As export markets for Indonesian palm oil become increasingly competitive and restrictive, the Indonesian government is moving to try to improve the credibility of its own Indonesian Sustainable Palm Oil (ISPO) standard. But progress has been slow.
Joko Supriyono, the chairman of the Indonesian Association of Palm Oil Producers (Gapki) said that with 70 percent of Indonesia’s palm oil output going to exports, Indonesia was highly dependent on its export markets.
“Our fate depends on our export markets. we cannot ignore our export markets,” Supriyono told the closing ceremony of the second Indonesian Palm Oil Stakeholders Forum in Medan on September 28, 2017.
The Indonesian government in 2009 launched the ISPO standard, the first national standard of its kind, with the aim of ensuring that all Indonesian oil palm growers, not just those exporting to foreign markets, conform to higher agricultural standards.
But adherance to ISPO has been slow, and compliance low, lending weak credibility to the scheme and leading to low acceptance overseas.
Forest Watch Indonesia (FWI) Executive director Direktur Soelthon Gussetya Nanggara, said that the government is currently working on a promised presidential decree on the strengthening of the ISPO certification that had been initially mooted for January 2017.
More than nine months later, the decree has yet to be passed. Nanggara said the draft presidential decree still has to go through a national public consultation sometimes this month.
He aired hope that the transformation into a sustainable palm oil must be based on a common vision to halt deforestation and land degradation, land conversion , and promote the protection of forest and peat land ecosystems while at the same time providing legal protection for the rights of people affected by palm oil plantation.
“If these are not included, then this ISPO certification would only be a mere formality,” Nanggara said.
“The low credibility and accountability in the implementation of the ISPO certification at present, compounded by the weak law enforcement against various violations that is harming the environment and causing conflicts in the society, is leading to the low level of market acceptance of the ISPO,” Nanggara said.
Until end of August, the total area used for palm oil plantations in Indonesia stood at approximately 11.9 million hectares. So far, only 1.9 million hectares have met ISPO standards. this cover 8.2 million tons of crude palm oil, according to Director General for Plantation of the Ministry of Agriculture Bambang MM while opening the IPOS forum.
ISPO is mandatory for companies but voluntary for smallholder farmers.
In July last year the coordinating ministry for the economy set up a team for the strengthening of the ISPO certification system to enhance the credibility of the system by conducting a fundamental improvement in the certification system and palm oil industry sustainability standards in Indonesia.
In March 2017, FWI joined 30 other civil societies groups, including the World Wildlife Fun (WWF) Indonesia, Greepeace, and the Independent Forest Monitor Network (JPIK), in demanding that the ISPO be reformulated so as to not only answers the challenges of mitigating climate change and improve the management of natural resources but also “improve the acceptance of markets of palm oil as a strategic commodity,” and also assure the protection, respect and fulfilment of human rights.
The new ISPO certification must also be followed by an effective law enforcement and a comprehensive policy framework to assure the attainment of an improved management of the palm oil industry in Indonesia.
Aziz Hidayat, head of the secretariate for the ISPO Commission, could not be immediately reached for comment, but he has said that the strengthening of ISPO would result in a system that “is more rigid and its criteria have been reviewed.”
The current ISPO certification system has been criticized because the process took too long, at least two years, industry players say.
Among the hindrances are the requirement for a Cultivation Rights Title (HGU) for the land used as a plantation. Joko Supriyanto said that there were many companies that have completed all the requirements for an ISP certification but were yet awaiting their HGU or their HGU were unclear. Regional land zoning plans are also not yet available in some regions although they a requirement.
Concessions that overlap with conservation areas, quite a common occurence in view of the absence of accurate, standardized maps, will never obtain a HGU.
Ponten Naibaho, an expert consultant on palm oil and author of several books on palm oil cultivation, said that one of the weakness of the ISPO scheme lay in its personnel conducting the checks on the field.
“In many cases these personnel gives the chop of approval acknowledging that a criteria had been met by a company after a cursory check but months later, sometimes even six months later, they find out that the work had not been done,” Naibaho said.
Even after companies obtain ISPO certification, there is no guarantee their products can be absorbed by the markets because there are other additional criteria required by certain market.
ISPO also does not include a deforestation clause, as long as a land is not in forest areas, it will have no problem. The market, however, increasingly requires that no deforestation took place in the production of the commodity.
Mona Surya, the deputy chairperson of Gapki, was not too enthusiastic about the prospect of changes in the ISPO certification.
“A review already? Just meeting the current ISPO (requirements) is already difficult. It needs time and money,” Surya said.
Speaking on the sideline of a recent palm oil meeting in Medan, North Sumatra, Surya said she knew because she ws a player in this field, having a palm oil plantation and a mill to manage herself.
She cited the example of a requirement to be met under the ISP certification, the physical provision of roadside channels.
“This costs money to build, I estimate it at around Rp 1.5 billion,” she said, adding that amid other expenses, to set aside such amount was not an easy task.
She said that she is still in the process of trying to meet the ISPO requirements and has yet to obtain the certification.
“It is already difficult to meet the ISPO critieria as they are now, and you want to review it, make it stricter?” she asked.
Naibaho, who is also an auditor for both the RSPO and ISP tract with surveyor company Sucofindo, said that ISPO standards were actually stricter and more difficult to meet than those of RSPO.
“With RSPO, six month before the audit, everything must have already be completed and ready for inspection,” said Naibaho. In comparison, ISPO criteria have to be met gradually and not simultaneously leading to the long time to process certification.
ISPO also require applicants to meet ISO9000 and ISO1400, two national standards respectively for product quality guarantee and for environment management system.
Gapki’s Supriyono said that regardless of the stands of export markets regarding ISPO, all stakeholders in the palm oil industry must stick together and back the certification scheme.
“We must all agree to support ISPO because it is an indicator of the sustainability of Indonesia’s palm oil industry,” he said.