No abstract

The Indonesian state has issued many regulations to control palm oil expansion, but they have been weakly enforced, resulting in widespread illegal plantations. During the last decade, Indonesian authorities have used force to reduce illegal plantations. This article analyses the drivers behind these actions and questions to what extent they reflect the rise of eco-authoritarianism. By investigating six cases of disciplinary action in Sumatra, we conclude that the Indonesian state is neither practising eco-authoritarianism nor constituting a green state. The disciplinary action, however, has had limited success in environmental terms due to policy incoherence, violent contestation and the sector's historical context.

By analysing the different roles of the Indonesian state in arranging finance schemes for palm-oil development since 1945, this article aims to answer two questions: What are these roles? And to what extent have they prioritised or balanced economic growth, social equity, and environmental protection? We conclude that the state has never been absent from the palm-oil industry but has had different and changing financing roles that are historically contingent and shaped by the evolving economic and political landscape. Furthermore, these roles reflect Indonesia's priorities of achieving economic growth through palm-oil development, furthering social equity, and, recently, promoting environmental sustainability.

Nowadays, Indonesian palm oil faces agrarian, environmental, and social issues and has been subject to sharp criticism from the international community for many years. To answer this problem, the Indonesian government implemented a strategy through certification which ensured the achievement of sustainability standards, especially on the upstream side of the palm oil supply chain. The implementation of Indonesian Sustainable Palm Oil (ISPO) was an ultimate instrument that applied in particular to smallholders oriented towards managing land legal issues, plantation business licenses, plant seeds, and environmental management and to farmer organizations at the local level. However, this process faced quite complex challenges in the form of structural barriers that are very constraining. This study revealed the occurrence of the phenomenon of hollow governance when regulations are absent or collide with each other. The study also revealed institutional power and multi-level governance that made the governance process ineffective or counterproductive. With a qualitative approach to research conducted in three important palm oil provinces of Indonesia, this article aims to look at the issues of oil palm governance a bit more comprehensively. The study conceptualized what was referred to as low-functioning governance to describe how weak the institutions, organizations, actors, and resources are that support ISPO implementation, especially at the regional and local levels. This paper suggests improving and strengthening the ISPO oil palm governance if Indonesian palm oil companies and smallholders want to gain better credibility on sustainability abroad.

There is a growing awareness and interest among scholars of the important role China and India can play in governing globalisation of economy. Recent literature has tended to emphasise the divergent development outcomes of producer and supplier countries engaged in value chains led by China and India. The different market preferences and legitimacy of private‐driven governance of China and India from developed economies such as the European Union and the United States bring about unsustainable development of countries supplying for China and India. Taking empirical evidence from Indonesian palm oil industry, this paper argues, on the contrary, that Indonesian palm oil producers keep commitments to progress towards sustainable production despite the rising importance of India, China, and other Global South economies as buyers and consumers along with the European Union. The Government of Indonesia also takes initiatives to facilitate the palm oil producers to reach a socially optimum sustainability over time. Buyers of China and India tend to require less restrictive sustainability standards of palm oil production than the European Union, but this is a matter of a temporal dimension of their domestic public interest and government policy priority on sustainability governance. The implication for research on sustainability governance in the Global South‐driven regional value chain is that attention should be paid to the lead of producers and their nation‐state in driving the value chains towards sustainable production and supply.