Indonesia: Govt looks to disband zero-deforestation pledge

Hans Nicholas Jong The Jakarta Post 13 Apr 16;

The government is campaigning against a “zero deforestation” pledge (IPOP) signed by leading palm oil producers in Indonesia. This stands in stark contrast to Indonesia’s commitment to promoting sustainable agro-forestry practices.

The Agriculture Ministry said on Tuesday the government was looking for a legal basis to disband the pledge. The pledge was initially designed to promote sustainable practices in Indonesia, the world’s largest producer and exporter of palm oil.

“The point is that we oppose the IPOP. The Business Competition Supervisory Commission [KPPU] has issued a letter saying that there are indications of a cartel in the IPOP. We will coordinate with the KPPU first and that letter can be used as a basis for its disbandment,” the ministry’s plantations director general, Gamal Nasir, told The Jakarta Post.

The Agriculture Ministry has joined with the Environment and Forestry Ministry to attack the IPOP, with the latter officially stating its opposition to the pledge last year. The KPPU letter, issued in October 2015, said the IPOP might lead to cartel-like activities as it could create barriers to entry for palm oil farmers who conduct business with IPOP members. The signatories to the pledge are Asian Agri, Astra Agro Lestari, Cargill, Golden Agri-Resources, Musim Mas and Wilmar.

The KPPU said a requirement imposed by the IPOP demanding that its members only buy palm oil from farmers who plant sustainable palm oil was too difficult for small farmers to meet.

“In some points, the pledge is not in line with the Indonesian Sustainable Palm Oil [ISPO], which is a regulation for Indonesia’s palm oil industry,” the KPPU letter said.

The ISPO is a certification for legal compliance given out by the government. However, only a few companies in Indonesia are ISPO-certified. All signatories to the IPOP are also signatories to the ISPO.

The Consumer Goods Forum and the Tropical Forests Alliance 2020 lobbied for a better standard than the ISPO, which helped give birth to the IPOP. The IPOP goes beyond mere legal compliance as required by the ISPO.

IPOP members decided to ban clearing on four types of land: Primary forest, peatland, secondary forest and bush, regarded as land with a high carbon content. Meanwhile, the government only bans land clearing in primary forest and peatland as the ISPO only requires producers to avoid planting palm oil trees on high conservation value forest (HCVF), as opposed to IPOP members who are committed to avoiding high carbon stock (HCS) areas.

“That clearly violates the UUD [Constitution] as it stipulates that natural resources have to be utilized for the people’s welfare,” Gamal said.

However, IPOP legal team member Ibrahim Senen said the government had to prove that the pledge violated the law. “There’s no law that bans people from creating a higher standard,” he said.

Ibrahim also questioned the legal basis for the IPOP’s disbandment because the IPOP was simply a pledge, and not a legal subject in the country.

IPOP management team director executive Nurdiana Darus said the pledge did not aim to drive small farmers out of business.

“What we are hoping to achieve through the IPOP is the empowerment of small farmers. We are hoping to grow step by step because in the future, the market will demand sustainable palm oil from Indonesia,” she said.

Besides raising the concern of cartel-like activities, Gamal also accused the IPOP of submitting to pressure from foreign companies as it requires stricter sustainability practices. “Why do we want to be controlled by other countries?” he asked.

The Indonesian Chamber of Commerce (Kadin), meanwhile, said the presence of the IPOP was important to unlock foreign markets as the country’s palm oil industry was often criticized, and sometimes boycotted, by overseas buyers for its unsustainable practices.

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