Biofuel WP75German

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W O R K I N G P A P E R

Social sustainability of EU-approved voluntaryschemes for biofuels

Implications for rural livelihoods

Laura German

George Schoneveld


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Social sustainability o EU-approved voluntaryschemes or biouels

Implications or rural livelihoods

Laura German

George Schoneveld

Working Paper 75


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Working Paper 75 2011 Center or International Forestry ResearchAll rights reserved

Laura German, L. and Schoneveld, G. 2011 Social sustainability o EU-approved voluntary schemes or biouels:

Implications or rural livelihoods. Working Paper 75. CIFOR, Bogor, Indonesia

Cover photo by Agus Andrianto/CIFOR

Oil palm worker, Papua, Indonesia

This report has been produced with the nancial assistance o the European Union, under a project entitled,

Bioenergy, sustainability and trade-os: Can we avoid deorestation while promoting bioenergy? The objectiveo the project is to contribute to sustainable bioenergy development that benets local people in developing

countries, minimises negative impacts on local environments and rural livelihoods, and contributes to global

climate change mitigation. The project aims to achieve this by producing and communicating policy relevant

analyses that can inorm government, corporate and civil society decision-making related to bioenergydevelopment and its eects on orests and livelihoods. The project is managed by CIFOR and implemented in

collaboration with the Council on Scientic and Industrial Research (South Arica), Joanneum Research (Austria),

the Universidad Nacional Autnoma de Mxico and the Stockholm Environment Institute. The views expressed

herein can in no way be taken to reect the ofcial opinion o the European Union.

CIFOR

Jl. CIFOR, Situ GedeBogor Barat 16115Indonesia

T +62 (251) 8622-622F +62 (251) 8622-100

E [email protected]

www.cior.org

Any views expressed in this publication are those o the authors. They do not necessarily represent the views oCIFOR, the authors institutions or the nancial sponsors o this publication.


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Table of contents

Abbreviations v

Abstract vi

1 Introduction 1

2 Sustainability schemes for biofuels under the Renewable Energy Directive of the EU 22.1 Biouels/bioliquids and the Renewable Energy Directive (RED) 22.2 Sustainability criteria or biouels/bioliquids 22.3 Verication o compliance 32.4 Approved voluntary schemes or biouels/bioliquids 4

3 Conceptual framework and methodology 63.1 Conceptual ramework 63.2 Methodology or assessing scope and procedural eectiveness 9

4 Treatment of social sustainability by approved voluntary schemes 104.1 Scope o treatment 104.2 Procedural eectiveness 16

5 Discussion and conclusions: Implications of EU RED for the social sustainability of biofuels 20

6 References 22


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Tables

1. Overview o approved voluntary schemes or biouels/bioliquids 5

2. Social components o biouel certication programmes qualiying or EC-RED 11

Box

1. Labour criteria considered minor musts in the ISCC standard 18

List of tables and boxes


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2BSvs Biomass Biouels Sustainability Voluntary SchemeAU Arican UnionADB Arican Development BankEA Environmental AssessmentEC European CommissionEU RED European Union Renewable Energy DirectiveEIA Environmental Impact AssessmentESIA Environmental and Social Impact AssessmentESMP Environmental and Social Management PlanFNR Fachagentur Nachwachsende Rohstoe (Agency or Renewable Resources, Germany)FPIC Free, prior and inormed consentGHG Greenhouse gasGRI Global Reporting InitiativeIIED International Institute or Environment and DevelopmentIFPRI International Food Policy Research InstituteILO International Labour OrganizationISCC International Sustainability and Carbon CerticationISO International Organization or StandardizationNEAP National Environmental Action PlanNREAP National Renewable Energy Action PlanRAI Responsible Agricultural Investment

RBSA Abengoa RED Bioenergy Sustainability AssuranceRESA Rapid Environmental Impact AssessmentRSB Roundtable on Sustainable BiouelsRRS Round able on Responsible Soy AssociationSEAC Te Society o Environmental oxicology and ChemistryUNCAD UN Conerence on rade and DevelopmentUNECA UN Economic Commission or AricaUNEP UN Environment ProgrammeUN-MDG UN Millennium Development GoalsUSDA United States Department o Agriculture

WCED World Commission on Environment and Development

Abbreviations


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Te rapid expansion o biouel production andconsumption in response to global climate mitigationcommitments and uel security concerns hasraised concerns over the social and environmentalsustainability o biouel eedstock production,processing and trade. Te European Union has thusbalanced the commitment to biouels as one o theoptions or meeting its renewable energy targetsor the transport sector with a set o sustainabilitycriteria or economic operators supplying biouels toits member states. Seven voluntary EU sustainabilityschemes or biouels were approved in July 2011as a means to veriy compliance. While mandatedsustainability criteria o the EU Renewable EnergyDirective (EU RED) have a strong environmentalocus, a number o these voluntary schemes have

Abstract

social sustainability as a signicant component otheir requirements or achieving certication. Asseveral o these voluntary schemes are incipient,thereby limiting evidence on their eectiveness inpractice, we have undertaken a comparative analysiso the substantive content or scope o these schemesand the likely procedural eectiveness o the same.Findings show that some schemes have considerablecoverage o social sustainability concerns. At thesame time, three actors are likely to undermine theachievement o social sustainability through theseschemes and the EU sustainability policies lendingcredibility to them: poor coverage o some criticalsocial sustainability components, the presence oschemes lacking any social sustainability requirementsand gaps in procedural rules.


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Recent years have witnessed rapid growth in demandor biouels in the global transport sector. Tis trend isdriven in large part by increasing concerns over global

warming and by the growing economic imperativeto reduce the dependency on external ossil uels, aconcern amplied by the more recent instability in theglobal oil markets.

Te commercial production o biouels is not a newphenomenon or a product o recent technologicaladvances. Te domestic blending o biouels or usein the transportation sector has, or example, beenpart o initiatives to diversiy the energy matrix sincethe energy crises in the 1970s in countries such asBrazil and the United States. Yet with need or long-term scal support, lack o political resolve has untilrecently inhibited sector development in most parts othe world.

In recent years, as part o a reinvigorated commitmentto the renewable energy economy, a signicant

number o predominantly industrialised countries haveadopted measures to promote domestic biouel uptake.One o the most signicant and comprehensive oinitiatives to promote the incorporation o renewableenergy sources (including biouels), is Directive2009/28/EC adopted by the European Parliamenton 23 April 2009, commonly reerred to as the EURenewable Energy Directive (RED).1 As proposedin the Renewable Energy Roadmap o 2007, theEU RED mandates that 20% o the EUs energyconsumption consists o renewable sources by

2020. As part o the EU RED, all member states arerequired to derive 10% o energy in the transportationsector rom renewable energy sources by 2020; itsanticipated that most, but not all, will be derivedrom biouels.

o minimise the negative environmental impacts obiouel production and ensure compliance with theKyoto Protocol, the EU RED promulgates a set obiouel sustainability criteria with which economic

1 Te adoption o the EU RED eectively amends and repealsDirective 2001/77/EC on the promotion o electricity producedrom renewable energy sources and Directive 2003/30/EC onthe promotion o the use o biouel or other renewable uelsor transport.

operators must comply or biouels to contributetowards the 2020 target.2 One way or operators togain access to this policy-induced market opportunityis to certiy their operations under one o the voluntaryschemes approved by the EC.

As the rst and most progressive regulatory innovationo its kind, the adoption o the biouel sustainabilitycriteria throughout the EU is an important incentiveor biouel producers to adopt environmentallyresponsible production practices. With the EUprojected to become the largest importer o biouelsby 2020 with anticipated annual imports o 15.9billion litres compared to 10.8 billion litres by theUnited States (OECD/FAO 2010, Bowyer 2010) thesustainability criteria are likely to have signicant long-term global relevance. Yet with so much attention givento environmental dimensions o sustainability, what arethe likely consequences or social sustainability?

Although the EU RED generates new trade and

investment opportunities or developing countrieswith abundant agroecologically suitable land, it alsocarries a host o socio-economic risks. Biouel eedstockplantations could inringe on poorly protected (e.g.customary) rights to land and resources, leading to thedisplacement o traditional land-use systems (Germanet al. 2011). Tey could also displace or divert oodcrops to the uel sector, inducing ood price inationand/or supply constraints (FAO 2008), or lead to theabuse o international labour rights in countries with

weak regulations and poor enorcement (de Schutter

2009). Against this background, this paper assesses thesocial dimensions o the rst seven biouel sustainabilityschemes approved by the European Commission(EC) or veriying compliance o economic operators

with EU RED sustainability criteria. By so doing,we highlight the extent to which a push towardsenvironmental sustainability could undermine,rather than advance, the very rural development aims

justiying the sectors expansion in the global South.

2 While biouels are technically renewable, the cultivationo biouel eedstock has been widely criticised or driving theconversion o land with high biodiversity and carbon stocks contributing to some biouels actually having a negative greenhousegas (GHG) balance (Fargione et al. 2008, Koh and Wilcove 2008,Lapolaet al. 2010, Pleven et al. 2010).

1. Introduction


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2.1 Biouels/bioliquids and theRenewable Energy Directive (RED)

Te REDs overarching objective is to ensure thatat least 20% o the EUs gross nal consumptiono energy in 2020 consists o renewable energy.Incorporation targets dier by member state toaccount or country-specic capacities to adoptrenewable sources; Swedens target, or example,is 49%, while Maltas is only 10% (EC 2009,

Annex 1A). However, the EC has mandated each

member state to ensure the share o energy romrenewable sources in all orms o transport in 2020is at least 10% o nal consumption (EC 2009,

Article 3[4]). Each member state must developNational Renewable Energy Action Plans (NREAPs)to speciy how it will reach these targets.

Although the transportation sector can use variousrenewable energy sources to achieve this target,conventional biouels3 are anticipated to contributethe lions share (88%) by 2020 (Bowyer 2010).Between 2010 and 2020, in large part due to thismandate, demand or biouels in the EU is expectedto increase by an estimated 230% to 38.3 billionlitres. In aggregate, external (non-EU) sourcesare expected to provide 41.5% o this demand(calculated rom Bowyer 2010). In practice, however,this percentage could be higher: the NREAPs areunclear whether import gures reer exclusively toimported biouels or also imported eedstocks thatare processed into biouels domestically.

According to Atanasiu (2010), large Europeanoil-consuming economies anticipate high levelso dependency on imported biouels by 2020,including Denmark (100% dependency), the UnitedKingdom (87.7%), Ireland (70%), Greece (67%),the Netherlands (61.8%) and Germany (58.7%).

3 Conventional or rst-generation biouels are producedprimarily rom agricultural eedstocks, such as oil seed, starchand sugar crops. Second-generation biouels, on the other hand,are derived rom ligno-cellulosic materials through biomass-to-liquid conversion technologies.

While NREAPs do not speciy how bioliquids4 areexpected to be sourced, sourcing patterns are notlikely to dier signicantly rom sourcing patternsor biouels. On the basis o consumption projectionsreported in NREAPs, the ratio o biouel to bioliquidconsumption is estimated to be 5:1 by 2020. Withbiouels only recognised as a uel to be used intransport, the transportation sector is expected to bethe primary source o demand or biomass uels.

2.2 Sustainability criteria or biouels/bioliquids

o guarantee the use o biouels/bioliquidscontributes to reducing greenhouse gas emissions one o the key underlying objectives o the EURED Article 17 o the EU RED puts orth a seto sustainability criteria. Biouels/bioliquids thatail to meet these criteria are not excluded rom use;however, only those ullling these criteria counttowards the 2020 renewable energy target and are

eligible or nancial support. Te sustainabilitycriteria apply irrespective o where the eedstocksare cultivated.

Te sustainability criteria can be summarisedas ollows:

1. Greenhouse gas (GHG) emission savings rombiouel/bioliquids consumption should be at least35%, increasing to 50% by 2017. Installationsthat commence production ater 1 January 2018are required to reduce emissions by 60%.

2. Biouels/bioliquids cannot be produced romraw materials obtained rom land with highbiodiversity value. Tis includes land thatin or ater January 2008 had the ollowingstatus: (a) primary orest, (b) designatedas natural protected area, and (c) highlybiodiverse grassland.

4 As per EU RED denitions, bioliquids are liquid uelsproduced rom biomass and used or non-transport purposes(e.g. electricity and heating). Biouels, on the other hand, aredened as liquid or gaseous uel produced rom biomass usedexclusively or transportation purposes.

2. Sustainability schemes for biofuels underthe Renewable Energy Directive of the EU


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Social sustainability o EU-approved voluntary schemes or biouels 3

3. Biouels/bioliquids cannot be produced rom rawmaterials obtained rom land with high carbonstock. Tis includes land that in or ater January2008 had the ollowing status: (a) wetlandssaturated either permanently or or a signicant

part o the year, (b) orest land with trees higherthan 5 metres and a canopy cover o more than30% (or capable o achieving these values), and(c) orested land with a canopy cover o between10 and 30%, unless it can be proven that GHGemission reduction targets can still be achievedollowing conversion.

4. Peatlands cannot be converted unless it can bedemonstrated that it does not involve drainingpreviously undrained soil.

5. Te cultivation o agricultural raw materialsshould conorm to the minimum requirements ogood agro-environmental practices as specied inCouncil Regulations (EC) No 73/2009 relatingonly to EU armers.

Social sustainability in the RED is let to amechanism in which,

Te Commission shall, every two years, report to

the European Parliament and the Council on the

impact on social sustainability in the Communityand in third countries o increased demand

or biouel, on the impact o Community

biouel policy on the availability o oodstus at

aordable prices, in particular or people living

in developing countries, and wider development

issues. Reports shall address the respect o land-

use rights (EC 2009: 38).

Tese reports, the rst o which is to be submittedin 2012, must also state whether member statesand third countries that are a signicant sourceo raw material or biouel consumed within theCommunity have ratied and implemented theollowing International Labour Organization (ILO)conventions5:

1. Convention concerning Forced or CompulsoryLabour (No 29).

2. Convention concerning Freedom o Associationand Protection o the Right to Organise (No 87).

5 Te ILO Convention on indigenous and tribal peoples is notincluded in the list.

3. Convention concerning the Application othe Principles o the Right to Organise and toBargain Collectively (No 98).

4. Convention concerning Equal Remuneration oMen and Women Workers or Work o Equal

Value (No 100).5. Convention concerning the Abolition o Forced

Labour (No 105).

6. Convention concerning Discrimination inRespect o Employment and Occupation(No 111).

7. Convention concerning Minimum Age orAdmission to Employment (No 138).

8. Convention concerning the Prohibition andImmediate Action or the Elimination o the

Worst Forms o Child Labour (No 182).

Corrective action is envisioned in particular ievidence shows that biouel production has asignicant impact on ood prices (EC 2009: 28).Nothing within the Directive itsel currently holdsoperators accountable to social sustainability.However, this reporting mechanism is likely tocreate incentives or operators and the sustainabilityinitiatives to which they subscribe to be attentive

to internationally recognised labour standards andthe impacts o operations on ood prices. In 2011,the EC is planning to develop an additional seto non-mandatory criteria o unknown scope tocomplement those already in operation (EC 2011a).

2.3 Verication o compliance

o ensure sustainability criteria are ullled, memberstates require economic operators to provide prooo compliance.6 Operators can do this in one o

three ways:7

1. By gaining certifcation under a voluntaryscheme approved by the EC.A voluntaryscheme can, but is not required to, apply tospecic eedstocks or areas and any type oorganisation can promote it (e.g. government,private sector, multi-stakeholder body). An

6 Economic operators include any organisation responsibleor one or more steps in the chain-o-custody (e.g. cultivation,

processing, distribution).7 Tis includes only sustainability criteria one to our. Forcriterion ve, member states are expected to use existing controlsystems or ensuring armers meet the requirements.


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4 Laura German and George Schoneveld

approved voluntary scheme is recognised in allmember states.

2. Providing data to relevant national authoritiesthrough a national system o compliance,which each member state is required to develop.

Biouels/bioliquids approved under a nationalsystem are normally only recognised in thatcountry (EC 2011b).

3. By ulflling terms specifed in relevant bilateralor multilateral agreements with third countriesconcluded by the EC. EC decisions to this eect

would apply to all member states.

Te EC expects that the vast majority o biouelsconsumed will be certied through voluntary

schemes (USDA 2011). On 19 July 2011, the ECofcially approved the rst seven voluntary schemes,which had met the minimum requirements.8 Another18 schemes are still pending approval (EC 2011b).

As o yet, no decisions on bilateral or multilateralagreements have been made. Tat said, accordingto the USDA (2011), the United States madeadvances to the EC regarding an agreement that

would recognise US environmental protection laws.Furthermore, with most member states alling behindon transposing the EU RED into national legislation,

ew national schemes have, to date, becomeoperational.

Te recently approved voluntary schemes are,thereore, currently the most pertinent to puttingapproved sustainability criteria into operation. Teapproved voluntary schemes are valid or no morethan ve years; extensions are subject to a newdecision by the EC. Should conclusive evidence showthat a scheme ails to ollow the agreed set o rules,

8 Besides strict adherence to the RED sustainability criteria,requirements relate, among others, to the quality o theverication system (e.g. auditability, independence) and areliable mass balance system (e.g. chain o custody). For moreinormation, see EC 2010/C 160/01.

the EC may prematurely revoke the recognition othe scheme or the purpose o the EU RED.

2.4 Approved voluntary schemes orbiouels/bioliquids

A variety o dierent organisations have contributedto the development o voluntary schemes approvedby the EC (able 1). Tese range rom single-actorrenewable energy enterprises to industry consortiaand multi-stakeholder associations involvingrepresentatives rom various interest groups (e.g.non-government organisations, research institutions,government and industry). Tree o the schemesapply to all types o biouels, regardless o origin;three target exclusively the ethanol sector (two o

which pertain only to sugarcane); and one targetssoybean-based biodiesel.

Commercial biouel companies promote two o theethanol schemes, principally to ensure companysupplies meet the RED sustainability criteria and arethereby recognised and marketable throughout theEU. Te majority o approved schemes, however,

were developed through non-prot multi-stakeholderassociations (typically as roundtables). A numbero these schemes (RRS, RSB and Bonsucro) areRED customizations o existing certication systemsthat have a geographic and/or sectoral orientationbeyond the EU biouel market. However, these coreunderlying certication schemes are still works inprogress; to date, none have achieved widespreadindustry acceptance or critical mass.


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Table 1. Overview o approved voluntary schemes or biouels/bioliquids

Name Type o

promoter

Location Feedstock Geographic

ocus

Description

Abengoa REDBioenergy

SustainabilityAssurance (RBSA)

Commercialenterprise

Spain All ethanoleedstocks

Global Abengoa is one o Spains largestmulti-nationals, with a strong emphasis

on the renewable energy sector. Itsbioenergy subsidiary is the largestbiouel producer in Europe. The RBSAwas developed specically to ensurethat ethanol rom Abengoa complieswith the RED.

Biomass BiouelsSustainabilityVoluntary Scheme(2BSvs)

Industryconsortium

France All Global The 2BSvs was developed by aconsortium o French biouelcompanies and associations specicallyor the RED. The scheme is beingimplemented by the certication bodyBureau Veritas.

Bonsucro EUProductionStandard

Multi-stakeholderassociation

UnitedKingdom

Sugarcane Global Previously known as the BetterSugar Initiative (BSI), Bonsucro is aroundtable association initiated in2005 to reduce the environmental andsocial impact o sugarcane cultivation.Their EU production standardcomplements Bonsucros existingcertication scheme.

GreenergyBrazilian EthanolVericationProgram

Commercialenterprise

UnitedKingdom

Sugarcane Brazil Greenergy, a private uel supplycompany, is the principal biouelsupplier in the UK. The majority o itsethanol supplies are sourced rom

Brazilian sugarcane-based ethanol.Approval o its sustainability criteria,developed with support romProForest, has enabled the company togain access to all EU markets.

InternationalSustainabilityand CarbonCertication(ISCC)


Germany All Global The ISCC was developed through amulti-stakeholder approach, withnancial support rom the Agency orRenewable Resources (FNR). The ISCCwas accredited under the GermanBiomass Law in early 2010, the rstcertication system o its kind to be

recognized by a Member State.Roundtableon SustainableBiouels (RSB)


Switzerland All Global The RSB was ormed in 2006 and iscurrently coordinated by the EnergyCenter at the cole PolytechniqueFdrale de Lausanne (EPFL). Withmembers rom a large variety ointerest groups, the RSB is seeking todevelop a globally recognized biouelcertication system.

Round Table orResponsible Soy(RTRS) EU RED


Argentina Soybean Global The RTRS was established in 2006in Zurich, with its Secretariat nowlocated in Buenos Aires. The RTRS EU

RED complements its existing scheme,ocusing largely on soy-based biodieselrom Brazil and Argentina.

Source: Compiled rom individual websites


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3.1 Conceptual ramework

A precise denition o social sustainability that isboth comprehensive and operational is difcultto nd (Foot and Ross 2004). Much o the recentattention on social dimensions o sustainability deriverom the Brundtland Commissions denition osustainable development namely, development thatmeets the needs o the present without compromisingthe ability o uture generations to meet their ownneeds (WCED, 1987: 8). Key to this concept is an

emphasis on inter- and intra-generational equity.

Subsequent eorts to dene social sustainabilityand socially responsible investment cover a broadand unwieldy set o components rom thedevelopment assistance communitys emphasis onpoverty reduction to the international communitysemphasis on human, labour and indigenous rightsand the private sectors orientation towards sociallyresponsible investment and sustainable product liecycles (ILO 1989, 1998, UN 2007b, Benot andVickery-Niederman 2010, FAO et al. 2010). Te lasto these which operationalises social sustainabilityaccording to key stakeholder groups includes issuesas diverse as labour and human rights, communityinvolvement and development, technology andhuman resource development, consumer concernsand product responsibility, impacts on value chainactors and competitors, societal impacts, transparentreporting and economic perormance (UNEP/SEAC [no date], ISO 2010, GRI 2011).

ranslation o these wider principles o socialsustainability into a normative ramework oruse by corporations to gain social legitimacy hasinevitably simplied responsibilities or otencomplex social and economic impacts. For the sakeo analytical simplicity, we too employ a simpliedconceptual ramework or evaluating the voluntaryschemes treated in this paper. Tis conceptualramework ocuses exclusively on local impacts inproducer countries.

Our ramework draws on social sustainabilityparameters derived rom internationally recognisedstandards or labour (e.g. aorementioned ILOconventions) and development-based displacement(UN 2007a), as well as key documents romknown authorities on issues related to agriculturalinvestment, ood security and land tenure andacquisition (EC 2004, AU 2009, BMZ 2009, deSchutter 2009, FAO 2009, FAO et al. 2010, aylorand Bending 2009, Liversage 2011).

Tis approach leaves important social sustainabilitydimensions such as value chain and societal impacts(e.g. economic multipliers, revenue generation,corruption, transparency) beyond the scope oanalysis. However, it enables systematic treatmento the key social sustainability parameters treatedby the sustainability schemes that are the subjecto analysis. o bridge this gap, we touch on widersocial sustainability implications in the discussionand conclusions. Key parameters in the analytical

ramework and their scope are summarised below.

Labour rights

Biouel investments may uphold or underminedomestic and international labour laws depending onthe practices employed in the hiring o agriculturallabourers. Tese include the ollowing:

Te protection (or not) o workers rightsto organise and collectively bargain orimproved conditions.

Te practice (or not) o compulsory or childlabour and discrimination in hiring.

Te (oten exploitative) systems used to provideadvances on or deduct rom wages, and theconditions o hire (whether seasonal or ull-time,temporary or permanent, with or without ormalcontract) (de Schutter 2009).

Te practices employed by outgrowers withwhich companies have entered into contract. Tismay occur through the duration o contracts,

3. Conceptual framework and methodology


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the extent to which the conditions o loans orterms o payment are made transparent in thecontracts, or the extent to which child or orcedlabour is employed on these arms (German et al.in press).

Te key authority on labour rights is the ILO, whoseDeclaration on Fundamental Principles and Rightsat Work provides the basic guidelines or protectingthe human rights o agricultural labourers. TeDeclaration contains our core principles, backed upby their respective conventions:

1. Freedom o association and the eectiverecognition o the right to collective bargaining(Conventions 87 and 98).

2. Elimination o all orms o orced or compulsorylabour (Conventions 29 and 105).

3. Eective abolition o child labour (Conventions138 and 182).

4. Elimination o discrimination in respect oemployment and occupation (conventions 100and 111) (ILO 1998).

Te ILO Convention concerning OccupationalSaety and Health and the Working Environment

also outlines key principles or worker health andsaety (ILO 1981).

Land and resource rights

Biouel eedstock production, processing and trademay aect local land and resource rights in two ways:through the direct acquisition o titled or untitled(oten customary) land and resources by biouelinvestors, and by shaping which local rights arerecognised in the process o negotiating access (BMZ

2009, Cotulaet al. 2009, German et al. 2011).

Land and resource rights may also be aected byrestricting existing rights (e.g. through agreementsbetween investors and small-scale producers thatplace restrictions on use or employ land as collateralor loans); through o-site environmental eects; orthrough indirect eects on local land markets (BMZ2009, de Schutter 2009, German et al. 2010).

Te main social sustainability principle put orwardby various authorities is the need to recognise andrespect local land rights, both ormal and inormal.

BMZ (2009), FAO (2009) and FAO et al. (2009)recognise a number o key steps in the process orecognising local and customary land rights in thecontext o large-scale land acquisitions. Tese includethe ollowing:

Identication and documentation o all existingownership and use rights.

Voluntary, air, inormed and transparentnegotiations with all aected land users to agree

whether rights are to be transerred to investors,which rights, how this is to be done and onwhat conditions.

Fair compensation or all oregone rights.

Establishment o independent grievancemechanisms or negatively aected parties to

raise concerns.

Most authorities endorse the need to recognise allexisting use and ownership rights, both statutoryand customary, primary and secondary, ormal andinormal, individual and collective (EC 2004, AU/

ADB/UNECA 2009, de Schutter 2009, FAO 2009,aylor and Bending 2009, FAO et al. 2010). Teright to sel-determination espoused in internationalhuman rights law includes the right to reely pursueones economic, social and cultural development

without outside intererence and the principle thatno people may be deprived o its own means osubsistence (de Schutter 2009). Tis, in turn, lendssupport to ree, prior and inormed consent (FPIC)as the basis or land negotiations and suggests theneed to ensure livelihood reconstruction in thecontext o land loss.

Tis view is urther supported by FAO VoluntaryGuidelines on the Responsible Governance o enure

o Land, Fisheries and Forests (FAO 2009). Teseguidelines recognise the principle o FPIC, theneed or eective consultation with all members oa community and decision-making processes reeo intimidation. Tey urther support the notionthat agreements should be periodically reviewable(thus enabling learning); understood by all;gender-sensitive; and that indigenous people andother vulnerable groups should be provided withinormation and support so they can participateeectively. While most authorities stress the

unacceptability o involuntary displacement, severalrecognise its inevitability under certain circumstances


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in which it is deemed to be in the public interest,aligned with national and international law andcountered through ull compensation and livelihoodrehabilitation (de Schutter 2009, UN 2007a).

Food security

Biouel eedstock production, processing and trademay contribute to ood insecurity through two keypathways:

Trough increased ood prices, which may inturn result rom large volumes o ood cropsbeing shited into bioethanol and biodieselproduction; increased overall demand oreedstock with multiple end-uses; and theimpact o these two processes on supply-demandimbalances or substitute oods (Rosegrant 2008).

Large-scale land acquisitions or biouelproduction can displace local ood productionand productive resources essential to rurallivelihoods and purchasing power. Tey can alsodivert scarce productive resources (e.g. land,

water, labour) rom ood to biouel production(BMZ 2009, FAO et al. 2010).

Tese same processes can divert ood rom the

domestic to export markets, thereby increasing thedependency o producer countries on internationalmarkets to achieve ood security (BMZ 2009, deSchutter 2009, FAO et al. 2010).

Te principles or Responsible AgriculturalInvestment (RAI) suggest that potential adverseeects on ood availability, access, utilisation orstability should be countered or local and directlyaected populations. Tis could be done by ensuringequivalent access to ood, considering local dietarypreerences, increasing purchasing power throughopportunities or outgrower involvement in eedstockproduction and o-arm employment, avoiding thediversion o productive crop land away rom oodproduction, and adoption o strategies to reduceinstability o supply or example by preventing theexport o large volumes o ood when specic marketconditions occur (FAO et al. 2010).

According to the UN Special Rapporteur on the

Right to Food, investors should be required to ensurethat a minimum proportion o crops produced are

sold on local markets (with levels adjusted to theprices o ood commodities on international markets)and encouraged to establish labour-intensive armingsystems (de Schutter 2009). BMZ, on the otherhand, ocuses on the need to ensure transparency in

contract negotiations through documentation (e.g.o goals, conditions, permitted uses, amount and useo revenues), posting and monitoring (o adherenceto agreements and impacts). BMZ also emphasisesrespect or the human right to ood; internationalstandards related to the environment, labour, orceddisplacement and indigenous land rights; andcommitments enshrined in international trade andinvestment agreements.

Livelihood impacts and contributions to ruraldevelopment

Biouel investments may create a host o positiveand negative, intended and unintended impacts,as highlighted in the above sections. Tey mayalso contribute to rural development through theprovision o social services and inrastructure;through the provision o capital, technical supportor market opportunities to assist smallholderarmers in overcoming barriers to market entry;

through re-investment o land rents to supportlocal economic development; or through benet-sharing arrangements with local communities (deSchutter 2009. FAO et al. 2010, Vermeulen andCotula 2010).

International and national standards on socialimpacts are generally addressed through widelyaccepted standards related to environmental andsocial impact assessments, promulgated by the WorldBank (World Bank 1991, 1999). While most o the

aorementioned authorities stress the need to complywith national and international laws, it is only thePrinciples or Responsible Agricultural Investmentthat explicitly address the need to identiy andmitigate social impacts requiring that relevantsocial issues and risks, as well as strategies to mitigatethese and increase social benets, are identiedduring project preparation and adequately addressedby investors (FAO et al. 2010:16).

Tere is no explicit linkage between EC-RED sustainability criteria and adherence toEnvironmental and Social Impact Assessment


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(ESIA) practices. Still, those standards requiring theidentication and mitigation o social impacts and/orcompliance with national laws (most o which requireprojects to carry out EIAs) would have EIAs orESIAs as a key eature in eorts to mitigate negative

impacts on rural livelihoods. Te breadth andquality o indicators and their eective enorcement,however, is critically important or these processes toeectively contribute to mitigating the social risks obiouel investments.

FAOs Voluntary Guidelines are perhaps the leastambitious in regards to investor contributions torural livelihoods. Tey emphasise the principleo doing no harm (e.g. through displacementand dispossession o rights, violations o human

rights or undermining ood security), whilealso making positive contributions to rural andurban development, employment creation andlivelihood diversication.

Other authorities emphasise going beyond generatingimprovements to local livelihoods to ensure airsharing o benets (BMZ 2009, aylor andBending 2009), durable shared value and socialsustainability (FAO et al. 2010). Te notion o air

sharing o benets includes opportunities to benetrom growing economic rents, either by the state onbehal o the poor or directly by the poor themselves(BMZ 2009, aylor and Bending 2009).

While alternative business models are alsoemphasised, these are not panaceas; they are otensubject to similar power imbalances as large-scaleplantations. Te concept o durable shared valueincludes both the need to ensure investments areeconomically viable (to ensure up-ront livelihoods

costs are countered by uture benets) and the needor investments to generate tangible benets oraected communities, the wider project area and hostcountry (FAO et al. 2010). Social sustainability,on the other hand, emphasises the need to generate

desirable socialand distributionalimpacts (e.g.employment, technology spillovers, provision opublic goods, considering the interests o vulnerablegroups and women), in addition to avoidingincreased vulnerability.

Cross-cutting principles

Tese same authorities also mention a number ocross-cutting principles as undamental to managingthe social impacts o investments. Tese includea ocus on ensuring transparency in: processes oraccessing land; making associated investments;monitoring impacts; and in the use o revenuederived rom land transactions (de Schutter 2009,aylor and Bending 2009, FAO et al. 2010). Tey

also emphasise general processes or strengtheningcommunity-investor relations, ensuring localparticipation and providing means or recourse inparticular the need to draw on the principles andpractices o FPIC (aylor and Bending 2009, FAO etal. 2010).

3.2 Methodology or assessing scopeand procedural efectiveness

We assessed the dierent voluntary standards basedon both scope and on procedural eectiveness. Scopehere reers to the breadth and depth o treatment othe dierent concerns raised in the ramework. Wedevised a set o codes to rank the social scope o eachstandard based on the above ramework.

As evidence or eectiveness in practice is limited,this was assessed based on: (i) the extent to which keyprovisions in the scope o the standard are binding;(ii) conditionalities employed in the application o

the dierent principles and criteria; and (iii) theextent to which assessments o perormance are likelyto be independent.

Te operational eectiveness o the standard inenhancing social standards associated with biouelinvestments is assumed to result rom a combinationo both scope and procedural eectiveness.


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Tis section evaluates the scope o the dierentsustainability schemes, along with their likelyprocedural eectiveness.

4.1 Scope o treatment

On the basis o scope alone, the Roundtable onSustainable Biouels (RSB) standard clearly has thelargest number o social sustainability components(able 2). Its scope relative to the other standards,and vis--vis key components o the conceptual

ramework, suggests it constitutes a ier I schemerom a social sustainability standpoint.

Te next tier o standards, which incorporate somesocial sustainability criteria but with less breadththan the RSB, includes Bonsucro, Greenergy,International Sustainability and Carbon Certication(ISCC) and the Round able on Responsible Soy

Association (RRS).

Te lowest tier, including Biomass BiouelsSustainability Voluntary Scheme (2BSvs) andAbengoa RED Bioenergy Sustainability Assurance(RBSA), lacks any social sustainability criteria. Weinclude the lowest tier in the analysis neverthelessas an illustration o the social risks associated witheedstock and biouels that otherwise comply withEU sustainability criteria.

Cross-cutting issues

In terms o cross-cutting components o theseschemes, we observed some key dierences amongier 1 and 2 standards.

Bonsucro, ISCC and RSB all make compliancewith national laws and regulations and internationalagreements a general requirement or operators.Greenergy, on the other hand, only requireslegal compliance with those laws relating to thesustainability criteria covered by its standard; RRSonly requires compliance with national and sub-national laws.

Procedures or community consultation,communication and participation also varyaccording to the extent to which they acknowledgeand speciy the diversity o local stakeholders, thecomprehensiveness o the consultation process(e.g. over what, the process to be used and whetherdecisions must be reached by consensus) and theindependence o verication procedures (e.g. asreported by whom).

Te RSB makes gender-sensitive ree, priorand inormed consent (FPIC) the basis or allstakeholder consultation. It also chooses consensusas the method or reaching decisions with aectedstakeholders. In addition, the standard has a tool orstakeholder identication, species stakeholders to beconsulted (including locally-aected stakeholders,local leaders, representatives o community andindigenous peoples), and requires a stakeholderanalysis as part o the impact assessment process.

Bonsucro requires transparent, consultative andparticipatory processes with all relevant stakeholders,as measured through two actors: the presenceo a recognised grievance and dispute resolutionprocess and at least 90% o meetings having ledto agreements through consensus-based decision-making. Other than stating that the process shouldbe gender-sensitive and include indigenous people, itprovides little clarity on who should be consulted or

what constitutes a stakeholder.

Te Greenergy standard requires that operators haveprocedures to consult and communicate with localpopulations and interest groups on activities thatmay negatively aect their statutory or customaryrights, property, resources or livelihoods. It is thusin essence reduced to a social impact assessment andmitigation process. Furthermore, indicators andmeans o verication are restricted to the presence ocompany policies and procedures on consultation;lists o communities and interest groups; records

o consultations and the actions taken as a result oinput rom interest groups; and documentation o

4. Treatment of social sustainability byapproved voluntary schemes


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Table2

.Socialcomponentsobiouelcertifcationprogrammesqualiying

orEC-R

ED

Param

eter

Components

Bonsucro

Greenenergy

ISCC

RBSA

RSB

R

TRS

2BSvs

Cross-cutting

Compliancewithnationalandsub-nationallaws

Compliancewithinterna

tionallawsandagreements

Proceduresorlocalconsultation,communicationand

participation

/

1

Grievanceanddisputere

solutionmechanisminplace

Transparencymechanism

s

Labourrights

Compliancewithnationallabourlaws

Minimumageandchildlabour

Occupationalhealth,saetyandemergencyresponse

Righttoorganizeandco

llectivelybargain

Non-discriminationandequalopportunity

Prohibitionsonorcedandbondedlabour

Genderequityinwages

Allworkershaveacontract

Fair/legal/negotiatedwa

ge(ull-andpart-time)

Maximumworkinghoursandovertime

()

()

Natureandpermanence

ojobscreated

2

Coercion,abuse,harassm

entandintimidation

Workersinormedolabourrights

Saeguardsagainstindebtedness

Mechanismsorstafrep

resentation

Faircontractarmingpolicies/practices

Socialservicesoremplo

yees

continuedonnextpage


20/34

Param

eter

Components

Bonsucro

Greenenergy

ISCC

RBSA

RSB

R

TRS

2BSvs

Landa

nd

resour

cerights

Prooolegalownership

orlease

Proothatlandtenureis

notunderdispute

Prohibitionoinvoluntar

ylandacquisition/resettlement

()

FPICasthebasisordecision-makingontherelinquishment

o

rightsbyalllandowners

andusers

Identicationocustomarylandandresourcerights

()

Identicationopotentia

limpactsoncustomaryrights,prop

erty

andresources

()

Livelihoodbaselinesorafectedlandusers

Mitigationonegativeefectsonrights,landandresources

()

Compensationorlostassets(land,crops,economictrees,

improvements)

Compensationorlossoaccessrightstocommonproperty

resources

Livelihoodreconstructio

norland/resource-losinghouseholds

Proooefectivenesso

compensation,livelihoodreconstruction

andimpactmitigationeforts

Foods

ecurity

Assessmentoriskstoo

odsecurity

3

Foodsecuritybaseline

4

Mitigationooodsecurityimpacts

()

Enhancementolocaloodsecurity

4

Providingopportunities

oremployeestocarryouthousehold-

leveloodproduction

5

Settingasidelandinesta

tesorlocaloodproduction

5

Proooefectivenesso

oodsecurityimpactmitigationefo

rts

Table2

.Continued


21/34

Param

eter

Components

Bonsucro

Greenenergy

ISCC

RBSA

RSB

R

TRS

2BSvs

Livelih

ood

impacts

andru

ral

develo

pment

Mechanismsorensuringtheeconomicviabilityotheinvestment

()

Socialimpactassessmen

t

6

()

Mitigationonegativeso

cio-economicimpacts

6

Investmentindurablesh

aredvalue(e.g.protsharing,

smallholderbusinessmo

dels)

7

Improvementsinsocio-e

conomicstatus

2

Specialprogrammesben

etingvulnerablegroups

2

Preerentialemploymentpractices

2

Preerentialgoodsandserviceprovision

Skillstrainingand/orsup

porttoextension

2

Mitigationonegativeefectsomechanization

2

Contributionstosocialservicesandinrastructure

7

1TheRSBstandardmakesree,priorandinorm

edconsentthebasisorallstakeholder

engagementandconsultationprocesse

s(Principle2,Criterionb).

2Applicabilityrestrictedtoregionsopoverty.

3Throu

ghalivelihoodimpactassessmentlens.

4Applicabilityrestrictedtoregionsooodinse

curity,andwithintheseregionstodirec

tlyafectedstakeholders.

5Optio

naloneoseveralpossiblemeanstocomplywithCriterion6binregionsooo

dinsecurity.

6Forth

eRSBstandard,ascreeningprocesstoidentiysocialrisksandanenvironmenta

landsocialmanagementplanarerequiredoralloperators.AnEnvironmentala

ndSocialImpact

Assessm

entorRapidEnvironmentalandSocialA

ssessmentarealsorequiredincaseswh

erethescreeningprocessidentiessign

icantrisks.

7Oneo

severaloptionsoroperatorsworkinginaregionopoverty.

Note:Th

esizeothesquaresindicateshowcomprehensivethestandardis,relativetoth

eaboverameworkandtootherschemes;thebracketsindicatesocialdimensionsthatcouldbe

addressedindirectly,throughotheractivities.

=

high,=moderate,=low

Sources:RSB(2010a,2010b,2011a),RTRS(2010,

2011a),AbengoaBioenergy(2011),2BSVS(2011),Bonsucro(2011),Greenenergy(2011a),ISCC(2011b)

Table2

.Continued


22/34


plans oractions to mitigate negative impacts. Testandard is limited in three ways: its specication o

who should be consulted (with gender conspicuouslyignored), its mode o consultation (consultation andcommunication rather than consent), and in regards

to outcomes that should be achieved.

Te ISCC standard does little to ensure eectivecommunity relations outside o the ollowing:a complaint orm or mechanism or aectedcommunities and a commitment to engage in acontinued dialogue around issues highlighted in asocial impact assessment.

Te RRS standard requires evidence ocommunication channels and dialogue, but restricts

this to matters relating to soy arming and itsimpacts. Furthermore, it does not go beyond thecommunity in speciying who should be involved.

And like ISCC, a grievance mechanism must existbut does not need to be considered legitimate by allinvolved parties.

Te RSB standard goes the urthest in speciyingwhich stakeholders must be considered underdierent principles and indicators. Yet loopholes exist

in all standards in ensuring eective consultation(and consent/consensus) o all aected households exposing the process to deciencies in coverage andrepresentation.

ransparency commitments are limited or allstandards. RSB and Bonsucro require transparencyin the context o social impact assessment, andBonsucro proesses a commitment to inormationdisclosure on operators social perormance tostakeholders. While Bonsucro also mentions this as

a value to be upheld within stakeholder engagementprocesses, it is absent in indicators or evaluating theperormance o these processes.

Labour rights

Tose standards which cover labour rights allrequire compliance with national labour laws andinternational conventions related to child labour;non-discrimination; occupational health and saety;the right to organise and collectively bargain;and orced labour. Tis relatively strong and eventreatment o the undamental labour standards is

likely in response to the EC-REDs intention tomonitor producer-country compliance with thesesame conventions. Interestingly, only the RSBstandard commits to gender equity in wages, withGreenergy, ISCC and RRS committing to non-

discrimination in the orm o equal pay or work oequal value (in line with ILO Convention 100).

All other labour-related commitments o operatorsall outside the realm o EC-RED monitoringcommitments.

Regarding wages, the Bonsucro, Greenergy, RSB andRRS standards require that all workers, irrespectiveo status (migrant, seasonal, contract), receive at leastthe minimum wage (or, in the case o Greenergy, the

higher o the minimum wage and industry standard).In addition to requiring the national or industryminimum wage, the ISCC requires wages to besufcient to meet basic needs o personnel and toprovide some discretionary income. While only theISCC, RSB and RRS have explicit commitmentsto maximum working hours, commitments tocompliance with national labour laws in theBonsucro and Greenergy standard would presumablyachieve this indirectly. Only the ISCC species that

overtime must be paid at premium rates.

Regarding the provision o social services oremployees, the ISCC requires that operators provideprimary schools or children o employees but leavesother services at the discretion o the operator. Asiderom requiring that workers basic needs are met,Greenergy only requires adequate and accessible(physically and nancially) medical care withoutspeciying who provides or pays or it. Otherstandards make no such commitments.

Notable gaps in labour requirements or moststandards include job quality, saeguards against debtbondage to employers and contract arming practices.

While the RSB standard commits to year-round orlong-term job creation, this only applies to regions opoverty and is one o several options at the discretiono operators.

Greenergy and RRS partially address the risk odebt bondage, either by ensuring that housing and

other benets are not automatically deductedrom wages as an in-kind payment (Greenergy) or


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by ensuring salary is not deducted or disciplinarypurposes (RRS). ISCC is the only standard tocommit explicitly to air and transparent contractarming arrangements, though what these termsmean is unclear. None o the standards include

requirements or those sourcing rom non-contractedsmallholders.

Land and resource rights

O those standards that address customary landrights in one way or another, most do so in a veryrestricted way.

Bonsucro, ISCC and RRS require that operatorsshow proo o legal ownership or lease. Additional

requirements include the ollowing: proo that landis not under dispute (Bonsucro), a commitmentto mitigate negative impacts on rights, land andresources (ISCC), and compensation or customaryrights in cases o disputed use rights (RRS).

Greenergy, ISCC and RSB standards each makethe identication and mitigation o impacts oncustomary rights, property and resources an explicitrequirement. However, the Greenergy and ISCC

standards have little teeth in this regard: the ormerrequires only that plans are in place to managepotential impacts on legal and customary rightsand the latter demands documentation o regularmeetings with communitieswith listed risks and/or impacts and evidence o negotiations orresolution processes. Te social impact assessmentprocesses required by Bonsucro could achieve thisindirectly; however, the limited scope o socialcriteria in national environmental impact assessmentprocesses in many countries is likely to undermine

the eectiveness o this mechanism in practice.

Customary rights protections may also be achievedby prohibiting involuntary displacement, a criterionmade explicit only in the RSB standard. ForGreenergy, this is implicit and indirect achievedthrough the evidence it requires rom operators onegotiated agreements (documented agreementsbetween local people and the government or minuteso negotiations with investor). While the Bonsucrostandard also requires transparency and participatoryconsultation or new projects or expansion, theliterature suggests this cannot be assumed to preclude

involuntary displacement or a number o reasons.Tese include the tendency or political manipulationby government or industry and deerence o localpeople to government and chiey authority (Germanet al. 2011).

Customary rights protection can also be strengthenedby requiring operators to identiy customary land andresource rights and through adequate consultationand compensation o all land users aected by landacquisition.

Both Greenergy and RSB standards require thatoperators identiy and document legal and customaryrights, while RRS only requires this in caseso disputed use rights. Te ISCC standard only

species that operators must identiy existing landrights, without clariying whether this includes bothstatutory and customary rights.

RSB also goes the urthest in requiring FPIC as thebasis or all negotiations, compensation or lost assets,livelihood reconstruction o all aected householdsand mechanisms (livelihood baselines, monitoring)to assess the eectiveness o impact mitigation andlivelihood reconstruction eorts.

All standards ail to protect and compensateadequately or loss o access to common propertyresources. While the RSB standard requirescompensation or minor orest products, operatorminimum requirements and compliance indicators(what their perormance is ultimately measuredagainst) make no mention o this.

Food security

Regarding ood security impacts, the RSB standardis the most comprehensive in scope. However,the ISCC standard has the strongest commitmentto mitigate ood security impacts, expressing acommitment to neither displace staple cropsnor impair local ood security/prices. In areasdesignated as regions o ood insecurity, the RSBstandard requires ood security baselines, proo o theeectiveness o impact mitigation eorts and eortsto enhanceood security. For Greenergy, ood securityimpacts are not treated explicitly but may emergethrough mandated local consultation and impactassessment and mitigation processes.


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Livelihood impacts and rural development

Tose standards encompassing livelihood impactsand rural development considerations mostcommonly address this through social impactassessment and mitigation strategies.

While the Bonsucro standard requires mitigationo negative social impacts, the eectiveness rests onthe scope o recognised ESIA processes includingnational legislation, where present. I nationallegislation ails to cover a broad range o socialcriteria and indicators, these processes may be highlyineective in mitigating negative social impacts.

Te ISCC standard also requires impact mitigation,stating that, all impacts or surrounding communities, users and land owners must betaken into account and sufciently compensatedor. However, the description that ollows onlyrequires documentation o regular meetings withcommunities to highlight the risks, impacts andresolution processes.

Te RRS standard only requires a review process toidentiy where improvement is desirable. Indicatorsto monitor perormance are at the discretion o

economic operators and no local participationis mandated.

RSB and Greenergy go the urthest in this regard,requiring the assessment and mitigation o allnegative local socio-economic impacts. RSB has aseparate set o comprehensive methodologies orcarrying out various types o impact assessments.However, as these are not considered normative,they do not serve as the basis or verication ocompliance. It thereore seems that, across the board,

operators have signicant leeway in determiningwhat impact mitigation activities will be carried out.Rural and social development may also be urtheredthrough mechanisms to ensure the economic viabilityo the enterprise (to enhance the likelihood ogenerating long-term economic spillovers to localcommunities); skills training, extension and specialprogrammes to oster local economic development;preerential employment to negatively aected

stakeholders; value- or prot-sharing initiatives; and/or the provision o social services and inrastructure.

Only the RSB standard includes a seriouscommitment to long-term economic viability;it requires operators to prepare a comprehensiveeconomic viability analysis and conduct continuousmonitoring and improvement o their operations.

While Bonsucro commits to economic sustainabilityat the level o criteria, this only boils down tomonitoring the value added per tonne o caneproduced; as an ex-postmeasure, this is unlikely to beeective as a saeguard against risky investments.

And with the exception o Bonsucros commitmentto supporting research and extension (withunspecied allocations between them), it is onlyRSB that extends into the other domains o rural

and social development albeit only partially andconditionally (with several commitments being oneo multiple options or operators working in regionso poverty).

4.2 Procedural efectiveness

Te principles, criteria and indicators go a longway in helping assess the extent to which negativesocio-economic impacts will be eectively mitigatedand the potential o the industry as an engine orural development will be realised. However, theconditions under which these requirements comeinto eect and mechanisms or ensuring complianceare also critical. Tis section explores the likelyprocedural eectiveness o social sustainabilityprovisions through a wider look at the proceduralrules governing the application o each standard. Tisassessment can only be made or ve out o the sevenstandards, since neither the RSBA nor the 2BSvsstandard incorporate any social sustainability criteria.

Te RSB represents the most ar-reaching standard interms o the scope o treatment o social indicators.Te RSB standard also makes compliance withEU RED additionalto the requirements o theexisting standard, thereby ensuring emphasis onenvironmental criteria does not undermine the socialrequirements o the standard. However, a numbero requirements do not apply to all operators.For example, procedural rules speciy who mustcomply with environmental and social impact


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assessments and with Principles 5 and 6 (rural andsocial development, ood security); this subjectsthe standards eectiveness to related decision rulesand processes.

First, all operators must conduct a screening processto determine the necessary scope o work to ensurecompliance with the RSB standard, but subsequentsteps are conditional upon the ndings o thescreening.9 With the economic operators themselvesresponsible or conducting the screening, the mainlimitation is lack o independence and specialisedexpertise in the identication o impacts.

Secondly, it is only or operations located in aregion o poverty or region o ood insecurity

that specialist impact assessments must be carriedout and operators must contribute to local socialand economic development (Principle 5, criteria aand b) or enhance the local ood security o directlyaected stakeholders (Principle 6, criterion b). Tus,it becomes undamental to come up with an eectiveand unambiguous denition o these regions anextremely complex task.10

A nal actor inuencing compliance with key social

provisions in able 2 is the tendency to provideoperators with options or how they will comply,such as ways to improve the socio-economic status oaected stakeholders (criterion 5a). On the one

9 Should the screening tool indicate that any impacts are likelyto be signicant, operators may be required to carry out anEnvironmental and Social Impact Assessment (ESIA), a RapidEnvironmental Impact Assessment (RESA) and/or any numbero specialist impact assessments. Te screening tool is thereorecritical to the eective management o social and environmentalimpacts. Its eectiveness in identiying major impacts associated

with large-scale plantations is likely to be enhanced by the actthat specialist impact assessments are triggered when operatorsanswer yes to any one o multiple questions to screen orpossible impacts; and each specialist impact assessment issubject to a subsequent audit (RSB 2011b). Furthermore, alloperators are required to develop an Environmental and SocialManagement Plan (ESMP) through stakeholder consultation;this outlines strategies to mitigate negative impacts and tomanage and monitor environmental and social risks, irrespectiveo screening outcomes.

10 A set o independent technical experts is developing mapsto avoid ambiguities in the identication o these regions,based on a combination o FAO data on the prevalence oundernourishment, UN-MDG data on the percentage o thetotal population living below the national poverty line, measureso income inequality (the Gini index) and the IFPRI globalhunger index.

hand, this may enhance exibility so as to help adaptinterventions to local circumstances. On the other,it may also give operators incentive to opt or theleast-cost option and thus undermine the spirit onegotiated agreements.

Procedural eectiveness under the ISCC standard isbest evaluated through a look at the minimum seto requirements and the auditing process. ISCCsSystem Basics only reers to our sustainabilityrequirements (ISCC, 2011c), which map exclusivelyonto its environmental criteria. However, reerenceis made here and elsewhere (ISCC, 2011a) to a ullset o social and environmental sustainability criteriaoutlined in ISCC 202: Sustainability Requirementsor the Production o Biomass (ISCC 2011b). While

this suggests the need or compliance with all criteria,the ISCC standard classies criteria according totheir importance or relevance into major mustsand minor musts. For all major musts, complianceis mandatory. For minor musts, only 60% o criterianeed to be ullled or a successul audit. Nine othe 12 indicators relating to sae working conditions(Principle 3) are classied as minor musts, as are 15out o 20 indicators on human, labour, and landrights (Principle 4). Indicators classied as minor

musts include such undamental issues as negativesocial impact mitigation and compensation; therequirement that biomass production does not impairood security; air and transparent contract armingarrangements; complaint mechanisms and conictmedication; and a host o labour criteria (Box 1).

Further weaknesses in ensuring compliance withthe ISCC standard relate to the auditing process.Countries that have ratied the relevant ILOConventions are assumed to have ullled the social

requirements in Principle 4 unless the auditorconcludes dierently in his/her risk assessment (ISCC2011b). Tus, the only social criteria requiringexplicit monitoring are those in Principles 3 (sae

working conditions and plant protection producthandling) and 5 (compliance with national andinternational laws, proo o land ownership/lease).

Despite these shortcomings, the quality requirementsor auditors are considerably more stringent thanor the other schemes. For example, they detail

specically who is suitably qualied to perormdierent types o assessments. Moreover, unlike the


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RSB, the ISCC has put in place clear proceduresand guidelines to support small-scale producersin obtaining group certication (e.g. certicationo an organised group o producers rom similarproduction systems). Tis is an important

contribution to reduce the economic and technicalbarriers small-scale operators oten experience inseeking certication.

Analysis o the likely procedural eectiveness oGreenergys social criteria reveals other concerns.Tere are minor loopholes within the auditingprocess in terms o permitted minor non-compliances(involving temporary or unusual lapse o limitedimpact and or which corrective action has beentaken). However, the most signicant concern lies ina statement about minimum requirements namely:

In practice, the introduction o the RED

requirements means that the new minimum

requirement or compliance only covers aspects

o the standard related to land-use change

(impacting on biodiversity and carbon),

which are covered in Criterion 1.1, 2.1, 2.2

and 2.3 in the Greenergy standard. (Greenergy,

2011b: 2)

While it remains to be seen how this will beinterpreted in practice, the statement appears to wipeaway all social sustainability criteria o the initialstandard as originally applied to gain access to theUK market.

Like the RSB, the RRS makes EU REDsustainability requirements additional to the existingstandard (RRS 2011b). As with Greenergy, thereare minor loopholes within the auditing processin terms o permitted minor non-compliances ornon-conormities. However, all o these must beaddressed in a timely manner to avoid escalation toa major non-conormity and loss o certication. Ingeneral, the standards procedural aspects do not seemto water down the overall eectiveness as determinedby its scope. Te RRS is the only other schemebesides the ISCC to have put in place comprehensiveprocedures and guidelines or group certication.

Several documents posted on the EU RED websiteor Bonsucro are not legible, undermining thepossibility o a complete evaluation o proceduraleectiveness. Still, the Bonsucro website provides alimited basis or evaluation. o obtain a Bonsucro EUcerticate, operators must comply with only 80% o

the indicators in Principles 1 to 5 (covering all socialdimensions o the standard) and section 7 (chain

Box 1. Labour criteria considered minor musts in the ISCC standard

Presence o health, saety and hygiene policy and procedures

First Aid kits at all permanent sites and in the vicinity o eldwork

Clear identication o potential hazards

All workers received adequate health and saety training, are inormed o identied risks

Clean ood storage areas and designated dining areas, hand washing acilities and drinking water

On site living quarters are habitable and have the basic services and acilities

The accident procedure posted within 10 meters o chemical storage acilities

Facilities to deal with accidental operator contamination

Person responsible or workers health, saety and good social practice and elected individual(s) have knowledgeo or access to national labour regulations/collective bargaining agreements

Regular two-way communication meetings between management and employees

Democratically elected worker representative to represent the interests o sta to management

All employees are provided with air legal contracts

Presence o a time recording system to show daily working time and overtime or all employees

Working hours and breaks comply with legal regulations and/or collective bargaining agreements

Other orms o social benets are oered by the employer to employees, their amilies and/or community


27/34


o custody requirements), and comply ully withsection 6 (mandatory environmental requirementsunder EC RED).11 As with the ISCC standard, thereare concerns this could provide incentives to comply

with the easiest or lowest cost indicators, thus

marginalising indicators o more critical relevance torights protections and rural livelihoods.

A number o cross-cutting observations should alsobe made. Experiences with National EnvironmentalImpact Assessments (NEIAs) point to some othe inherent limitations in the use o normativeguidelines to mitigate social and environmental risks.One study (World Bank 1996) pointed to a numbero limitations o both Environmental Assessments(EAs) or Bank-nanced projects and National

Environmental Action Plans (NEAPs). Tese includethe ollowing:

Problems o timing (the EA coming too late inthe process to inuence project design, reducingits scope to one o impact mitigation).

Emphasis on comprehensiveness over systematictreatment o major threats.

Inconsistencies in evaluations o risk level.

Insufcient integration o EA provisions intoproject implementation.

11 http://www.bonsucro.com/standard/eu_verication.html(15 Aug 2011).

Insufcient supervision to detect impactsemerging through project evolution.

Limited local ownership o the process.

Where these inherent deciencies meet with a culture

o approval, this can relegate the environmentalassessment process to a mere ormality.

Similar limitations may inuence the eectiveness ovoluntary schemes in ensuring eective mitigationo social risks and meaningul contributions toeconomic development. Much also rests on theactors below (Ebaa Atyi and Simula 2002; Klooster2006; Rametsteiner and Simula 2003):

Attitudes and competence o the operator.

Financial viability o the operation. Ability to strike an eective balance between

specication and exibility to adapt to localcircumstances.

Ability o more powerul actors to shapeprocesses and outcomes.

Audit quality including the ability o whatare oten very brie (one- to two-day) audits tocapture non-compliances.


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On the basis o the scope o the evaluated standards,two out o the seven approved voluntary schemes(Abengoa and 2BSvs) take a minimum complianceapproach with EU RED and are devoid o anycommitment to social sustainability. Both o thesestandards are global in scope and collectively cover allbiouel eedstocks. In theory, then, they could enablea situation in which all biouels complying withmember state commitments to renewable energy lackany social sustainability.12

Considering that another 18 schemes are pendingapproval, there are likely to be additional avenues orsocially unsustainable projects to gain certicationand, thereby, legitimise their practices. Most EUmember states have national legal rameworks withstrong saeguards that eectively guarantee the socialsustainability odomesticallyproduced biouels; thesame cannot be said about biouels imported romcountries with weak governance systems unableto oset these certication gaps. Tis eectively

places the climate mitigation interests o developedcountries as the sole metric or evaluating theperormance o eedstock sourced rom the globalSouth in essence, ignoring the national aspirationsenshrined in domestic policies that place social andeconomic development at the oreront.

Tis threat cannot be overstated: at least 41.5% oEU biouel consumption in 2020 is anticipated to bederived rom imports, most o this rom developingcountries. For example, historically, the soybean

sector in Latin America and the oil palm sector inSoutheast Asia (and more recently the jatropha sectorin Arica) have been raught with social conict. Onthe basis o current and projected EU consumptionpatterns, biodiesel derived rom these eedstocks islikely to constitute the bulk o imports in the longrun (Bowyer 2010, USDA 2011). Proactive eortsare needed to lobby or the inclusion o developing-country aspirations within EC RED sustainability

12 Although Abengoa does not yet seem to be open to alloperators, 2BSvs is opening the door or all suppliers to beminimally compliant.

criteria through the incorporation o additionalcompliance criteria emphasizing social and economicdevelopment and by mandating compliance withnational laws.

Among those schemes that set the bar higher,commitments to rural development, smallholderbusiness models and generating durable shared-valueare conspicuously weak. With the exception o theRSB (which goes ar beyond mitigating negativeimpacts)13, the main emphasis is on mitigatingnegative socio-economic impacts. Tis places allbut one o these standards in stark contrast to theambitious claims about the industrys potentialto stimulate to local economic development inproducer countries. Unortunately, due to itscomprehensiveness (and associated cost andcomplexity), the RSB is likely to attract only thosecompanies that are already largely compliant withits principles and which can thereore benet romrelated reputational gains at limited cost.

A second key observation is that, in practice, theprocedural rules put orward by the various schemes(e.g. or assessing who must comply, and with whichsocial criteria) are likely to urther undermine theireectiveness in achieving social sustainability.

For standards such as Bonsucro, Greenergy, RSB andRRS that existed prior to EU RED, the schemesvary in the extent to which EU market requirementsare considered additional to or water down the social

sustainability provisions o the existing standard;Greenergy and RSB are on opposite ends o thespectrum in this regard.

While Greenergy appears to have watered down itsstandard or EC compliance, the two other industry-led schemes lack any social sustainability criteria.Tis illustrates the critical importance o policies inconsumer markets in giving teeth to the voluntaryschemes led by commercial actors. Furthermore, EU

13 And the RRS, which lacks a comprehensive social impactassessment process.

5. Discussion and conclusions: Implications ofEU RED for the social sustainability of biofuels


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consumer markets must accept all seven voluntaryschemes, regardless i they are less stringent thanmember state requirements preceding them.14 Tesetwo acts together suggest the critical importance orthe EU to set the bottom line higher. Tis may be

done by incorporating social sustainability criteriainto EU RED and enabling greater exibility ormember states to set their own bar higher than theminimum criteria legislated by the bloc.

Schemes led by multi-stakeholder processes alsoseemingly provide signicant wiggle room oroperators. Yet they also seem to be leading to moreconcerted eorts to address social sustainabilityconcerns in a way that is at least minimallyresponsive to national laws and international

agreements. Leadership o the RSB standard byan academic institution is also notable in its morerigorous treatment o social sustainability criteria.Ultimately, the ability o even those standards withthe most ar-reaching treatment o social principlesto advance social sustainability eectively will dependon interpretation and compliance something thatcan only be evaluated in practice.

14 Tis in eect eliminates the sovereignty o memberstates in managing the social sustainability o biouels theyconsume within their own borders, urther eroding the alreadydecient ability o consumers to discriminate among labels(Wynne 1994).

o conclude, some schemes have considerablecoverage o social sustainability concerns. Yet threeactors undermine the likelihood o achieving socialsustainability through these schemes or the EUsustainability policies lending credibility to them:

poor coverage o some critical social sustainabilitycomponents, the presence o schemes lacking anysocial sustainability requirements (creating incentivesor a race to the bottom in social practices) and gapsin procedural rules.

Tis analysis, coupled with a rapidly expandingliterature on the negative local social and economicimpacts o biouels, suggests that urgent actionis needed. Social sustainability concerns mustbe incorporated into the requirements o major

consumer markets, thus bringing new schemesinto compliance and expanding the scope o issuestreated. Tis aim can, in turn, be advanced bygenerating evidence about the actual socio-economicimpacts associated with operators certied by EU-approved voluntary schemes and by bringing these tothe attention o key decision ora within and outsideo the EU.


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