Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

The politics and practice of zero-deforestation and sustainability commitments in palm oil in Indonesia


Published on

Presented by Pablo Pacheco, from the Center for International Forestry Research (CIFOR), at the XVI Biennial IASC Conference ‘Practicing the commons: self-governance, cooperation, and institutional change’, in Utrecht, the Netherlands, on July 12, 2017.
This research is supported by USAID funding for CIFOR’s Governing Oil Palm Landscapes for Sustainability (GOLS) project, and this work is partly funded by the United Kingdom’s Department for International Development KNOWFOR Program Grant to CIFOR. This research is part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), which is funded by the CGIAR Fund Donors.

Published in: Environment
  • Be the first to comment

The politics and practice of zero-deforestation and sustainability commitments in palm oil in Indonesia

  1. 1. The politics and practice of sustainability commitments: palm oil in Indonesia Pablo Pacheco, Cecilia Luttrell and Heru Komarudin IASC Conference Utrecht, July 2017
  2. 2.  Oil palm has expanded rapidly with contradictory impacts  Positive impacts on local growth and poverty alleviation  BUT plantations development also creates social conflict  AND often expands in detriment of forests and peatlands  THAT expansion leads to biodiversity loss and GHG emissions  Three critical performance issues are visible in the sector • Land conflicts between companies and local populations + immigrants • Differences in yields between smallholders and industrial plantations • Large carbon debt resulting from oil palm expansion in forestlands and peatlands OIL PALM: A POLEMIC CROP
  3. 3. 10.5 Million hectares cultivated Labor 3.0 Million people 27.8 Million tons CPO Smallholders 42% of total planted area ~850 Palm oil mills 25 corporate groups control most of supply Indonesia 3.5 Tons CPO/ha/yr 53% global CPO supply Farmers 2.1 Million households OIL PALM IN INDONESIA
  4. 4. ACTION ARENAS: SUPPLY CHAINS AND TERRITORIES Downstream Upstream National Sub-national Private Public Traders / processors Manufacturers End-buyers Supply-side policies • Land use • Tenure • Finance • Incentives Demand-side policies • Procurement • Import duties • Sustainable trade Supply chain interventions • Private standards • Procurement policies • Traceability systems • Risk management Compliance [Efficiency, progression] Enforcement [Effectiveness, stickiness] Sustainability and equity gaps • Zero deforestation • Low-carbon / smart agriculture • Sustainable intensification • Equitable benefit sharing • Policy formulation/agenda setting • Rules setting and incentives • Implementation/enforcement • Oversight and monitoring Stages of policy implementation Ultimate goals Suppliers Value chain governance Multi-level governance Interactive governance Landscape governance Transnational governance Questions  Institutions/regulations: How to be designed in a way that acknowledges the lack of state’s enforcement capacity and avoids political interests?  Incentives: How to align with the needs of the market as well as encouraging public sector reform and demand for change?  Political support/interest: How to channel for public (rather than individual) benefits in ways that are distributed more equitably at the local level?
  5. 5. THE POLITICS OF ZERO DEFORESTATION  Most activity taking place at the international arena (consumer countries, corporate groups)  Different definitions and methods (HCSA and HCS+), yet efforts to harmonize them  The Government of Indonesia (GoI) has strongly opposed the ‘zero deforestation’ movement  YET, some provincial government devised regulations that backed up private initiatives  The GoI initiated a process to strengthening ISPO under a multistakeholder working group  ALSO, issued regulations to restore peatlands and halt oil palm expansion on these lands  Different company initiatives (e.g. FFA) to fire prevention linked to oil palm expansion  Major corporate groups piloting projects to support smallholder oil palm suppliers
  6. 6. Finance Trade Production Fiscal Land STATE REGULATIONS [Mandatory enforcement] Finance regulations Import regulations Production regulations Export tariffs and levies Land restoration Land allocation Spatial planning ‘Legal supply’ Certification systems Principles for responsible investment Zero defores- tation pledges EP SCC CGF NYDF ‘Sustainable supply’ ‘Clean supply’ Company policies Sectoral standards Codes of conduct Pledges and commitments PRIVATE STANDARDS [Voluntary compliance] Companies’ sustainability policies Five main categories of solutions to enhance sector’s governance:  Better design of standards  New regulations to enforce these standards to provide clearer frameworks  Better implementation and enforcement of existing regulations and standards uptake  Incentives to encourage adherence to standards  Better transparency and accountability over implementation INFORMALFORMAL Independent mills Company mills Corporations [traders and processors] Consumer goods manufacturers Financial service providers Independent farmers Third-party suppliers Outgrower farmers Company landholdings RSPO OJK EU-RED AMS Dec ISPO CPO Fund CPOPC ISCC IPOP SPOMMSPO ESPO ‘Hybrid’ governance Standard systems Initiatives & mechanisms Links in construction Formalized links Source: Pacheco et al. (2017) THE GOVERNANCE COMPLEX
  7. 7. SOME INITIATIVES AT THE SUB-NATIONAL LEVEL  Policy formulation and agenda setting: Jurisdictional Approaches (Seruyan, MuBa), Landscape Approaches (Sumsel, Kalbar IDH), and Green Growth strategies and development plans (Sumsel, Kalbar)  Rule setting and government regulations: Regulations on sustainability (Kalteng, Sumsel), and for HCV (Seruyan, Ketapang)  Implementation/compliance/enforcement: addressing legality, and registration of smallholders (INOBU), and I4PT land reform  Incentives and finance: several more innovative schemes are being putting in place in Kalteng and Sumsel (e.g. IFC, SNV)  Oversight and monitoring/evaluation: Multi-stakeholder processes mainly at the provincial level (Kalbar, Sumsel) Our focus at the sub-national level has been in three provinces and five districts. Kotawaringin Barat, Seruyan and Kapuas in Central Kalimantan (Kalteng); Ketapang in West Kalimantan (Kalbar); and Musi Banyuasin (MuBa) in South Sumatra (Sumsel).
  8. 8. KEY LESSONS ON THE DESIGN AND PROCESS  There are issues of legitimacy depending on ‘who’ sets up and implement the initiatives  There are several directions of change in the interaction between public and private actors  Many state functions are still fundamental for enabling the private commitments  The importance of buy in and shared objectives, but something not easy to achieve  The risk of facing a lower degree of integration into existing government systems  The importance of intermediaries as ‘facilitators’, and the role of individual ’champions’
  9. 9.  Land speculation and encroachment of state forests [land mafias]  Growth of independent mills fostering uncontrolled oil palm expansion  Enough informal finance driving oil palm plantations expansion  Many (illegal) smallholders not entitled to receive support from government  Incentives for plantation expansion due to growing biodiesel targets  The expansion of oil palm outside of granted concessions is growing over time  Difficult to direct investments for plantations onto occupied mineral soils BUT PERSISTENCE AMIDST CHANGE 0 2,000 4,000 6,000 8,000 0 100 200 300 400 500 600 1995 1998 2001 2004 2007 2010 2013 Oilpalmplantedarea (thousandha) Forestloss (thousandha) Loss Kalimantan Loss Sumatra Loss Others OP Kalimantan OP Sumatra OP Others Source: Own elaboration based on ESA CCI land cover maps
  10. 10. SOME WAYS AHEAD  Linking legal frameworks to private commitments  Closing the gaps between sustainability standard [ISPO/RSPO]  Supporting good performance with fiscal transfers and incentives  Building monitoring systems than enhance transparency  Innovating in setting up inclusive business and financing models  Broadening the scope of interventions to broader jurisdictions  Territorial approaches, through jurisdictional perspectives • Potential in addressing risks associated with commitments • Potential in helping upscale finance and risk management • Potential in expanding more inclusive business models
  11. 11.  The institutional architecture is growing in complexity  Different views of palm oil sustainability co-exist  Public policy and government responses are contradictory  Multiple initiatives emerging at the sub-national level  Different views between corporate and national players  Rivalry and cooperation co-exist at the multiple levels  Potential on jurisdictional approaches, but also limited CONCLUSIONS