Move Beyond Supply Chains to Achieve Sustainable Palm Oil in Indonesia
It’s time collate our lessons learned through monitoring individual supply chains and put them into scalable action
Over the past decade, as we have faced challenges such as climate change and deforestation head on, many companies have been working within the paradigm of change in their own supply chains. The thinking is that if enough supply chains are activated then we will reach a tipping-point and see a paradigm shift in the entire sector. However, especially when it comes to palm oil in Indonesia, there are serious limitations due to the presence of root causes which cannot be addressed, by one or even many companies working together in their own supply chains.
“Beyond supply chains” is a call to action to transform the palm oil sector by working with the Indonesian government at the local and national level and with our existing partners. However, this does not mean we work only on the status quo such as pilot projects or purchasing based on risks. Yes, we continue this work but we need to go beyond this, and take the solutions we’ve created in our individual supply chains to identify the institutional changes that need to happen in order to secure sustainable solutions for the long-term.
How to Achieve Sector-Wide Transform for Indonesian Palm Oil
The United Nation’s Development Programme is uniquely positioned through its partnership with the Indonesian government to build understanding, trust and partnerships. Through the Green Commodities Programme we are currently working with six countries to create multistakeholder national action plans for sustainability in a range of commodities including palm oil, cocoa, soy and beef, and we are making progress. This year our pineapple platform in Costa Rica officially adopted a widely endorsed national action plan to tackle serious social and environmental concerns in the critical sector, worth US$ 800 million to the national economy.
In Indonesia, we are facing an unprecedented challenge to sustainably transform the palm oil sector. The industry is vast, blanketing some 11 million hectares of land and consisting of a generally unknown number of often ill-equipped smallholder farmers (somewhere between 1.5 – 2 million), who manage almost half of the nation’s oil palm plantations. Institutional, inadequate mapping and uncertain legal barriers compound the complexities further. Yet, however daunting these challenges seem they can be overcome if we join forces, support the government and move beyond our own supply chains.
Many companies have been working on these issues for a long time, and the way they approach them has evolved. They have used risk approaches with country and origin analysis. They have used contract clauses to define sustainability for suppliers. We have worked together to develop sustainability standards and companies have made commitments about sourcing certified material. They have also been implementing systems for traceability, and making commitments beyond existing certification.
This work that companies do through responsible sourcing is very important, and tools such as certification have been instrumental in defining sustainability for palm oil. However, certification is not a panacea. These tools are generally not able to solve the underlying issues leading to non-compliances, often leaving a gap between the policy environment and good environmental and social practices. We’ve come a long way, but for especially those of us who spend time in the field, we know we are not there yet. We need a different tool to address the root cause governance issues.
Work With InPOP to Achieve Sector-Wide Reform
The Indonesia Palm Oil Platform, InPOP, is a vehicle to drive industry and governance reform in the Indonesian palm oil sector. The process provides a space for government, industry and civil society organisations to discuss their issues and to collectively devise the reforms needed to overcome barriers to sustainability.
One such example is our work around smallholder legality, specifically around the clarification of smallholder business and land registration documentation (STD-B and SPPL) that was agreed by the platform to be a significant barrier. InPOP facilitated a discussion between local government officials and the Ministry of Agriculture, which clarified STD-Bs were initially intended as a registration tool to create a database of smallholder locations, land ownership and hectares etc. This means local governments can accelerate the issuance of STD-Bs following simpler procedures.
InPOP also plays the vital role of convening all of the great work around sustainability and palm oil. This includes our efforts in convening the ISPO and RSPO standards, opening-up channels of communication between private sector initiatives such as IPOP as well as hosting inter-ministerial discussions between the Ministry of Agriculture, the Ministry of Environment and Forestry, the National Planning and Development Agency (Bappenas) and the National Land Agency (BPN). There’s no denying the surplus of certification standards, sustainability schemes, pilot projects and deforestation pledges. While this is good work, it can only achieve so much without recognition from the Indonesian government and without the mechanisms to coordinate these efforts into implementable action. InPOP, which is led by the Ministry of Agriculture and uniquely facilitated by the UNDP, is in the position to endorse these efforts via the National Action Plan for Sustainable Palm Oil so that they can be scaled-up with the support of the Indonesian government.
I call on the companies within the TFA 2020 to join InPOP in scaling-up sustainability throughout the palm oil supply chain. Depending on the company’s role in the supply chain, participation can be in the form of attending working group meetings, contributing to public consultation, asking your suppliers to come to the table, or by funding part of the platform’s work.
Ask yourselves, do we continue working in silos and reinventing the wheel? Or do we pull our resources and experience to make real and lasting change with the support of government?
Kate Bottriell is a Senior Advisor for the UNDP’s Green Commodities Programme. InPOP is supported by funding from SECO, IKEA, Mondelēz, and Solidaridad.