The Palm Scribe

Facing the Challenges Towards a Sustainable Indonesian Palm Oil

Oil Palm Plantation

Despite the efforts and hard work of many in the Indonesian palm oil industry to make sustainability a norm, this major Indonesian commodity continues to become the target of incessant attacks and accusations from many corners, being labeled as a destroyer of the environment and especially forests. Are these accusation baseless or justified and what are the steps to take to make sure that this sector really goes the path of sustainability?

The problems faced by the industry in assuring the sustainability of the production, processing and supply chains in the palm oil sector are far from being simple and are even very complex. The wide expanse of palm oil plantation, the number of stakeholders involved, economic pressure, the very heterogeneous character of the human resources involved, regulations that are not exempt of loopholes, overlapping authorities, and also simple human greed, are only a few of the factors affecting this industry

Whether we admit it or not, deforestation is indeed still taking place, although when we talk data, nowhere near the scale we are accused of. It is true that the actions of a number of individuals or companies reflect on the entire industry, including those companies which are doing their best to become sustainable. But these, it must be said, are rather the exceptions that confirm the rule.  It is in assuring the sustainability of this industry that a cooperation between all sides is needed.

However, the reality is that such a needed cooperation is hard to materialize. Despite being a commodity that is the main contributor to the economy of the state and to the welfare of millions of Indonesians, palm oil has not been able to muster the support of all. Even whatever support it has, is often undermined by the weak or even absent coordination and cooperation between the various stakeholders.

One only needs to look at how many citizens remain oblivious to the fact that palm oil plays an important role in raising the welfare of both the state and the nation, and continue to swallow, line, hook and sink, the negative perception that many overseas holds against the commodity. Many also are the stakeholders that consciously or not, continue to weaken the industry through their policy, decisions or actions.

As the world’s top palm oil producer, and also its top consumer, Indonesia has not played an influential role in defining the direction and the sustainability of this sector at the international level.l Even though it can claim two superlatives in production and consumption of palm oil, Indonesia has mostly not been a leader of the industry and is even weakly represented in most international palm oil-related organizations and fora.

Indonesia is also not reputed for its concrete contribution, in thoughts and or ideas, for the advancement of sustainability in the palm oil sector. The world’s largest palm oil producer had to even take the back seat to the world’s second-largest producer.

So what is it that is behind the weak position of Indonesia in the global palm oil scene?

If we look at the main players in the palm oil industry in Indonesia, we will find the government, the private sector, non-governmental organizations and the society itself, including farmers. However, the last one tends to be ignored and not be well represented.

As a regulator, the government, as any government anywhere else, tend to be not only slow but also reactive only, not anticipative. And we are not even talking about the different levels of governments, at the central and in the regions and their continuous squabbles for power.

Private companies cannot be blamed too as basically they are profit-oriented entities. It is true that among them are those who are fully aware of the importance of sustainability in the palm oil industry and are actively working to achieve it. But there are also entrepreneurs and enterprises lacking in this understanding or are just acting and thinking in terms of how to make a quick profit from a long-term commodity.

NGOs are not homogenous either and consist of a variety of species. From those which are capable, competent and responsible, to those who are competent and capable but act without proper preparations to those who simply lack in capability or competency and act solely on a survival instinct, ignoring the larger interests, such as those of the state and the nation.

In short, all these main players have their own weaknesses and shortcomings that prevent them from being able to act alone in the industry’s journey towards sustainability. These main players need to work together to mutually balance their shortcomings and strength and mutually complement each other so that they can effectively contribute to the achievement of sustainability in the Indonesian palm oil industry.

Although this option sounds logical on paper, an effective cooperation between the three are difficult to get in real life. The inherent suspicion between the three will not be easy to get rid of in a short time. There is also the differences in the speed they address problems or take decisions. Governments are a slow behemoth, NGOs are quick to act while enterprises are usually more cautious and more often than not prefer to wait for the lead of either the government or NGOs.

So, is the future of the Indonesian palm oil industry bleak or will it go the way the country’s oil and gas industry has gone, going from a main source of revenue for the country to one that is barely able to survive?

One possible hope my lay in the hands of NGOs. They are the one who has made it their job to scrutinize the industry thoroughly and find the faults and weaknesses. If they can work together, be more objective and act based on more thought of and cross-sectoral considerations, they can take the lead in bringing the industry into full sustainability.

Can these NGOs unite and work together to reach their real common goals? These common goals are certainly not to kill the livelihood of millions of Indonesians who are now already suffering from the impact of low world CPO prices. It is rather, a sustainable palm oil industry in Indonesia that can enhance prosperity, for the nation and its growers, while not harming the environment or trampling on human rights.

They are the ones who are most familiar with what is taking place on the ground. They are the ones who are able to point out the weaknesses and problems. Therefore they are the ones more equipped to try to reach their goals, to find the answer to the weaknesses and try to implement those in the field with the involvement of the other stakeholders, especially with the two other main players — the government and the enterprises.

Such cooperation opens up the opportunity for NGOs that work independently from the government, to provide substantive solutions for the improvements that need to be made in this industry. The government can support with the appropriate policy and regulation while enterprises can contribute through their compliance to the steps that have been jointly agreed and or through the provision of the necessary facilities and services.

This option may sound utopian for many, but the reality is that experience has shown one cannot rely on the government or the private sector to work fast and lead efforts to reach sustainability in the palm oil sector.

The question remaining is whether we are able to shed our sectoral egotism and whether we are willing to work together for the sake of our own good?

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