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The hustle and bustle of the 2020 election is over. Now the elected heads of region are required to bring their regions to be ‘competitive’ in the competition to access the destination market for their products in their region. It is projected that post-pandemic, agricultural and plantation products will be the key products.
Nevertheless, the demands of developed countries’ market for Indonesian agricultural and plantation products are increasing. Currently, the main instrument of the European Union (EU) is product certification to realize the sustainable development principles. Among them are the standards for sustainable palm oil or Crude Palm Oil (CPO).
The European Union has issued a revision of renewable energy standards for biofuels in February 2019. Criteria for palm oil have been tightened, including not coming from deforested areas and having no indications of human rights violations. This policy will affect the chart of Indonesia’s palm oil exports to the European Union even though the region is still a strategic destination for palm oil exports. In 2020, the European Union was the second largest importer of palm oil from Indonesia, with 2 million tons of CPO, behind China’s 2.1 million tons.
However, differences in legal regimes and state jurisdictional sovereignty do not necessarily force EU requirements into law in palm oil producing countries such as Indonesia or Malaysia. Sustainability certification that follows the palm oil supply chain is an option. By the end of the day, producers cannot avoid the demands of consumers in the final destination country if they want their products to sell well.
In this regard, market-based voluntary certifications such as the Roundtable Sustainable Palm Oil (RSPO) have developed. Although Indonesia has pursued to develop a mandatory state-based certification scheme in the form of Indonesian Sustainable Palm Oil (ISPO), global buyers are still not moving away from market certification. The reasons certainly vary and it is entirely the buyers’ right.
The problems are a lot of spotlight and accusations are directed at sustainability certification. What arises is the foreign agenda or campaign. Perhaps, under the prudential principle, there is some truth in that.
Meanwhile, in reality, sustainability is an objective of domestic needs. Its presence amplifies environmental and social issues that have taken root in the law. But unfortunately, the implementation of these provisions faltered.
In the environmental sector, for example, the big wildfire, which happened in 2015 and reached 2,611,411.44 hectares (KLHK, 2020), re-emerged in 2019. Fires were not solely man-made. Natural factors also contributed, including the extreme dry season caused by El Niño. In the end, the problem was not limited by Indonesia’s domestic jurisdiction. It turned into a regional and global chaos.
In the social sector, land conflicts are still rife every year. In 2020, the Ministry of Agrarian Affairs and Spatial Planning, for example, recorded 1,201 cases of land disputes that are still in the settlement process. Reports from various independent organizations also confirm the trend of land conflicts that does not decrease every year.
Therefore, regardless of market motives and political interests of a number of countries in mobilizing sustainability issues, the demand for sustainability is in fact in front of our eyes, and it has become a menu of daily problems.
The elected leaders are required to respond to the domestic and global challenges by driving the competitiveness of agricultural and plantation products in terms of sustainability indicators in the global market.
One factor that the government and local governments can encourage is to establish sustainable jurisdiction. Conceptually, the jurisdictional or territorial approach is an effort to systematically address the challenges of sustainability by authorities and stakeholders in an area where the authority has the mandate to stipulate laws and regulations.
In this case, it is the local government whose performance should be assessed against measures to achieve the sustainability principles. The level can be Province, District, or City. This approach fills in the weakness of plantation-based certification that has been common so far. The ways include, firstly, the Regional Government through the Ministry of Home Affairs can package sustainability issues in regional performance indicators. So far, sustainability certification measures will only be effective in overcoming problems in the plantation permit area.
In reality, social and environmental issues know no limits on permits. Fires, for example, demolish ecosystems across permit and administrative boundaries. Likewise, social issues such as land tenure often arise from parties outside the permit area.
Second, the development of uniform monitoring and compliance indicators for all business actors. Only the government can perform the role of cross-plantation monitoring. For example, many plantations are still managed haphazardly, so their negligence affects the performance of other certified plantations. The local government takes this role to ensure equal treatment for all parties.
Third, affirmative action for small-scale actors, especially small smallholders. So far, the cost of certification is very expensive for smallholders. Approximately IDR 2.8 million per hectare. The presence of the local government assists those smallholders, not only for smallholders but also for implementing the constitutional mandate.
Fourth, multi-party. To ensure the integrity of the process and results, the local government has the authority to invite all parties, including the private sector and non-government parties, to collectively consider the best ways to systematically address social and environmental problems in their area.
These four ways are an agenda that can be driven because the authority of the local government is there. Apart from more easily reaching the market, local governments gain more value in the long term through a protected environment and more sustainable commodity production.
Whereas for the European Union and other consumer countries, sustainability on a large scale, such as districts and even provinces, provides more benefits both from the continuity of production quantity and the achievement of their goals towards low emission consumption. In the end, this approach becomes a win-win between developed countries and us as suppliers.
*Bernadinus Steni, Chief Legal Officer of Yayasan Inobu
This article has been published on Media Indonesia and can be seen at the following link: