Indonesia: NGOs’ changing roles in sustainable agro industry

Edi Purwanto and Soren Moestrup Jakarta Post 30 May 16;

Indonesia’s economic development and resource utilization are largely driven by global demand. At present a large part of natural-resource management is in the hands of the private sector.

Palm oil is a prime example, as the unprecedented growth in global demand, during the past 20 years, has resulted in major changes in land use in the country. Without strong governance and law enforcement on natural resources and land use, the expansion of palm oil production has resulted in a dramatic loss of forests through deforestation, as well as ecosystem degradation.

During the last decade, growing consumer expectations that agro-commodities should be environment friendly and sustainably produced have provided drivers for civil society campaigns on investor and company producer practices to better comply with environmentally friendly and socially sensitive commodities. Such consumer expectations and campaigns have become new drivers of sustainable resource management and utilization in production chains, as well as at landscape level and have as such supported the government in law enforcement on the sustainable production and use of natural resources.

Consumers and investors are participating in commodity-specific forums, such as the Roundtable on Sustainable Palm Oil ( RSPO ), which has initiated strict standards preventing oil-palm plantation development in areas with a high carbon stock ( HCS ) or of high conservation value ( HCV ). The sustainability standards, to which RSPO members are committed, can lead to a positive environmental impact on the development of new palm oil plantations. RSPO members have an obligation to compensate HCV areas that have been lost to deforestation since 2005.

Given RSPO members control the largest palm oil concessions in the country, the scheme, in combination with a declining palm oil price, reduced the establishment of palm oil plantations by more than half a million hectares per annum in the period of 2007-2013.

Consumer expectations on environmentally friendly and sustainably produced agro-commodities have also led to an unprecedented increase in the number of companies that have adopted strict environmental regulations on sustainable management and production systems.

Prime examples include APP Pulp and Paper, which in 2013 first published its sustainability targets announcing an immediate halt to natural forest clearing throughout the supply chain. Major palm oil companies Wilmar International, Cargil Inc., Golden Agri Resources, Asian Agri and Musim Mas have signed the Indonesian Palm Oil Pledge ( IPOP ), “No deforestation, no peat, no exploitation policy”, which is a commitment to transparency, accountability and to ensuring compliance of all third-party suppliers. Oil palm and pulpwood plantations take up about 11 million ha and 3.5 million ha ( out of 10 million ha granted permits ) of land in Indonesia, respectively.

The growing concerns on environmental safeguards have also been well responded to by the government. As part of a larger goal of reducing deforestation and carbon emissions, President Joko “Jokowi” Widodo extended, in May 2015, a moratorium on the clearing of primary forests and peatlands.

It was the second time the ban on issuing concessions to plantation companies had been renewed since a presidential decree was issued in 2011. In May 2016 the President plans to issue a decree on the suspension of new oil-palm plantation development. This applies to the suspension of the Environment and Forestry Ministry’s authority to release convertible state production forests ( outside the existing moratorium map ) for palm oil plantations.

How do the conservation NGOs in this country respond to this development?

NGOs have come to realize that anti-corporate demonstrations, organized boycotts, and protests can be far more effective and powerful than anti-government campaigns, particularly when targeting established, reputable global brands. In response, corporations have attempted to identify and select the available areas and opportunities to cooperate with NGOs to cement fruitful relationships. Some leading conservation NGOs are involved in safeguarding the environmental sustainability of leading palm oil and pulp and paper companies.

When building partnerships with the private sector, the NGOs should not forget their long-term watchdog function and therefore continuously monitor the environmental effects of private companies’ involvement in the protection of Indonesia’s natural resources.

NGOs should be able to manage the impacts of IPOP on smallholder plantations; they have to facilitate buyers, producers, banks and other financial institutions with a practical guide on how to engage with smallholder farming-related challenges and opportunities, especially on access to markets, financing innovation, improving legality, preventing deforestation and remediating agricultural labor problems.

With reliable, verified and well-framed evidence, NGOs have strategic roles in assisting government and frontrunner companies to create and strengthen strategies in multi-stakeholder dialogues on policy change that improve smallholder resilience and sustainability.
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Edi Purwanto is a director of Tropenbos International Indonesia. Soren Moestrup is senior adviser at the Department of geoscience and natural resource management at the University of Copenhagen.