Two weeks ago, senior Indonesian officials slammed a commitment by five giant palm oil companies to purge their supply chains of deforestation, saying it hurts farmers, usurps the government’s authority and might constitute a cartel dominated by foreign interests.
Last week, other Indonesians, including the head of a major smallholders union, took aim at those assertions.
They portrayed the pact, known as the Indonesia Palm Oil Pledge (IPOP), as an important milestone on the road toward sustainability for an industry whose rapid expansion has eaten away at the the country’s rainforests and peatlands, pumping huge amounts of carbon into the atmosphere and infringing on the territories of indigenous peoples and endangered species such as the Sumatran rhinoceros (Dicerorhinus sumatrensis) and Bornean orangutan (Pongo pygmaeus).
The back-and-forth was the latest skirmish in the debate over how far Indonesia should go to protect its remaining ecological wealth as it attempts to strike a balance between conservation and development and determine whether and how those aims might overlap.
It also comes as the government introduces a huge new subsidy via the nascent Crude Palm Oil Supporting Fund (CPO Fund), which conservationists and other experts, including at least one senior government official, fear could undermine a growing movement to stop deforestation for palm oil.
For the sake of the sustainability of Indonesian palm oil, we recommend optimising productivity on land that has already been opened.
Nyoman Suryadiputra, director of Wetlands International Indonesia
Indonesia is the world’s largest palm oil producer, and the sector supports millions of livelihoods and is an important source of government revenue and foreign exchange. But the country has also committed to a major emissions reduction and is expected to play a lead role in the December climate negotiations in Paris.
Under pressure from green groups and Western consumers, Wilmar International Ltd, Golden Agri-Resources Ltd, Asian Agri Group and Cargill Inc formed IPOP in September last year.
Musim Mas Holdings Pte Ltd joined in March, putting around four fifths of global refining capacity under their combined superintendence and suggesting a tipping point for the industry’s no-deforestation push.
Despite its market share, though, IPOP never aspired to transform the industry alone. That’s why a hallmark of the pledge is to lobby the government to raise the standards of the law, which only protects some types of forest, to match its own.
The government has been less than forthcoming, and last week’s disparaging comments, made a day after IPOP introduced its inaugural executive director, was the most vehement reproach of the pledge by officials from the administration of President Joko “Jokowi” Widodo, in whose bid for top office last year conservationists placed high hopes.
Speaking after a meeting attended by representatives of several ministries, Musdhalifah Machmud, deputy for food and agriculture at the Coordinating Ministry for Economic Affairs, implored IPOP to consider the human costs of its actions.
“In Aceh there’s a plantation that was supplying Wilmar, but because it continued to expand, Wilmar won’t buy from it anymore,” Musdhalifah said.
“Think about the people’s economy,” she added. “The efforts of the people will be driven to a halt. Is there an alternative? You’re welcome to make a pledge, but don’t disturb the development of our country.”
San Afri Awang, director-general of spatial planning at the Environment and Forestry Ministry, reiterated that foreigners have no right to pressure Indonesia to change its policies. In his view, the pledge is an affront to Indonesian sovereignty and a direct threat to the government’s authority.
IPOP’s standards are simply too high, he added. Although Indonesians have already planted around 10 million hectares with oil palm, far more than any other country, proposals for new plantations are still pouring in, especially in Papua and West Papua provinces.
“[IPOP] is making things difficult because there are many people who want to develop [plantations] in Papua,” he said.
Indonesia’s Papuan provinces, which have seen much less deforestation than Sumatra and Kalimantan, are widely seen as a final frontier for the country’s agribusiness sector. In a recent interview with Tempo magazine, mogul Peter Sondakh, whose Eagle High Plantations Tbk recently completed a deal with Malayisan agribusiness giant Felda Global Ventures Holdings Bhd, referred to the region as “a buried treasure which must be dug out by Indonesians.”
IPOP bans clearing of old-growth primary and regenerating secondary forests alike, but San said the latter should not be removed from consideration for conversion.
A red herring?
Mansuetus Darto, head of the Oil Palm Smallholders Association (SPKS), said it’s worrying that officials are invoking the needs of “farmers and the people” as an argument against IPOP.
If the companies follow through on their commitments, “farmers will actually benefit from IPOP,” he said, noting the global trend toward demand for deforestation-free palm oil.
Darto applauded the emphasis on increasing productivity on existing plantations and suggested officials’ objections to reining in expansion are “because they don’t want to lose the power they have with licensing.”
The government has a “tendency to be defensive and always paint sustainability as a foreign concept,” but “sustainable business is a necessity for Indonesia,” he added.
“The government must support this initiative by creating regulations that allow IPOP members to implement their commitments.”
Bustar Maitar, head of forest campaigning at Greenpeace Indonesia, agreed that officials’ concerns about small farmers are a red herring.
“Actually, the ones who still want deforestation are big companies,” he said. “They’re the ones who want to keep clearing forest, especially in Papua.”
Besides clamping down on deforestation, Bustar added, “it’s about protecting access to global markets. We are very confident this initiative is useful to protect the environment and is also in the nation’s interest for the future.”
Teguh Surya, another Greenpeace forest campaigner, added, “I’m afraid this rejection of IPOP will encourage companies that are still comfortable destroying forests and peatlands.”
Nyoman Suryadiputra, director of Wetlands International Indonesia, also lent his support.
“For the sake of the sustainability of Indonesian palm oil, we recommend optimising productivity on land that has already been opened.”
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