Implementing Sustainability Commitments For Palm Oil In Indonesia
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Implementing sustainability commitments for palm oil in Indonesia by Luttrell, C.,Komarudin, H.,Zrust, M.,Pacheco, P.,Limberg, G.,Nurfatriani, F.,Wibowo, L.R.,Hakim, I.,Pirard, R. Pdf
The palm oil sector in Indonesia has seen the adoption of zero deforestation commitments by the larger companies in the form of various pledges around No Deforestation, No Peat, and No Exploitation (NDPE). At the same time, at the national and sub-nationa
Risky business: Uptake and implementation of sustainability standards and certification schemes in the Indonesian palm oil sector by Sophia M Gnych,Godwin Limberg,Gary Paoli Pdf
Evolving international sustainability norms demand greater environmental and social responsibility from business across global commodity chains – from countries of origin to countries of consumption. Conventional commandand-control regulation has had limited success in addressing negative environmental and social impacts. As a result, advocacy groups and NGOs have championed a diversity of market-based and multi-stakeholder governance approaches aimed at shifting the private sector towards delivering more sustainable business models. Multiple non-state, market-driven social and environmental standards have emerged for palm oil. Through interviews with growers and key stakeholders in the Indonesian palm oil industry this occasional paper explores the motivations driving the uptake of sustainability standards, as well as the factors supporting and preventing implementation of sustainability standards, and asks, what model of sustainable oil palm agriculture is ultimately being built?
Zero-deforestation commitments in Indonesia: Governance challenges by Romain Pirard,Sophia Gnych,Pablo Pacheco,Steven Lawry Pdf
Highlights Zero-deforestation commitments are emerging rapidly in Indonesia. They already encompass a large portion of crude palm oil production and almost all the pulp and paper (P&P) sector; typically, they reflect the values of the no-deforestation, no-exploitation (social) and no-peat policies.These commitments depend on definitions of forests for their identification and conservation, which in turn rely on methodologies such as High Conservation Value and High Carbon Stock.Early implementation has revealed that the palm oil sector is facing a number of governance challenges to achieve commitments: the legal framework is not systematically supportive of the pledges, and the government promotes a different vision of sustainability. Of note is the fact that the P&P sector is more advanced.Integration of smallholders into sustainable value chains poses another challenge for the palm oil sector: traceability, better environmental performance and improved yields require urgent action. Legalization of smallholder operations is critical and goes beyond commitments, because it determines access to financing and certification, among others.To be effective, zero-deforestation commitments must align public and private governance arrangements. This requires an agreement on visions of sustainability supported by public policies; progress on land tenure; enforcement of progressive regulations at national and regional levels; and the implementation of strong policies to rationalize the expansion of small and medium holdings of oil palm.Legacy issues must also be addressed for the main palm oil and P&P groups: land restitution through due processes, support to smallholders and investments in land restoration are some promising avenues worth pursuing.
A policy network analysis of the palm oil sector in Indonesia by Pirard, R.,Rivoalen, C.,Lawry, S.,Pacheco, P.,Zrust, M. Pdf
The palm oil sector has been targeted by NGOs for its alleged negative environmental and social impacts. In this regard Indonesia represents a major challenge because it is home to some of the largest tropical forests in the world. A recent wave of corporate sustainability commitments peaked with the New York Declaration on Forests in September 2014, which emerged amidst the development of other standards and initiatives toward sustainable palm oil production. This process has made this field very complex, especially in Indonesia. The present study aims at clarifying the positions taken by the various stakeholders and assesses the level of political support and the functioning of policy networks. Results from our Policy Network Analysis based on the survey of 59 institutions representing all types of stakeholders (e.g. government, corporate, NGO) at all levels (international, Indonesian and local) show that standards and initiatives for sustainability have contrasting visibility and impact among stakeholders. In this context, RSPO stands as a reference, with the efforts by the Government of Indonesia to promote its own standard with ISPO yet to gain traction. While IPOP was a well-appreciated initiative and a symbol of zero-deforestation commitments, opposition to it by the government and conflicting interests have resulted in its disbandment. Overall, the lack of progress for sustainable palm oil practices on the ground, in the view of respondents, seems to be caused by political and legal barriers rather than technical challenges or economic losses at a country level.
The palm oil global value chain by Pacheco, P.,Gnych, S.,Dermawan, A.,Komarudin, H.,Okarda, B. Pdf
There is abundant literature focusing on the palm oil sector, which has grown into a vigorous sector with production originating mainly from Malaysia and Indonesia, and on increased palm oil consumption in many countries around the globe, particularly European Union states, China and India. This sector expansion has become quite controversial, because while it has negative social and environmental impacts, it also leads to positive benefits in generating fiscal earnings for producing countries and regular income streams for a large number of large- and small-scale growers involved in palm oil production. This document reviews how the social, ecological, and environmental dynamics and associated implications of the global palm oil sector have grown in complexity over time, and examines the policy and institutional factors affecting the sector's development at the global and national levels. This work examines the geographies of production, consumption and trade of palm oil and its derivatives, and describes the structure of the global palm oil value chain, with special emphasis on Malaysia and Indonesia. In addition, this work reviews the main socioenvironmental impacts and trade-offs associated with the palm oil sector's expansion, with a primary focus on Indonesia. The main interest is on the social impacts this has on local populations, smallholders and workers, as well as the environmental impacts on deforestation and their associated effects on carbon emissions and biodiversity loss. Finally, the growing complexity of the global oil palm value chain has also driven diverse types of developments in the complex oil palm policy regime governing the sector's expansion. This work assesses the main features of this emerging policy regime involving public and private actors, with emphasis on Indonesia. There are multiple efforts supporting the transition to a more sustainable palm oil production; yet the lack of a coordinated public policy, effective incentives and consistent enforcement is clear and obvious. The emergence of numerous privately driven initiatives with greater involvement of civil society organizations brings new opportunities for enhancing the sector's governance; yet the uptake of voluntary standards remains slow, and any push for the adoption of more stringent standards may only widen the gap between large corporations and medium- and smallscale growers. Greater harmonization between voluntary and mandatory standards, as well as among private initiatives is required. Commitments to deforestation-free supply chains have the potential to reduce undesired environmental impacts from oil palm expansion, and while this risks excluding smallholders from the supply chains, such commitments may function to leverage the upgrading of smallholder production systems. Their success, however, will require greater public and private sector collaboration.
Deforestation-free commitments by Romain Pirard,Akiva Fishman,Sophia Gnych,Krystof Obidzinski,Pablo Pacheco Pdf
The deforestation-free movement (or zero-deforestation) has emerged recently in a context of lower state control, globalization and pressure on corporations by nongovernmental organizations (NGOs) through consumer awareness campaigns, acknowledging the essential role of agricultural commodities in deforestation. It takes the form of commitments by corporations to ensure that the products they either produce, process, trade or retail are not linked to forest conversion. This movement has particular relevance for Indonesia. Ambitious targets have been set with concrete action on the ground, and typically go beyond forest conservation to also include peatland management and social issues. Regarding the zero-deforestation component, its implementation relies essentially on two complementary methodologies: High Conservation Value Forest (HCVF) and High Carbon Stocks (HCS).
Towards responsible and inclusive financing of the palm oil sector by Kusumaningtyas, R.,van Gelder, J.W. Pdf
The global palm oil sector faces ongoing threats to sustainability caused by deforestation, peatland development, labor rights violations and land right conflicts. Additionally, integrating smallholders into sustainable palm oil supply chains continues to be a challenge for the industry. Financial service providers (FSPs) could play a role in stimulating sustainability commitments from the palm oil companies they finance. Their potential influence stems from their capacity to set environmental, social and governance (ESG) conditions for financial services. This research shows that European and US FSPs are further along than their counterparts in Asia in adopting policies that include ESG risk assessments as part of the process for providing financial services. However, attention to smallholder inclusion is insufficient in the policies of all FSPs included in this report. Differences between European and US versus Asian FSPs in adopting ESG standards, as well as the unique markets they finance, present a risk that two parallel but separate financial systems could emerge. Efforts by both government and nongovernmental organizations should emphasize the prevention of a two-tiered marketplace with different quality requirements for palm oil. All actors in this sector still require a significant shift in thinking on the benefits of including ESG standards in cultivation and production processes. In palm oil producing countries, the lack of specific banking regulations emphasizing sustainability concerns regarding the sector forms a further hindrance to positive developments.
Palm oil and likely futures by Mosnier, A.,Boere, E.,Reumann, A.,Yowargana, P.,Pirker, J.,Havlik, P.,Pacheco, P. Pdf
Key messages This brief examines two contrasting policy options: the implementation of zero deforestation commitments by the private sector and a complete moratorium on the expansion of large-scale oil palm plantations, and compares them to a situation without policy action.The zero deforestation commitments and the moratorium on large-scale oil palm plantations expansion could reduce cumulative deforestation by 25% and 28%, respectively, compared to a situation without policy action. They could also cut greenhouse gas emissions from land use and land-use change by 13% and 16%, respectively, over the period 2010-2030.Even under the zero-deforestation and moratorium scenarios, Indonesia is projected to increase palm oil production between 124%-97% over 2010-2030, which is partly due to higher production originating from smallholders.Both measures - the zero deforestation commitments and a moratorium of future large-scale oil palm plantations expansion - would be especially beneficial to limit future deforestation in Indonesia in a context in which global demand for palm oil is expected to keep increasing.Foresight tools can equip stakeholders and policy makers with data and information to allow for evidence-based policy making. This will permit planning for reducing deforestation and greenhouse gas emissions, and finding options acceptable to all stakeholders involved.
The governance arrangements of sustainable oil palm initiatives in Indonesia by Luttrell, C.,Komarudin, H.,Zrust, M.,Pacheco, P.,Limberg, G.,Nurfatriani, F.,Wibowo, L.R.,Hakim, I.,Pirard, R. Pdf
Key messages Different types of interactions are emerging involving public and private (non-state) actors across sustainability initiatives in the palm oil sector in Indonesia.Such initiatives include the development of gover
Sustainable Palm Oil Production project synthesis by Bessou, C.,Rival, A.,Levang, P.,Feintrenie, L.,Bosc, P-M,Cheyns, E.,Djama, M.,Wohlfahrt, J.,Marichal, R.,Roda, J-M,Caliman, J-P,Pacheco, P. Pdf
Key messages Several sustainability certification schemes have been developed for palm oil; however, the field impacts of these schemes remain highly uncertain. The Sustainable Palm Oil Production (SPOP) project, funded by the French National Research Agency (ANR), was aimed at consolidating and deepening the scientific basis of these schemes.SPOP field work undertaken in Indonesia and Cameroon highlighted the large variability in practices and impacts of oil palm systems. Our main results related to the uncovering of the multiplicity of growers and their trajectories, and identifying room for improvement and the need for recommendations adapted to the various grower contexts and strategies.The SPOP project made it explicit that visions of sustainability and global challenges vary greatly among growers and other stakeholders involved in the palm oil sector. These diverging conceptions are most likely to induce bottlenecks in the definition and implementation of good practices and should be accounted for in the refinement of sustainability criteria.Within the SPOP project, we investigated possible futures for oil palm using participatory prospective analyses and multi-agent-based modeling work. Our research work showed that capacity development and the organizational capacity of smallholders, fair partnerships and combined forms of governance are key drivers in ensuring the uptake of good practices and sustainable development at the landscape scale.
In search of sustainable and inclusive palm oil production by Idsert Jelsma Pdf
In search of sustainable and inclusive palm oil production builds on the old debate regarding the role of smallholder farmers in society and links it to the integration of smallholders into modern global value chains. Since the peak in global agro-commodity prices in 2007/08, interest in agriculture has increased again among policymakers and in the private sector. Modern global value chains provide opportunities for smallholder farmers but also increasingly dictate conditions in terms of production practices, and thereby determine conditions for inclusion. The Indonesian oil palm sector provides an interesting case regarding smallholder inclusion in modern global value chains and the role they play in sustainable agro-commodity production. Palm oil production in Indonesia has thrived due to insertion in global value chains, experienced massive smallholder engagement, faces considerable sustainability challenges and illustrates the impacts sustainability initiatives can have on smallholders. It thus provides a promising case to further explore the nexus of sustainable and inclusive development, smallholder agriculture and policy. The primary aim of this book is to advance the understanding of how the oil palm sector can be made more sustainable and inclusive. It does so by exploring independent and organized oil palm smallholders in Sumatra, explaining their emergence and performance, and discussing strategies to improve their performance. Whereas the smallholder oil palm sector clearly has its unique characteristics, this book unpicks some stereotypical views on smallholders and highlights the dynamics impacting farmers’ organizations over time, and thereby contributes to debates on the future of farming.
Harnessing Political Economy and Global Green Trade to Increase Indonesia’s Palm Oil Sustainability by Purnomo, H.,Kusumadewi, S.D.,Ilham, Q.P.,Kartikasara, N.H.,Okarda, B.,Dermawan, A.,Puspitaloka, D.,Brady, M.A. Pdf
Review of the diversity of palm oil production systems in Indonesia by Baudoin, A.,Bosc, P-M,Bessou, C.,Levang, P. Pdf
This paper proposes an overview of the development of oil palm production in Indonesia combining two levels: (i) a national and historical perspective of the development of the sector; (ii) a regional approach considering two contrasting provinces, Riau and Jambi. Starting with colonial times, the national approach deals first with the main periods that punctuate the development of oil palm plantations up to the contemporary period, marked by the liberalization of the economy. It emphasizes several factors that played a strategic role in the development of palm oil production, such as the role of the State and migration. After presenting the different models that structure the relationships among stakeholders and how these relationships have evolved, the role of small family planters is analyzed. This section ends with a review of some controversial issues: livelihood improvement, land tenure and customary rights, inclusion versus exclusion, market risks, forest and environmental threats and governance. The regional approach gives context to the development of palm oil production within two territories that have different historical backgrounds, with Jambi entering into production relatively recently. In each of the two provinces, the themes and issues involved in palm oil development identified at national level are analyzed, with specific emphasis on stakeholders’ strategic behaviours. The paper concludes with a comparative perspective on both provinces.
