Risky Business Uptake And Implementation Of Sustainability Standards And Certification Schemes In The Indonesian Palm Oil Sector
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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?
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.
Transforming Borneo: From Land Exploitation to Sustainable Development by Goh Chun Sheng,Lesley Potter Pdf
“There is an energizing boldness in this synthesis: the right big-picture questions aligning all the way down to the right complexities on the ground, and across the diverse territories that comprise contemporary Borneo. A manifesto for the kinds of cross-sectoral and applied research that can make the difference to the future of Borneo.” Cynthia Ong, Chief Executive Facilitator, Forever Sabah “A surgical and timely compendium on the transformation of Borneo’s forests and land use with clear regional implications. If you care about the future of conservation in this part of the world, you will find all the key ingredients here for its salvation.” Gopalasamy Reuben Clements, Professor at Sunway University, Co-founder of Nature-Based Solutions “A perspective about balancing the future amidst the need for economic and social development while providing a better and more sustainable Borneo. It is something that you will need to help drive home change and make a sustainable impact for people and planet without compromising profit.” Timothy Ong, Head of Circular Bio-economy Unit, Malaysian Investment Development Authority (MIDA)
Corporate commitments to zero deforestation by Jopke, P.,Schoneveld, G.C. Pdf
This research critically examines implementation gaps and externality problems associated with the recent proliferation of zero deforestation commitments (ZDC) by large commodity producers. By developing and employing a hierarchical framework, we evaluate
Non-State Actors and Transnational Governance in Southeast Asia by Shaun Breslin,Helen E.S. Nesadurai Pdf
While the focus on national governments as the main providers of different forms of transnational governance in Southeast Asia is entirely understandable, such a focus can significantly underestimate the roles played by non-state actors. This comprehensive collection provides five different case studies that explore in detail how these governance forms work in different policy arenas. While previous studies have noted the way that non-state actors act as pressure or advisory groups, lobbying or advising states and regional organisations, this book explores how they are now more actively involved in a variety of cross-border networked forms of coordination, providing standards, rules and practices that other actors voluntarily abide by. The chapters in this volume reveal variations in the architecture of transnational governance, why they emerge, the modes of social co-ordination through which they work to shape actor behaviour and achieve impact, their normative implications, and how these governance schemes intersect with state and national regulatory frameworks. The authors point to the importance of looking beyond arrangements established through intergovernmental mechanisms in order to gain a full understanding of how international interactions are organised in Southeast Asia. This book was originally published as a special issue of the Journal of Contemporary Asia.
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
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.
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.
Current practices and innovations in smallholder palm oil finance in Indonesia and Malaysia by Bronkhorst, E.,Cavallo, E.,van Dorth tot Medler, M.,Klinghammer, S.,Smit, H.H.,Gijsenbergh, A.,van der Laan, C. Pdf
Key messages Providing long-term financing to oil palm smallholders for urgently needed replanting purposes has the potential to promote more sustainable supply chains in palm oil production. This is required as demand for palm oil is expected to rise significantly in the coming decades.High costs and risk in agricultural lending deter banks from providing finance to oil palm smallholders which, however, is urgently needed mainly for replanting. Depriving smallholders from access to finance leads to continued deforestation (often 'slash and burn') instead of replanting as well as usage of low-quality crop and other unsustainable agricultural practices.By providing access to long-term finance, oil palm smallholders are encouraged to replant rather than exploit additional agricultural land through deforestation. There is also an urgent need to support farmers with income generation alternatives to bridge the 3-5 years of production gap after replanting. Recognizing the key role of smallholders in meeting the large and growing global demand for palm oil, various innovative financing schemes initiated by the private sector, commercial banks, impact investors, development finance institutions and governments have emerged.This brief evaluates past and current policies and financing schemes as well as their outcomes for smallholders in terms of income security, sustainable practices and the environment in the palm oil industry in Indonesia and Malaysia. It also analyzes financing schemes that could contribute to sustainable smallholder oil palm development in such a way that the supply base of smallholders can be secured or can expand with improved sustainability practices compared to past and existing schemes.
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
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
The Oil Palm Complex by Rob Cramb,John F. McCarthy Pdf
The oil palm industry has transformed rural livelihoods and landscapes across wide swathes of Indonesia and Malaysia, generating wealth along with economic, social, and environmental controversy. Who benefits and who loses from oil palm development? Can oil palm development provide a basis for inclusive and sustainable rural development? Based on detailed studies of specific communities and plantations and an analysis of the regional political economy of oil palm, this book unpicks the dominant policy narratives, business strategies, models of land acquisition, and labour-processes. It presents the oil palm industry in Malaysia and Indonesia as a complex system in which land, labour and capital are closely interconnected. Understanding this complex is a prerequisite to developing better strategies to harness the oil palm boom for a more equitable and sustainable pattern of rural development.
Toward responsible and inclusive financing of the palm oil sector by Kusumaningtyas, R.,van Gelder, J.W. Pdf
Key messages Many stakeholders, including governments, production and processing companies and non-governmental organizations (NGOs), are working towards a more sustainable palm oil sector. Although smallholders account for an important share of oil palm cultivation, the social and environmental challenges of smallholder practices receive relatively little attention.Financial Service Providers (FSPs), such as banks and pension funds, could play a more significant role developing a more sustainable and inclusive palm oil sector by tying Environmental, Social and Governance (ESG) conditions to the financial services they provide to palm oil companies that source products from smallholders.The majority of funds financing the major palm oil companies originate from FSPs based in Asian countries such as Japan, Malaysia, Indonesia and Singapore. Currently, these FSPs do not have adequate ESG policies.European and American FSP policies are more advanced in addressing such issues as deforestation and Roundtable on Sustainable Palm Oil (RSPO) certification. Nevertheless, they still pay very little attention to the inclusion of smallholders in sustainable supply chains.Due to the differences between ESG policies followed by European and American FSPs in comparison to Asian FSPs, palm oil companies still have ample alternatives to access financing with few conditions. As a result, the potentially significant contribution of FSPs to foster a more sustainable palm oil sector remains underutilized.Adoption of more adequate ESG policies by Asian FSPs could occur in the first place through an increased understanding by these FSPs of the financial risks involved in continuing business as usual. Second, peer pressure from European and American FSPs and sustainability initiatives would help. Third, financial regulators in the palm oil production countries increasingly look for instruments to stimulate the financial sector to contribute more to the sustainable development of their economies.
Thoughts on Sustainability, The Palm Oil Sector and The Role of The Government in Indonesia by Jan Horas Veryady Purba Pdf
One issue that is widely discussed in various scientific forums in the world, both in Indonesia, Malaysia, Europe and the United States is palm oil. These commodities expanded rapidly and became one of the world's major source of vegetable oil, and managed to beat the dominance of soybean oil. This book presents information and data about the Indonesia's palm oil industry. Contents 1. Introduction: Sustainability as a Concept in Economic Thought and Policy in Indonesia 2. Methodology 3. Sustainability: Flexibility and the Role of Government 4. General Facts on Indonesia 5. History of the Palm Oil Industry in Indonesia 6. Eco-Physiology and Advantage of Oil Palm 7. Supply Chain in Palm Oil Industry in Indonesia 8. Government Policy 9. Conclusion
