Challenges and possibilities of implementing sustainable palm oil industry in Indonesia

Abstract

Indonesia has emerged into the largest palm oil-producing nation in just a few decades, leaving Malaysia behind. Undeniably, palm oil has substantially contributed to the country’s economic development. Nonetheless, it comes with refutation for deforestation, environmental degradation, and social tensions, are also evident. The palm oil industry has been recognized as one of the major producers of greenhouse gases, including CO2. The Government of Indonesia (GOI) is committed to maintaining the palm oil industry, despite the strain of the European Union, as millions of workers depend on these industries for their livelihoods. The GOI requests that each palm oil firm pursue the Indonesian Sustainable Palm Oil (ISPO) certification regarding the adverse impacts. Around 20% of the country’s entire palm oil industry has received an ISPO certificate. By 2023, all palm oil companies must be ISPO accredited, as this regulation is compulsory. By reducing CO2 and other greenhouse gasses, implementing all the ISPO guidelines in the palm oil industry will support the industry and protect the environment. This paper will review the implementation of sustainable Indonesia’s palm oil industry under the current situation, corresponding with ISPO and RSPO (Roundtable Sustainable Palm Oil).

The Need for Global Green Marketing for the Palm Oil Industry in Indonesia

“…Nevertheless, these two certification bodies mainly cover the same principles and criteria of people, planet, and profit in accordance with Elkington's triple bottom line concept. Even though the language and the interpretations of the RSPO and ISPO guidelines are different, both sets of criteria have similar emphasis, especially on opening new plantations which must account for greenhouse gas emissions, primary forests, and peatland exploitation [29].…”

“…The main difference between the RSPO and the ISPO is the mandatory legal compliance for palm oil plantations that are based in Indonesia. [29]. The RSPO was created by the drivers of a European initiative to combine a renowned NGO working in the environmental sector, the World Wildlife Fund (WWF), with a world-renowned fast-moving consumer goods producer, Unilever [30,31].…”

“…Similarities between RSPO and ISPO. The ISPO was created by the Ministry of Agriculture in Indonesia in 2011 under the Ministry of Agriculture Regulation Number 11/Permentan/OT.140/3/2015 to answer questions concerning the sustainability of palm oil plantations and to support the commitment from the President of the Republic of Indonesia[29]. The RSPO was created by the drivers of a European initiative to combine a renowned NGO working in the environmental sector, the World Wildlife Fund (WWF), with a world-renowned fast-moving consumer goods producer, Unilever[30,31].…”

Independent Palm Oil Small Holders' Plans Regarding Their Behaviour

“…Independent oil palm farmers must develop sustainable plantations. Empirical research by [6] Sustainable agriculture requires superior seeds, fertilizers, OPT control, and harvest/post-harvest handling.…”

Implementation of the Indonesia Sustainable Palm Oil (ISPO) Policy on Oil Palm Plantations in West Kalimantan

“…However, several challenges must be overcome before this policy can be fully implemented. Sylvia (2022) mentioned several obstacles to overcome in the government's implementation of the ISPO, such as the lack of a clear definition of sustainability, the lack of a precise organization responsible for the ISPO, and the lack of global market recognition of this certification. Rosyani (2021) argued that companies with ISPO certification are not doing enough to encourage and help plasma or independent smallholders implement their commitment to sustainable certification on oil palm plantations in Indonesia.…”