An excerpt from our new Supply Chain Risk & Innovation publication: http://innovation-forum.co.uk/supply-chain-risk-innovation.php A key mechanism of the sustainability movement, commodity certification has proved fairly effective in the fight against environmental destruction. But do global systems designed to drive best practice have their limitations?

1. PAGE 21
than simply spraying weedkiller everywhere
– costs more, as it demands more pairs of
hands. But it is a method which is maintaining
yield levels across the San Alberto group. “In
other farms where they don’t do this, they
have to keep renovating plants all the time to
keep boosting productivity. But we have done
very little renovation over the last 30 years
and our yields stay the same,” says Guerrero.
Today, more than 3,000 boxes of bananas per
hectare are produced every year by the group,
the large majority of which are bought by
Chiquita and shipped to the US.
Afour-hour drive north east of Costa Rica’s
capital of San José is the town of Siquirres,
home to La Estrella, part of the San Alberto
group of farms producing bananas on a
700-hectare plot.
Strolling among his expansive plantation
of three-metre high plants, the farm’s
sustainability coordinator Jorge Guerrero
explains the nine-month fruit-bearing cycle of
his plants and proudly states that “unlike other
plantations, we rarely need to replant our
plants. By keeping them in good condition,
they will just keep on producing.”
Central to this “good” conditioning
is effective soil management. The ground
throughout the farm is a blanket of weeds and
grasses which, rather than compete with the
plants for nutrients – something Guerrero
says is a “myth” – stops the soil being eroded
and keeps the applied fertiliser where it should
be, at the base of the plants rather than being
washed away into the local rivers.
Yes, farming in this more manual way –
handpicking which weeds to remove rather
CERTIFICATION: THE PROS AND CONS
Iscertificationfit-for-purpose?
A key mechanism of the sustainability movement, commodity certification has proved fairly effective in the fight
against environmental destruction. But do global systems designed to drive best practice have their limitations?
Essential insight
• Certification has had plenty of success
in recent years and there is every reason
why companies should adopt targets for
certified sustainable sourcing.
• Certification is beneficial to farms; farmers
get a simple, straightforward mechanism
to help implement best practice and boost
productivity.
• But it’s important to remember that
certification has its limits. Just because
your ingredients have been certified, that
doesn’t mean the risk attached to them
has been eradicated.
• Keep encouraging certification bodies
to boost or revise their standards, rather
than just settling for “lowest common
denominator” options.
• With more and more companies going
down the certification route, going “beyond
certification” can offer a key differentiator
to your business or products.
• Certification is starting to broaden out to
include not just environmental protection,
but also tackling social issues too.
SUPPLY CHAINS IN FOCUSSUPPLY CHAIN RISK & INNOVATION
By 2000, all Chiquita-owned
banana farms in Latin America
HADEARNEDRA
CERTIFICATION
The FSC has certified more
than 187m hectares of forests
in 81 countries

2. PAGE 22
The company’s approach to agriculture
is not commonplace across Costa Rica, or
any place else for that matter. It behaves in
this way largely as a result of being certified
by the Rainforest Alliance (RA) since 1996,
ensuring it sticks to a series of environmental
and social standards as stipulated by the
NGO’s certification system. Its ability to
maintain yields and productivity – while those
of neighbouring farms steadily decline – is
testament to the positive impact certification
has had on San Alberto.
Successes
The widespread use of certification and
standards systems has helped to protect
against environmental issues such as
deforestation and overfishing, and
increasingly human rights abuses and
community land rights – and created a market
for more sustainable commodities in the
process. Organisations such as the RA, the
Forest Stewardship Council (FSC) and the
Roundtable on Sustainable Palm Oil (RSPO)
have worked tirelessly to create standards
that farmers have to meet to be able to sell
“sustainable” commodities, including palm oil,
coffee, cocoa, bananas, beef and timber.
Today, companies such as Mars and
Unilever have committed to buying 100%
of their commodity supply from certified
sources, and they can be fairly comfortable
in the knowledge that trusted standards are
helping to protect the planet’s forests. By 2000,
all Chiquita-owned banana farms in Latin
America had earned RA certification, for
example. Now, they want all of the farms from
which they source – like San Alberto – to have
the same label.
These mechanisms have been replicated
many times and used for decades, with relative
success. The FSC has 850 members and has
so far certified more than 187m hectares of
forests in 81 countries, working with 150,000
smallholder farmers. The RA claims to have
46m hectares of land under sustainable
management and has helped to train 1.3m
farmers in better agricultural techniques.
According to Nigel Sizer, the newly-
appointed president of the RA, certification
has been fundamental to turning the tide on
Costa Rica’s environmental woes. During the
1980s and 1990s, the country was suffering
the worst rate of tropical deforestation of
all countries, in terms of the percentage of
its land being logged. “It’s extraordinary
what Costa Rica and its leaders have done to
bring those rates down,” he says, describing
the country as something of a “laboratory
for sustainable agriculture and forestry”
with certification mechanisms being widely
used and supported by companies and
governments alike.
Limitations
But with 50 football fields of tropical forests
cleared somewhere in the world every minute
of every day, according to the latest World
Resources Institute analysis, is certification
having the desired effect?
Take, for example, the RSPO. It has
been in existence for the past 12 years. It has
worked really hard to encourage the global
supply chain of palm oil producers, refiners,
retailers and buyers to sign up to meet its set
criteria of what it defines as “best practice”. Its
2,000 members represent 40% of the global
palm oil sector.
And yet just 21% – 13.7m tonnes – of the
world’s palm oil is currently certified under
the RSPO system. Similarly, the 20m hectares
SUPPLY CHAIN RISK & INNOVATION SUPPLY CHAINS IN FOCUS
Costa Rica is a laboratory for
sustainable agriculture and
forestry, with certification
mechanisms widely used
50FOOTBALL
FIELDS
of tropical forests are
lost every minute of
every day
RSPO members
represent
40%OFTHE
GLOBALPALM
OILSECTOR
JUST21%OF
WORLD’S
palm oil is currently
certified under the RSPO

3. PAGE 23
of land that has been FSC-certified in tropical
countries so far is barely scratching the surface
in terms of effective forest protection.
With more than 450 different eco-labels
being used across 25 sectors, many
commentators are starting to question the
value and performance of certification. The
concept has been around for decades now. So,
why hasn’t it been able to scale up sufficiently,
to cover more ground and ensure entire
sectors are fit for the long term?
Critics such as Scott Poynton, the founder
of the NGO TFT, believes that most current
standards that certification bodies audit
against are too weak and have fallen behind
the pace of best practice being shown by
some of the leading companies. By adopting
lowest common denominator thinking, he
believes companies are given the option to
use certificates as a way of outsourcing their
responsibilities. It is something that is stifling
innovation, he says; rather than thinking
creatively about how their business is going to
develop and maintain a sustainable source of
their key ingredients, business leaders are too
heavily relying on organisations like the RSPO
and FSC to do the work for them.
In his book, Beyond Certification, he
instead advocates what he calls a “VT TV”
system (values, transparency, transformation
and verification), which would see companies
creating their own set of goals based on their
values, with the public-sharing of results
ultimately driving performance. He cites the
likes of Nestlé for adopting such an approach
– one that is starting to pay off.
Rather than get rid of certification
altogether, many more people – recognising
that it is a not a perfect solution – believe it is
a suitable starting point for addressing many
environmental and social problems. The likes
of Sime Darby, the world’s largest producer of
RSPO-certified sustainable palm oil, is part
of a growing band of companies that, while
committed to certification, would like the
option to prove they want, and are able, to
move beyond the standards being set.
Upping the ante
As such, the certification bodies have been
listening and are starting to react by evolving
the criteria by which they operate to ensure
they are more effectively doing what they set
out to do in the first place.
Responding to the number of companies
that, while adhering to its standards, had
developed policies that go beyond them,
the RSPO has introduced new voluntary
criteria to expand upon its existing principles
and criteria (P&C). To be eligible for the
add-on certification – known as RSPO
NEXT – members have to have at least 60%
of their plantations in compliance with
the core RSPO P&C requirements, have
company-wide policies that exceed current
RSPO P&C requirements, and must commit
to implementing the stricter RSPO NEXT
policies across all of their plantations.
Meanwhile, its decision to suspend the IOI
Group from its membership after seemingly
breaking deforestation rules was warmly
welcomed by critics that had previously
lambasted the organisation for showing
weakness in the face of paying members.
The RA, which audits against standards
created by the Sustainable Agriculture
Network (SAN), has also upped the ante.
A revised SAN standard, which will be
published in September 2016, offers up a more
robust set of critical criteria, as well as a series
of continuous improvement requirements
distributed at varying levels over time, making
it more accessible to more farmers that want
to make use of RA certification.
SUPPLY CHAIN RISK & INNOVATION SUPPLY CHAINS IN FOCUS
There are more than 450
different eco-labels being
used across 25 sectors
Can the RSPO keep up?

4. PAGE 24
Local, social issues
There is also more acknowledgement of the
fact that environmental and social challenges
are interconnected – and the debate and
standards-setting to tackle environmental
destruction has often been to the detriment
of social issues, such as human rights and
women’s empowerment. Commonly, labour
conditions on plantations where timber is
sourced are poor. In countries like Malaysia,
a huge population of migrant workers from
Indonesia make up a large proportion of the
workforce, but there are widespread reports
that they are treated poorly, with unfair
working conditions and low pay.
Again, the certification movement has
responded. The retailer Marks & Spencer
(M&S) has just become the first retailer to
sign up to the Seafish Responsible Fishing
Scheme (RFS), which sets out guidelines
for vessels and skippers to adhere to if they
want to demonstrate they are taking health
and safety, and the welfare of those on board,
seriously. Activists highlighting poor working
conditions of fishermen is something that has
dogged the Thai shipping sector since 2014.
Again, certification might be the answer.
The M&S commitment means that all
worldwide fishing boats supplying the retailer
will have to gain an RFS certificate by 2021,
or at least be actively working towards a
time-bound plan. The fact the deadline
for compliance is set five years from now
highlights just what the sector is up against
and just how far vessels, operating in places
such as Thailand, need to come before serious
issues are addressed.
Back in Siquirres, Guerrero is reminiscing
about a time before certification and
environmental awareness; a time when the
SUPPLY CHAIN RISK & INNOVATION SUPPLY CHAINS IN FOCUS
blue plastic bags – used widely across the
banana industry, stuffed full of chemicals
and designed to protect near-ripe bananas
from the sun and insects – were burned,
sending a host of chemicals up into the
atmosphere. It was also a time when the
widespread use of fertilisers, and absence
of protective clothing, was causing mass
infertility among the farming community
throughout Latin America.
Difficult questions
Certification – and the assessment and
auditing that goes with it – has made San
Alberto’s farm owners question all sorts of
practices that go on in the field. The workers
chopping away at banana trees now have
handles on their machetes to stop sweaty
hands being sliced unnecessarily. This is not
something required by RA certification, but
was implemented by a management team with
a new mindset.
Certification clearly has its limitations
and is not the perfect solution to dealing with
big issues such as illegal logging. There is a
need for certification bodies to keep evolving
and pushing the boundaries – not easy when
balancing the needs of the many. Developing
standards that are both achievable and
stretching will be an ongoing challenge, but
one that must be met.
It is also up to the corporate community
to encourage the development of stronger,
more robust and wider-in-scope standards,
rather than seeing certification as merely
providing a box that must be ticked.
For now, it is important to see certification
as a good solution for supporting the creation
of more sustainable commodity supply chains
– but one that has its limits. ★
M&S wants all fishing boats
supplying it to have an RFS
certificate by 2021
Certification clearly has its
limitations and is not the perfect
solution for big issuesPoor labour conditions endemic in Thai fishing fleet