Oil Palm in Indonesia

A Case Study

In nearly every story on deforestation in Indonesia, palm oil is the villain. Recent research, however, has shown that although the expansion of oil palm plantations was one of the major drivers (among several others) of deforestation, it has largely peaked and is in decline. In its place, wildfires and small-scale agriculture are now driving deforestation across the Indonesian archipelago. The social and environmental consequences of this expansion, however, are still felt throughout Indonesia.

In our new background paper for PROFOR’s Leveraging Agricultural Value Chains to Enhance Tropical Tree Cover and Slow Deforestation (LEAVES) Program, we explore the causes and consequences of oil palm expansion in Indonesia. We highlight the institutional factors that transformed a humble palm from West Africa into the bogeyman of international conservation movements.

Finally, we discuss several of the ongoing initiatives that have attempted to make the cultivation and production of oil palm both more sustainable and inclusive, focusing on:
1. Private supply chain certification systems;
2. Government supply chain certification systems;
3. Corporate zero-deforestation commitments;
4. Government policies and regulations;
5. Smallholder productivity and intensification; and
6. Jurisdictional approaches to certification.

We argue that as the demand for sustainably produced palm oil increases, a hybrid approach that supports and formalizes the participation of independent smallholders while reducing deforestation and environmental degradation is required. Although not the sole model, jurisdictional certification is one standard of a hybrid, jurisdictional approach that addresses many of these challenges, particularly when it eventually applies to all products exported from the jurisdiction. Understanding the benefits and
limitations of these initiatives while building market recognition for this model of sustainably produced palm oil requires empirical research supported by constructive dialogues among producer and importing governments, nongovernmental organizations, and the private sector.

INOBU’s work on oil palm also receives support from Earth Innovation Institute through the Norad-funded Forest, Farms and Finance Initiative; the David and Lucile Packard Foundation; and the German International Climate Initiative (IKI).

John Watts