Indonesia Palm Oil Pledge dissolved too soon?

Nathalie Rasmussen by Nathalie Rasmussen, Head of Business Conduct Engagement at GES

While Singapore was launching a new alliance on sustainable palm oil together with WWF, the Indonesia Palm Oil Pledge (IPOP), an effort aiming at enabling and promoting the production of sustainable palm oil that is deforestation-free, expands social benefits and improves Indonesia’s market competitiveness, was dissolved.

In my blog from April 2016 [1], I noted the opposition of the Indonesian government to IPOP; it seems that the opposition has now resulted in the end of the initiative. The platform, which included six of the largest Indonesian palm oil companies: Wilmar, Cargill, Asian Agri, Golden Agri-Resources, Musim Mas Group and PT Astra Argo Lestari Tbk, stated on July 1, 2016:

“The signatories of the Indonesia Palm Oil Pledge (IPOP) support the Government of Indonesia’s efforts to transform the palm oil sector and strengthen the Indonesia Sustainable Palm Oil (ISPO) standard with the phasing out of IPOP as an entity. The Signatories will continue to implement their sustainability commitments independently.”[2]

The question remains whether the ISPO will be the appropriate initiative to take over from IPOP. The ISPO is a government certification scheme, which is very different from the consensus-building platform that IPOP formed and which intended to go beyond the standards required under the ISPO. However, IPOP has been accused of being too silent for too long when issues like the haze in 2015 occurred.

Gemma Tillack, Agribusiness Campaign Director for Rainforest Action Network responded to the news with the following statement: “Millions of smallholders may lose out if the positive initiatives spearheaded by IPOP are discontinued. (…) The government lead Indonesian Sustainable Palm Oil (ISPO) system has an important role to play, but it will not deliver the extension services, market access and land security for small holders promised by the IPOP. It is critical that in addition to strengthening ISPO, the government works with civil society and the private sector to protect Indonesia’s critically important forests and peatlands while delivering new incentives, improved livelihoods and outcomes for local communities and workers and alternative low carbon development opportunities for Indonesia.”[3]

Despite the commitment from the six palm oil companies to their respective sustainability policies and programmes, GES believes that the ISPO might not be enough to protect social and environmental standards and that the lack of an organisation to coordinate these efforts makes the future more challenging for Indonesian smallholders.




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