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Commentary by John Watts; Dan Nepstad; and Silvia Irawan on 10 July 2019
The fall of the Suharto regime and the beginning of the democratic or reformasi era in Indonesia coincided with a massive surge in deforestation. One of the central reasons for this surge was the decentralization of authority for land and forest management to the district level in the early 2000s. Local governments were both ill-prepared and unequipped to deal with this sudden delegation of responsibility. Plantation companies, eager to expand their holdings, were able to benefit from this new political environment, which consequently led to the massive expansion of plantation areas. The environmental and social consequences of this mostly unmanaged and unplanned expansion were extensive, and the effects of this era continue until today.
The rapid expansion of oil palm plantations during this era cemented the negative impression of oil palm in the minds of activists, non-government organizations and consumers around the world. Oil palm, in itself, is neither good nor bad. As one of the most efficient oil crops in the world, its derivatives are used in a seemingly endless array of products, from cooking oils to cosmetics and confectionary, to biofuel. Consequently, it is the best placed crop to meet the increasing global demand for consumer goods while minimizing the expansion into forest areas. Despite these advantages, it remains one of the most maligned crops in existence today.
Although the negative social and environmental effects of oil palm expansion reflect a failure of decentralized governance, local governments have not yet been a major part of the efforts to solve the problem. Governments were notably absent from the Roundtable on Sustainable Palm Oil, formed in 2004 to promote the sustainable production and use of palm oil, and its certification systems. Since 2010, zero deforestation pledges from producer and buyer companies became a trend, including business groups such as the Consumer Goods Forum, followed by governments in developed countries, through commitments such as the Amsterdam Declaration in 2015. Many companies set a date of 2020 as the target for zero deforestation supply chains. With just a few months until 2020, most of these pledges are unlikely to be met. There are many reasons that these commitments have been challenging to implement, including: splitting the market, deepening rural food insecurity and poverty, penalizing farmers and farm businesses who are striving to comply with the law, antagonizing governments and farmers in target regions, and creating too many new requirements for producers and processors, to name a few.
As the Indonesian government became more sensitive to the effects of environmental campaigns on the production and sale of their palm oil, they issued several policies for reducing deforestation, including issuing a moratorium on plantation expansion and the Indonesian Sustainable Palm Oil certification system (ISPO). These initiatives, however, did not extend down to local governments.
Recently, the potential role of local governments as key actors in solving deforestation has been highlighted. Here we present one pathway for engaging local governments through the example of a pilot of RSPO jurisdictional certification in Central Kalimantan. We demonstrate how jurisdictional certification has been used as a collaborative pathway for overcoming the obstacles to sustainability and catalyzing regulatory and institutional innovations.
The jurisdictional approach to the certification of palm oil in practice refers to the application of the RSPO Principles and Criteria at the level of the jurisdiction. Ideally, it should simplify and reduce the costs of certification thus expanding RSPO coverage while improving social and environmental outcomes. All actors in the palm oil supply chain, from independent smallholders, medium to industrial scale plantations, mills, traders and transporters should be covered. The central challenge of the approach is how to simplify, expand and reduce the costs of implementing the Principles and Criteria without diluting them.
Jurisdictional certification is still in the pilot phase, with three ongoing pilots in Ecuador, the State of Sabah, Malaysia, and the district of Seruyan in the Province of Central Kalimantan, Indonesia. The first of these pilots, Sabah, was first announced in 2015, followed shortly by Seruyan and Ecuador, meaning that the processes are still in their infancy. The diversity of jurisdictional scales reveals one of the most important constraining–and enabling–aspects of jurisdictional certification: the level of government responsible for jurisdictional certification relates to its level of devolved or decentralized authority. Whereas in Malaysia, which is a federation, states have the relevant authority, in the case of Indonesia, a unitary republic, districts have the most relevant decentralized authority. As the role of sub-national governments are central to the implementation of jurisdictional certification, the Principles and Criteria should be implemented in the context of the prevailing laws and regulations, where possible. This translation between voluntary principles and criteria and legal frameworks will never be precise.
Most importantly, jurisdictional certification is also a collaborative effort by local governments, producers and civil society organizations, supported by donors and buyers, to meet sustainable and inclusive palm oil standards. It is a collective effort, driven by democratic governments, to improve the sustainability of production for the benefit for both producers and the citizens of the jurisdiction. It requires the support by various different stakeholders including the private sector and this has started to be seen by the direct involvement by companies willing to pilot the concept. Unilever has been supporting various jurisdictional sustainability approaches including with Yayasan Penelitian Inovasi Bumi (INOBU) in Central Kalimantan, Indonesia and with the World Wildlife Fund (WWF) in Sabah, Malaysia in effort to go beyond the typical supply chain certification schemes and work at a jurisdictional level to drive sustainable production and protection of a landscape. This approach differs from the prevailing approaches that seek to apply externally determined criteria to tropical jurisdictions. The costs of certification are also shared among the different parties so that the financial burden is not on tropical governments and their constituents alone.
We discuss how this collaborative approach has been implemented in practice through the example of Seruyan District.
Seruyan, A Palm Oil District
Since the beginning of decentralization in Indonesia, Seruyan District has, in many regards, represented the worst aspects of the palm oil boom in Indonesia. Consequently, it also provides a good model of how to stop and even reverse the socially and environmentally detrimental aspects of oil palm expansion.
Located in the province of Central Kalimantan in Indonesian Borneo, the district has experienced extensive land use change in its southern and central regions since the 1990s. Initially driven by forestry concessions, the decentralization of authority to district governments in the 2000s led to an allocation of oil palm plantations in the central part of Seruyan district. The allocation of oil palm concessions led to further deforestation and dispossession of local and indigenous farmers. The backlash to this plantation development led to the election of a district head, who, in part, campaigned on a platform calling for socially inclusive oil palm development. In 2015, the former head of Seruyan district, Sudarsono, declared his commitment for the district to become one of the Roundtable on Sustainable Palm Oil’s pilot jurisdictions for jurisdictional certification. Since then, the district has begun a comprehensive program of activities for promoting sustainable and inclusive oil palm production and has not approved any new oil palm concessions but instead has focused on supporting smallholders. With the exception of fire-related forest loss during the severely dry El Niño years, deforestation and forest degradation has largely stabilized in the district (Figure 1), with forestry operations in the northern part of the district responsible for most of the ongoing forest degradation. Although there are extensive forest areas in the north of the district, as well as forests in the south, especially in the protected areas, there is no connectivity between these forests, largely caused by the establishment of oil palm plantations in the central part of the district (Figure 2).
Figure 1: Deforestation in Seruyan district from 2001 to 2017. The chart shows the rates of deforestation in Seruyan district based on data from the Indonesian Ministry of Environment and Forestry as well as from Hansen and others. The spike in deforestation in the period of 2015 to 2016 was caused by fires that were exacerbated by the El Niño event during that period.
Figure 2: Land cover change in Seruyan District from 1990 to 2016 based on data from the Indonesian Ministry of Environment and Forestry.
Collaborative Learning and Innovation at the District Level
The challenges faced by the people of Seruyan and their natural environment cannot be solved alone by current supply chain certification approaches, including RSPO and ISPO certification. Here we highlight four challenges that prevent the sustainable and inclusive production of palm oil, including meeting RSPO certification requirements.
INOBU and EII are currently supporting the district government to develop a district spatial and environmental management plan. The process involves the first district carrying capacity assessment, which is being supported by the Ministry of Environment and Forestry, and involves spatial modelling and ecological field surveys to establish hard restrictions on the conversion of native vegetation to other uses, and guidance for maintaining water supply and controlling fire and other risks. Revisions to the draft spatial plan have been proposed that include increased forest and peatland protection, areas for rehabilitation and a proposed wildlife corridor along the riparian areas, that will connect the main forest areas in the north and south of the district. The carrying capacity assessment is defined under Law No. 32/2009 on Environmental Protection and Management and is under the authority of the Ministry of Environment and Forestry. This will also result in the jurisdiction-wide environmental protection plan, formalized by a district regulation or peraturan daerah, that will guide the implementation of environmental protection in the entire district. Seruyan will be the first district that has such documents.
Through the work in the pilot districts, a plantation monitoring system known as SIPKEBUN, was developed by INOBU in conjunction with the Ministry of Agriculture and provincial and district governments. The system involves an innovative, integrated Android application for mapping plots and registering oil palm smallholders. The application has also been used for mapping and registering nutmeg producers in West Papua, and is planned to be expanded to other provinces and commodities in Indonesia. The Ministry of Agriculture is in the process of agreeing on using a modified version of the system for registering and issuing cultivation certificates for small-scale commodity producers across Indonesia.
The PELITA Agricultural Facility was designed and launched in 2018, under the leadership of INOBU, to provide inputs, training and eventually credit to independent smallholders in Seruyan district. The facility is initially focused on oil palm smallholders before expanding to other commodities. The facility is an independent association comprised of representatives from the district government, agribusinesses and mills, and non-government organizations, including INOBU. Each of the members makes financial or in-kind contributions to support the activities of the facility. The facility is the first of its kind in Indonesia.
A pilot initiative for implementing FPIC at the jurisdictional (district) level to resolve land conflicts has been launched. The FPIC mechanism will include a standard operating procedure for preventing and mediating conflicts, which will be supported by a district regulation and tied to the plantation monitoring system. The design is currently being discussed with the relevant non-government organizations, including the Forest Peoples Programme (FPP). This initiative is the first of its kind that we are aware of in Indonesia.
Although the legal framework and delegation of authority to district governments provide opportunities, they also limit the scope of what can be achieved by these governments. The main constraint on district governments in Indonesia in the context of jurisdictional certification is that the forest estate remains under the authority of provincial governments. District governments only have authority over the people who live in forest areas and can propose changes to the forest area. Ultimately, however, management authority for these areas resides with the Ministry of Environment and Forestry, devolved to the provincial level. District governments also have limited authority for revoking existing licenses that were responsible for causing social or environmental harm in the past.
And, despite the ongoing efforts of the Indonesian government and the anti-corruption commission, corruption remains a persistent problem at all levels of government. A recent case in Seruyan District, where it is alleged plantation companies bribed provincial parliamentarians, demonstrates the challenges of working with governments in Indonesia. The actions of a few have the potential to tar the efforts of the many. At best, the jurisdictional certification process aims to improve the transparency and governance of the palm oil supply chain, reducing the opportunities for rent seeking behavior.
Don’t forget the landscapes for the jargon
Jurisdictional certification, in the right context, offers the potential of achieving inclusive and sustainable production of oil palm at a large scale. Jurisdictional certification also offers the clearest pathway for implementing landscape approaches to sustainable production that are strengthened by laws and regulations and embedded in multi-stakeholder, collective initiatives. Its effectiveness derives from its technocratic approach, although this type of approach may have limited appeal to consumers and other actors in the palm oil supply chain. The Seruyan pilot does not yet have a strong marketing component, although the potential should grow as the innovations described here are fully implemented. A good example of this is WWF Malaysia’s Living Landscape Program in Sabah, which promotes production, protection and restoration, while still contributing to the broader jurisdictional certification program.
And, although jurisdictional certification is a promising approach for catalyzing innovative approaches for sustainable and inclusive production, there are many challenges. A global drop in palm oil prices, which has led to reduced demand for smallholder fresh fruit bunches, means that jurisdictional certification for palm oil, by itself, is not sufficient. Single commodity certification should be seen as the first step in a pathway towards a diversified, sustainable production landscape, which is resilient to market fluctuations.
The new, stricter RSPO Principles and Criteria, especially related to no deforestation, also present challenges in their application at the jurisdictional level. Despite the general consensus that there is a need to reduce deforestation, some land clearing is necessary for agricultural production and infrastructure development. Zero net deforestation has been proposed as an alternative compromise, although how that will align with the new Principles and Criteria, and their application at the jurisdictional level, still needs to be discussed.
On the flip side, there is a surprising lack of evidence that corporate zero deforestation pledges or RSPO certification as traditionally applied are having significant effects on regional deforestation trends in Indonesia. They are certainly not yet leading to regional, systemic approaches, embedded in public policies and regulations, to the issues of deforestation, land conflict and smallholder inclusion. The hope is that the jurisdictional approach can act as a bridge towards national level reforms.
Finally, although the benefits of jurisdictional certification derive from the collective action from producers, governments and civil society, it also presents challenges. Two major challenges to jurisdictional certification are: finding appropriate mechanisms for sanctioning for non-compliant producers and equitably distributing the benefits of certification, including price premiums. These issues would need to be managed by a jurisdictional certification management entity, which would also be required to manage audits, and conversely, be capable of being audited.
Despite these challenges, jurisdictional certification presents an opportunity and a model for protecting and restoring tropical landscapes while improving the welfare of farmers and protecting human rights. It takes sustainability standards to the right scale where issues such as wildlife corridors and riparian forests as well as systemic legal protections for human rights are possible. It also provides the incentives and mechanisms for collective action at the landscape scale, including partnerships with buyer and consumer goods companies as well as donors. Models such as these are needed if we are to reduce tropical deforestation and environmental degradation in the near future.
John Watts is Director of Strategic Initiatives at Inovasi Bumi. Dan Nepstad is Executive Director & President at Earth Innovation Institute. Silvia Irawan is Executive Director at Inovasi Bumi. Acknowledgements: The work described in this Commentary was funded by grants from the Norwegian Development Agency (NORAD) and the German International Climate Initiative (IKI) to the Earth Innovation Institute, and grants from the David and Lucille Packard Foundation and the United National Environment Programme to INOBU.
Disclosure: the authors are involved with efforts to implement a jurisdictional approach in Seruyan Regency.
This article has been published on Mongabay and can be seen at the following link: https://news.mongabay.com/2019/07/can-jurisdictional-certification-curb-palm-oil-deforestation-in-indonesia/