Jurisdictional Approach: How to Achieve Sustainable Palm Oil on a Large Scale

Yayasan Inobu is seeking to transform the palm oil supply chain and bring impacts at scale. Since 2013, the nonprofit has worked closely with local governments to support sustainable palm oil production and climate mitigation efforts in Central Kalimantan.

Palm oil is a key ingredient in so many products sold on supermarket shelves. It makes our soaps lather well, is used to flash-fry our instant noodles, and prevents our ice cream from melting too quickly. It’s in our lipsticks and biscuits. 

Palm oil is nearly in everything that we use in our daily life.

Moreover, oil palms are incredibly efficient. They can produce more oil per hectare compared to any other vegetable oil crops, such as sunflower, rapeseed, and soy. Oil palms can also yield all year round, require fewer pesticides, and need less fertilizer. Because of these attributes, palm oil — also called liquid gold commodity — is the most popular oil for our modern products. 

The high demand for palm oil drove massive expansions of oil palm plantations in tropical countries like Indonesia and Malaysia, lifting many smallholders in rural communities out of poverty. However, it has come at a cost. 

The cultivation of palm oil has caused deforestation in tropical forests, resulted in the loss of biodiversity, and displaced many local and Indigenous communities. The increased awareness of environmental and ethical issues among consumers has prompted retailers and consumer food companies to ramp up their sustainable sourcing practices and to achieve the zero-deforestation goal.

But, among the challenges in implementing sustainability are traceability and transparency. Oil palm trees are grown in the deep, vast rainforests, making it hard to include all producers in the sustainability efforts to halt deforestation. Many smallholders, with limited financial resources and capacity, are disadvantaged in terms of obtaining the certificates. Consumers are also unsure if they can purchase certified palm oil that is not mixed with products from unsustainable practices along the supply chain.

So, how can we ensure large-scale sustainable palm oil production on the ground?

A new system has been developed to tackle these systemic issues: a jurisdictional approach. The approach aims to collaborate with local governments within a jurisdiction and bring all stakeholders to achieve agreement on sustainability targets and milestones. Unlike the conventional approach, which focuses on specific plantations in different regions at a time and brings only fragmentary impacts, the jurisdictional approach offers novel ways to address systemic problems in supply chain sustainability. With multi-stakeholder coordination at a jurisdictional scale, we can upscale innovative solutions for wider impacts. 

Today, the jurisdictional approach has been adopted in many sub-national regions across the globe. Among these pilots are the district-level initiative in Kotawaringin Barat and Seruyan, Central Kalimantan, called the Mosaik Initiative.

The Mosaik Initiative, supported by Yayasan Inobu and Unilever, is led by the authority with the power to govern and apply the law within the jurisdiction — in this case, Kotawaringin Barat and Seruyan. The two districts are applying a bottom-up multi-stakeholder process to improve sustainability in palm oil production by reducing deforestation and improving the well-being of local communities.

The Mosaik Initiative is seeking to prevent deforestation, promote human rights, and improve transparency in the palm oil supply chain at a greater scale. Yayasan Inobu is applying a collaborative approach to research and technology to address the underlying environmental, social, economic, and agronomic problems faced by smallholders.

Yayasan Inobu is working with different stakeholders to help the certification process among independent smallholders, connect farmers with international markets, and realize sustainable production of palm oil. These steps are essential to help us achieve sustainable palm oil that can empower rural communities while protecting the environment.