallholder faarmers in the above subseection, but theere are soome differencces in the criteeria or indicatoors.

2.2.2 Supply Chain Certtification (SC CC) Figure F 3: Schematic of Segrregation Palm Oil Supply Chain C (Moddified from: R RSPO Supply Chain Certificcation Systeems, 2009)

The palm m oil material may m go throuugh many prodduction annd logistical stages s betweenn the farmer and a the producct. This

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2.3.1 2 Princip ple 1:

iii. Mass Balance B (MB)) - allows mixxing of certifiied and noon-certified palm p oil to be b traded thrroughout the entire suupply chain ass shown in figgure 4.

Com mmitment to Transparen ncy

This principle has 2 criteria. They y have specifiied that oil o palm farmeers and millers provide adeequate informaation to other o stakeholdders on envirronmental, soccial and legall issues reelevant to RSP PO criteria. M Moreover, man nagement doccuments are a publicly available, a exccept where th his is prevennted by commercial confidentialitty or wheere disclosuure of in nformation woould result inn negative env vironmental orr social outcomes. o

2.3.2 2 Princip ple 2: Complliance with Applicable A Laws and a Regulattions This prrinciple consissts of 3 criterria, addressingg about compliance with w all interrnational law ws and reguulations, demonstration d the right of lland use. Furtthermore, usee of the laand for oil pallm does not diiminish the leg gal rights. Figure 4: Schem matic of Masss Balance Palm m Oil Supply Chain (Moddified from: RSPO R Supply Chain C Certificcation Systeems, 2009)

2.3.3 2 Princip ple 3: Comm mitment to Long-term L Econom mic and Fin nancial Viability This principle p hass only onee criterion, which emphasizes onn implementing the managem ment plan to achieve a lo ong-term econnomic and finaancial viabilitties.

iv. Book an nd Claim (B& &C) - offer ceertificates tradding of R RSPO-certified d sustainable palm p oil. If the companies want w to acchieve the RS SPO certificatiion, they can buy b it from thhe ones w who have thee certificationn via the Greeen Palm traader as shhown in figuree 5.  

√ 

2.3.4 2 Princip ple 4: Use off Appropriatte Best Practices by Farrmers and M Millers

RSPO CERT TIFIED PLANTATI ONS

The priinciple has ddeveloped from m the proceddure of RSPO R standardd focusing 8 criteria. Th hey are (1) opperating procedure, p (2) maintaining the soil fertillizer, (3) conttrolling th he degradationn of soil, (4) maintaining the quality of ground and a surface water, w (5) ussing appropriiate Integrateed Pest Management M ( (IPM) techniqques, (6) using g agrochemicaals in a way w that doess not endangeer health or the t environmeent, (7) fo ocusing on ann occupationaal health and safety plan, and a (8) trraining mem mbers: staff, f, workers, smallholderss and contractors. Duue to a compllexity of this principle, p all the t key persons p in the business should pay attenttion on the prrinciple and a criteria forr an achievem ment.

100 tons

MIILLER GLO OBAL SUPPLY CHAIIN CONVENTIONAL PLANT TATIONS

X MIL LLER 1

X MIL LLER 2

X TRANS SPORTER 1

X TRANS SPORTER 2

X REF FINER 1

X REF FINER 2

50 0 ton ns

 

√

END USER U 1

50 0 ton ns

 

√

END USER U 2

Figure 5: Schem matic of Bookk and Claim Palm P Oil Supply Chainn (Modified frrom: RSPO Suupply Chain Certiification Systeems, 2009)

2.3.5 2 Princip ple 5: Enviroonmental Reesponsibilityy and Conserrvation of N Natural Reso ources and Biodiveersity This prrinciple is baased on 6 crriteria of juddgment. natural They T concern with the ennvironment, conservation c reesources andd biodiversity, which are the main foocus of RSPO R standardd. The plantattion and mill management aspects which w have an effect on the environment should be ideentified. In n addition, the plans of mitigating the negative n enviroonment sh hould be peerformed. The status of rare, threatenned or endangered species and highh conservation n value habitaats, that affected a by plantation p orr mill manaagement, shouuld be

2.3 Principles and Criterria of Farmeers Certificaation As mentiooned in the subsection 2.2.1, there are 8 prrinciples andd 39 criteria in the RSP PO standard. RSPO C Certification S Systems (20077) suggest thaat all RSPO criteria appply to the management m o both oil palms of p (farmerrs) and m (facilitiess). Principles and mills a criteria off RSPO Certiffication Systems can bee described in details as folllows.

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2.3.8 Principle 8: Commitment to Continuous Improvement in Key Areas of Activity

identified. Trying to reduce, recycle, reused and dispose wastes in the procedure should be carried out. Efficiency of energy use and use of renewable energy is maximized. Firing the disposal wastes should be avoided. Furthermore, developing the plan to reduce pollution and emissions should be taken. Establishing the procedure to conform to these requirements is necessary.

Only one criterion in this principle focuses on farmers and millers regularly monitor and review their activities and develop and implement action plans for continuous improvement in key operations. After reviewing all of these principles, we have known that the farmers or millers, who intend to undertake the RSPO certification, should comply with these 8 principles. Most of them are importance especially principle 5, 6, and 7, because they concern with the action of all players in palm oil supply chain. As these considerations, we have accommodated these principles into the procedure of setting organizations for achieving the RSPO certification. It will be explained in detail in the next section.

2.3.6 Responsible Consideration of Employees and of Individuals and Communities Affected by Farmers and Millers The 10 criteria in this principle have focused on safety and health of workers and communities. Farmers and millers plans must be made, implemented and monitored to demonstrate continuous improvement, which mitigates negative impacts and promotes positive results. Both farmer and miller should establish the transparent method for communication with the communities and stakeholders. There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system. Pay and conditions for employees always meet at least legal or industry minimum standards. The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Child labor is not used. The employer shall not engage in or support discrimination such as race, caste etc. Establishing and implementing the policy to prevent sexual harassment and protect the reproductive rights of employees should take into account. Farmers and millers deal fairly and transparently with smallholders and other local businesses, and contribute a sustainable development to the local communities.

3. RESULTS. 3.1 Current Situation of RSPO in the Global World and Thailand At present, we have recognized that the RSPO standard is still not well known in Thailand. However, some related private sectors are trying to consolidate the multi-stakeholders for interpreting the principles and criteria of international RSPO and then establishing the RSPO standard which appropriate with Thailand environment. The RSPO organization has reported the number of membership classifying with the member types as shown in table 1. There are Ordinary Members, Affiliate Members, and Supply Chain Associates in a number of 659, 100, and 133. Nevertheless, the number of certified members is less than the number of memberships. Currently, the number of RSPO ordinary membership in Thailand is 6 palm farmers, and 17 palm oil processors and traders, but affiliate Members and supply chain associates are not manifested.

2.3.7 Principle 7: Responsible Development of New Plantings This principle is composed of 7 criteria which emphasize on the new plantings of oil palm. Their contexts have pointed out as follows. A comprehensive and participatory independent social and environmental impact assessment should be undertaken, prior to establishing new plantings. Soil surveys and topographic information are used for site planning. New plantings have not replaced primary forest or any area containing one or more High Conservation Values. Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided. No new plantings are established on local peoples’ land without their free. Local people are compensated for any agreed land acquisitions and relinquishment of rights. Use of fire for the preparation of new plantings is avoided.

Table 1: RSPO Members Types of Global (RSPO, 2012) Types of Members Ordinary Members Affiliate Members Supply Chain Associates

The number of Memberships 659 100 133

Table 2 shows the RSPO membership, which is classified into two types; supply chain and farmer certification. The supply chain type is further classified into two sub-types; companies and facilities. The number of companies and facilities are 177 and 370, respectively. Likewise, the farmer certification consists of two sub-types;

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independent smallholder farmers who participate in this pilot project are composed of two subgroups. The first one is located in Borai district, Trad province. And the second one is located in Khlong‐Had district, Srakaew province. The distance between these subgroups is about 100 km (Kilometers). The information of these subgroups is described in table 3. The total number of farmers in this project is 56 which include 18 members in Borai and 38 members in Khlong-Had. The total areas of plantation are 455.36 ha (2,846 rais), which the plantation areas per plot is varied between 5 - 300 rais.

farmers and palm oil mills. The number of farmers and palm oil mills certification are 34 and 154, respectively. However, there are only 3 companies in Thailand that can receive the supply chain certification types. Furthermore, only one company can obtain the farmer certification. Meanwhile, there are three companies ongoing the process for achieving the farmer certification. All of them adhere with the GIZ ( German Academy for International Cooperation) pilot project for implementing RSPO standard through the oil palm farmers. Table 2: Certification types of palm oil products of the global world (RSPO, 2012)

Table 3: Total Smallholder Members, Total Planted Area and Total Plots for each Sub-group (RSPO, 2012)

Types of Certification Supply Chain Farmer Certification Certification Palm Oil Companies Facilities Farmers Mills The Number of certificates

177

370

34

Sub-Group Sub-Group Borai Sub-Group Khlong -Had Total Note: ha = hectare

154

Total Members 18 38 56

Total Area (ha) 153.28 302.08 455.36

Each sub-group organization is composed of the manager, farm advisor (FA), the person who supervises the farmers in various duties such as High Conservative Value (HCV), Integrated Pest Management (IPM), fertilizer management, safety of employee, legal regulations, data record in planting, how to manage wastes in planting area, etc. Training the smallholder farmers in the project is very importance. Most of them tend to cultivate the oil palm by their experiences and seldom analyze their production or problems, including palm diseases and nutrition. Therefore, the training program should consist of teaching and demonstrating the farmers to improve their knowledge and to solve the problems by themselves. Moreover, training to record their information in planting areas should be performed. The frequency of training by expertise and visitation of certified body (CB) should be taken at least 3 times a year.

3.2 Case Study of RSPO Implementation through Independent Smallholder Farmers in Thailand 3.2.1 Management in the Farmers Group The studied factory has been established since 1986. It is one of the companies which produces palm oil and has own the plantation areas as well. In addition to cultivating oil palm itself, it has also bought the production of oil palm; fresh fruit bunches (FFB) from smallholder framers. Among the small holder farmers, they are the main players in the supply chain who supply their yields to the millers. At present, the issue concerning with the environment, biodiversity, and climate change has led the RSPO standard to be emerged. It drives the companies trying to solve this problem. The studied company has also adhered with the pilot project which supported training and funding by GIZ (German Academy for International Cooperation) and OAE (Office of Agricultural Economics). After participating with GIZ program, the studied factory has been qualified to be one of the companies that implementing the RSPO standard through the smallholder farmers. Establishing the organization for performing the project is crucial. Therefore, the pilot project of this studied company has been constructed since 2009. At first, it has recruited the appropriate farmers who have provided the fresh fruit bunches (FFB) to the company. The management of each sub-group is independent. These farmers are divided into two subgroups as mentioned above. The

3.2.2 Financial Support and Cost Implementation In addition to supporting the farmers with knowledge training, assisting the financial funding to them is crucial as well. Lee et al. (2011) have addressed about the limitations of smallholder farmers especially in developing country, because they often lack the means and capacity to do so. Some of the challenges faced by smallholders include high certification costs, insufficient institutional capacity, inadequate financial and social incentives, poor group organization and lack of external support. Therefore, the smallholder farmers should be supported the funding for being the expenses of operating activities in the projects by

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the external institution. Moreover, Lee et al. (2011) have summarized about the costs associated with the process of compliance with the RSPO standard. Costs of compliance derive from various activities including the use of integrated pest management techniques, the replacement of child labor with adult labors, the training of smallholders, and their participation in training sessions. Transaction costs include fees for third-party inspection, administrative charges for the certification process as well as time cost for smallholders to carry out administrative duties (e.g., filling up forms, record keeping of farm activities) and collecting data as part of the auditing process. Opportunity costs are incurred when sustainable practices, such as less frequently use of fertilizers, compromise farm productivity, which leads to smaller profit margins. In addition, the fee payment is also costly for the smallholder farmers to pay out. These costs consist of membership costs, costs of obtaining certifications, and costs of renewing certifications. Membership costs are illustrated in table 4; they have been classified by types of membership. The case studied company has applied as ordinary membership (small farmers < 500 ha).

Table 5: The advantages and limitations by the side of the farmers

Table 4: Membership Fees classified as membership types (RSPO, 2012)

4. CONCLUSION AND DISCUSSION

Types of Members Ordinary Members Ordinary Members (small farmers < 500 ha) Affiliate Members Supply Chain Associates Note: ha = hectare

Advantages 1. The FFB productions of the farmers are increased

Limitations 1. Some farmers have limitation for learning new knowledge, due to their ages or education levels. 2. The farmers have better 2. Lack of financial health than in the past, within smallholder because of improvement farmers group; make their planting methods them disable to such as using IPM, achieve RSPO controlling fertilizer used. certification by themselves. 3. The farmers can exchange 3. Lack of awareness the experience among their about the significance groups and create the of RSPO standard, cooperation within their which will be more socials. serious continually in the future.

This paper provides the detail of RSPO principles and criteria, including the types of RSPO certification and membership types. Furthermore, the case study of implementation the RSPO standard through smallholder farmers in Thailand has been investigated. It is one of the pilot projects that has been supported by GIZ and OAE. From this study, we conclude that this pilot project is successful in implementing RSPO standard through smallholder farmers, because it can achieve the RSPO of farmer certification. However, there are some criteria that remain incomplete such as the knowledge of some farmers, poor management of pruning palm trees in some areas, etc. The adjustment of these problems is to be continued. According to section 3.3, it shows that there are advantages and limitations within this project. The advantages aspect infers that the farmers have taken the benefit from implementing RSPO standard, namely obtaining the more revenue from production improvement, improving their health and development their knowledge. However, the farmers who participate in this project must pay the membership fee for 5 THB/rai of each member. Therefore, they can sell the FFB to the company or factory at the higher price as their commitment with the company. On the other hand, the limitation of this project is the lack of financial and knowledge of the farmers. The point of finance is extremely serious for this project. The suggestion is that the Thai government should pay more attention on the farmers’ problem and also provide the funding through

Membership Fees (€/year) 2,000 500 250 100

Meanwhile, the costs of approved certification on the first year are about 14,275 SGD (SGD: Singapore dollar = 25.32 THB). After that the costs of re-audit certification are 9,500 SGD/ year within 5 years. Thereby, supporting the budget to smallholder farmers by the company or palm oil mill industries is necessary.

3.3 Results of Implementation RSPO Framework After implementing the RSPO through the smallholder farmers into sub-groups; Borai and KhlongHad, we found both advantages and limitations during the procedure. We have drawn it from the case study as shown in table 5. Moreover, the farmers in the project just can receive higher revenue than the past. Because the millers or companies, who support the pilot project, will pay them with the higher price of FFB than those of who are not the group members.

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them. In addition, the enhancement of smallholder farmers’ knowledge is also crucial. Thus, continuous training the knowledge through the smallholder farmers should be conducted. Finally, the numbers of farmers who participate in this project are only 58. It is very few when comparing with the total number of 128,265 oil palm plantation farmers in Thailand. As this result, promoting and implementing the RSPO standard through the other smallholder farmers should be speeded up. When the RSPO standard becomes a successful procedure, it will promote the supply chain of end products containing palm oil materials be sustainable. Furthermore, these products can be easily exported, especially to the EU countries.

Office of Agricultural Economics. (2011a) Agricultural Statistic of Thailand 2011, Ministry of Agriculture and Cooperative, Bangkok, Thailand. Office of Agricultural Economics. (2011b) Fundamental Information of Agricultural Economics 2011, Ministry of Agriculture and Cooperative, Bangkok, Thailand. The Japan Institute of Energy. (2008) The Asian Biomass Handbook, Ministry of Agriculture, Forestry, and Fisheries. Roundtable on Sustainable Palm Oil. (2012) An International Multi Stakeholder Organization and Certification Scheme for Sustainable Palm Oil. http://www.rspo.org (accessed 12.8. 2012). RSPO Certification Systems. (2007). www.rspo.org/sites/.../RSPOcertification-systems.pdf. (accessed 12.8. 2012). RSPO Supply Chain Certification Systems. (2009). www.rspo.org/files/.../RSPO-SCCS-5Nov2009.pdf. (accessed 12.8. 2012). Tan, K.T., Lee, K.T., Mohamed, A.R. and Bhatia, S. (2009) Palm oil: addressing issues and towards sustainable development, Renew Sustainable Energy Reviews, 13(2), 420–427. UTZ certified: certification and traceability of sustainable agricultural commodities. (2010). www. Utzcertified.org (accessed 24.9. 2012).

ACKNOWLEDGMENTS Authors would like to thank the plant staffs such as owner, the academic manager; Mr. Sura Tanviset, and the factory manager; Mr. Chairong Rakthong of the participating company for providing information to this study. We also appreciate with several people in the ministry of industry; Mr. Anand Fuksung, Mr. Chawalit Chainiwattana, and anonymous people for their contribution to this study.

AUTHOR BIOGRAPHIES

REFERENCES Ubolrat Wangraksidkul is a lecturer in Department of Production Engineering, Faculty of Engineering, King , Mongkut’s University of Technology North Bangkok, Thailand. She received an M.Eng. in Industrial Engineering from Chulalongkorn University in 1990. Her research interests include material engineering such as cordierite ceramics for catalytic converter in an automobile, reverse supply chain of waste products for renewable energy, and health care management. Her email address is

Bureau of Agricultural Economics Research, Office of Agricultural. (2011) Situation of Importance Products and Trends of Agricultural, Ministry of Agriculture and Cooperative, Bangkok, Thailand. Department of Alternative Energy Development and Efficiency. (2008) Renewable Energy Plan 15 years 20082022, Ministry of Energy. Energy Policy and Planning Office. (2011) Thailand Energy Statistics 2011, Energy Policy and Planning Office, Department of Alternative Energy Development and Efficiency, Ministry of Energy. Fitzherbert, E. B., Struebig, M. J., Morel, A., Danielsen, F., Br¨uhl, C. A., Donald, P.F. and Phalan, B. (2008) How will oil palm expansion affect biodiversity?, Trends in Ecology and Evolution , 23, 538-545. Lee, J.S.H., Rist, L., Obidzinski. K., Ghazoul, J. and Koh, L.P. (2011) No farmer left behind in sustainable biofuel production, Biological Conservation, 144, 2512–2516.

Nantakrit Yodpijit is a fulltime lecturer in the Department of Industrial Engineering, Faculty of Engineering, King Mongkut’s University of Technology North Bangkok, Thailand. He earned a doctoral degree in Industrial and Systems Engineering from Virginia Tech, USA in 2010. His research interests are in the areas of human factors engineering and ergonomics, supply chain management, and renewable and sustainable energy. He can be reached at

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