The Palm Scribe

Palm Oil is Key to Indonesia Attaining its SDGs

The palm oil sector is key to Indonesia’s efforts to reach its Social Development Goals (SDGs), especially as a provider of livelihood, creating employment and reducing poverty, ministers said here on Thursday (1/11).

Addressing the first of the two days of the 14th Indonesian Palm Oil Conference  (IPOC) held in Nusa Dua, on the island of Bali, Coordinating Minister for the Economy Darmin Nasution said that oil palm significantly impacted the country’s Gross Domestic Product (GDP) contributing 2.46 percent. The cultivation of palm oil, he said, has led to substantial economic and social progress and therefore the commodity was important to Indonesia’s development.

14th IPOC

“Palm oil holds great importance to governments in developing countries through, among others, generating foreign exchange, developing a commodity that has a comparative advantage in the global economy, as well as positively contributing to the improvement of education and health. Hence, it is undeniable that palm oil plays a significant role to the attainment of the SDGs,” Nasution said, adding that export earnings from palm oil production have been the largest contributor of non-oil and gas export revenues for the past three years.

He said that every one percent increase in palm oil production directly contributed to the increase of the GDP and also indirectly contributed, through multiplier value added, to other related sectors. Revenues from palm oil exports saw a 25.73 percent increase in 2017 to reach Rp307 trillion.

“Given the importance of the palm oil sector to Indonesia’s development, it is in our own national interest to ensure that further development of the oil palm sector takes into account the principle of sustainability. It is our obligation that this sector is managed carefully and responsibly for the sake of the future generations,” Nasution said.

He said that all stakeholders, including the government, the private sector, and local communities, fully understood the potential benefits that the palm oil sector may bring, while at the same time all also understood the environmental cost it may entail.

“The substantial economic and social progress achieved through the cultivation of palm oil should also be balanced out with the environmental challenge in order to meet the SDGs of the United Nations 2030. Indonesia is highly committed to ensuring the implementation of the 2030 Agenda. In this respect, sustainability has formed a keyword in the current Indonesian palm oil development,” Nasution said.

Speaking about the relevance of SDGs to the palm oil industry, Bambang Brodjonegoro, Minister of Development Planning said that from the economic point of view, palm oil contribution is important providing decent work and economic growth.

Bambang said that one of the challenges of implementing the SDGs was the principle that under SDGs, no one should be left behind. Everyone should be able to enjoy the benefits brought by the attainment of the SDGs.

Bambang also urged all sides, especially the private sector in the palm oil industry, to factor in or mainstream the SDGs into their business plans.

“SDG will be one of the important factors for promoting the competitiveness of palm oil, not only in Indonesia but also in other parts of the world,” Bambang said. He said that failure to do this will result in the companies having a hard time competing with other companies.

Meanwhile, Trade Minister Enggartiasto Lukita, while addressing the same conference, said it was clear to all that palm oil played a significant role in Indonesia’s economy, in terms of providing employment and reducing poverty, both of which were part of the SDGs.

“There is no doubt today that palm oil is the largest source of export revenues for Indonesia. It also serves as a source of income for 5.3 million workers and provides a source of livelihood for at least 21 million people in Indonesia,” Lukita said.

He called on all stakeholders, especially the private sector in the palm oil industry, to unite in facing and proactively address the challenges of the industry, especially in countering negative campaigns against palm oil and promoting positive ones.

“We should prove that palm oil can contribute significantly beyond the SDGs,” Lukita said.

Joko Supriyono, the chairman of the Indonesian Palm Oil Association (GAPKI), the organization which organized the conference, pointed out that the SDGs, all 17 of them, provided the blueprint to achieve a better and more stable future and added that the palm oil industry development is meeting the challenges of attaining the SDGs.

“Indonesia has to strengthen the palm oil industry development as an important industry, not only economically, but also socially and environmentally,” said Supriyono.

Nasution said that since 2011 Indonesia has been developing and implementing a sustainable certification system for palm oil industry, the Indonesian Sustainable Palm Oil (ISPO), to promote the sustainable management of palm oil in the country and thereby securing and maintaining the economic, social and environmental benefits of palm oil development in the long run.

The dynamics from both domestic and global markets, as well as climate change and sustainable development concerns, however, have prompted the government to further develop the certification system to obtain a more robust standard that better harmonizes the economic, social, and environmental aspects of the palm oil sector.

Nasution cited as being among the outstanding features being developed in strengthened ISPO, the scaling up the legal hierarchy of public policy from ministerial decree into presidential decree involving related multi-stakeholders in the improvement process to promote transparency, credibility and ownership; promoting equal and proportional balance on role and function amongst government, private sector and community in implementing the ISPO system; and enhancing ISPO principles and criteria as a tool for testing compliance and traceability in achieving sustainability

“Indonesia is taking into account the SDGs elements into the principles and criteria of ISPO, particularly in strengthening the ISPO,” Nasution said, adding that the principles and criteria of ISPO are in line with 12 out of the 17 SDGs.

The second day of the conference will also include a 2019 Price Outlook where trends and developments in prices and forecast for next years will be discussed.

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