The Oil Palm Governance: Challenges of Sustainability Policy in Indonesia

Abstract

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.

Understanding the bioeconomy through its instruments: standardizing sustainability, neoliberalizing bioeconomies?

“…Regarding the sustainability criteria, the ISPO standard is rather diversified in comparison to the RED or RenovaBio. It comprises a broader range of principles, including social ones, even though the implementation of the ISPO remains rather weak so far (see, e.g., Hidayat et al 2018;Choiruzzad et al 2021;Putri et al 2022). In terms of global trade, however, the broad scope of the criteria is not supposed to be an obstacle, but rather quite the opposite.…”

Analysis of Nuclear-Plasma Partnership Pattern for Sustainable Oil Palm Plantation in Riau Province, Indonesia

“…al [20], found that the European food industry is currently requesting the Roundtable on Sustainable Palm Oil (RSPO) standard, while the European biodiesel industry is seeking International Sustainability and Carbon Certification (ISCC) [20]. Therefore, the Government of Indonesia requires large-scale and small-scale plantation companies to have Indonesian Sustainable Palm Oil (ISPO), where this certification is expected to be a ticket for plantation companies or self-help groups to remain productive without ignoring environmental and social issues in the palm oil industry national and local [21,22]. In addition, the solution that can be taken to overcome the problem of oil palm development is a collaboration between companies that act as the nucleus, and oil palm smallholders as plasma to consistently apply the principles of sustainability.…”

“…Through this policy, support for oil palm development includes rejuvenation activities, human resource development, as well as facilities and infrastructure assistance. This activity integrates all aspects of oil palm plantation development to increase the productivity of smallholders [12,22].…”

Factors Affecting Independent Oil Palm Smallholder’s Decision to Participate in Government Replanting Assistance Scheme in Malaysia

“…Oil palm producers usually refuse to replant their old oil palm trees because they still produce yield and provide income (Putri et al, 2022). This situation has led to many old palm oil areas still being left to grow, although the oil palm has shown a decrease in yielding.…”