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‘Indonesia risks palm oil exports if cultivation unsustainable’

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Centre for International Forestry Research (Cifor) senior scientist Herry Purnomo. CIFOR

‘Indonesia risks palm oil exports if cultivation unsustainable’

The snail-like pace at which Indonesia is improving the sustainability of its palm oil agriculture in the face of mounting pressure from global trade players could jeopardise the commodity’s future, experts have warned.

Among the critics of Indonesia’s palm oil agriculture management is Bogor Agricultural University (Institut Pertanian Bogor, IPB) forestry expert and Centre for International Forestry Research (Cifor) senior scientist Herry Purnomo, who said at a public discussion last week that concerns about the sustainability of the commodity had now stretched beyond the EU, with similar concerns being expressed in North America and Australia.

Echoing Herry’s warning, climate change and environment counsellor of the EU delegation to Indonesia Michael Bucki urged Indonesia to take action to curb deforestation caused by palm oil cultivation, which he said would impact “future generations, everyone, not only people of the EU”.

“What the EU people want is sustainable palm oil. So it’s a supply and demand [matter]. If there are sustainable palm oil products from Indonesia, we [EU] have the market. And the EU has an open market,” he said during the forum held by Cifor.

The bloc, he added, would prepare a review on biofuel between 2021 and 2023, with more dialogue to take place between the EU and the Indonesian government about sustainability in the meantime.

The Cifor discussion was held amid the prolonged feud between the two trading partners over the commodity, with Indonesia committed to fighting the EU’s ban on the use of palm oil for biodiesel, in addition to tariffs imposed on subsidised palm oil imports from Indonesia.

However, the EU is not the only developed market that has frowned upon the commodity’s cultivation because of the associated social, health and environmental effects. Numerous NGOs have also blamed palm oil cultivation for causing extensive forest clearing and destruction.

Nevertheless, Indonesia has been making some attempts to mitigate the issue of deforestation. A 2019 Environment and Forestry Ministry report revealed that 0.44 million hectares of forest had been cleared between 2017 and last year, which is a continuation of the slowing rate of deforestation that saw 0.48 million hectares cleared from 2016 to 2017, 0.63 million hectares from 2015 to 2016 and 1.09 million hectares from 2014 to 2015.

In an attempt to change how palm oil companies operate, the country has set sustainability standards through the Indonesian Sustainable Palm Oil (ISPO) certification scheme. The programme was launched in 2011, five years after the country introduced the multi-stakeholder palm oil market watchdog called the Roundtable on Sustainable Palm Oil.

The National Development Planning Agency also launched the “One Map Policy” last year that introduced one standardised geospatial information map to resolve the country’s long-standing spatial problems, including contradicting spatial information between different ministries that has led to palm oil cultivation in forestry areas.

Indonesian Palm Oil Association (Gabungan Pengusaha Kelapa Sawit Indonesia, Gapki) deputy chairman Togar Sitanggang claimed Indonesia’s policy on palm oil cultivation was “progressive” and that producers had been actively working to adapt to it. Producers, he said, had also been providing input to the government as well as developing fire prevention programmes to prevent forest fires.

“Because if we don’t try to adapt, it’s a risk, especially for our market share. By that [principle], we always try to provide what the world needs,” said Togar, adding that the association was working on the “huge” challenge of making sure association members followed the ISPO standards.

However, the Organisation for Economic Cooperation’s Green Growth Policy Review of Indonesia 2019 showed that despite its improvements, Indonesia still has the second-fastest rate of deforestation in the world, which the report blames on the expansion of agricultural land use and logging.

In regards to palm oil in particular, Statistics Indonesia data show that the country’s total plantation area increased to 12.2 million hectares in 2017 from 11.2 million hectares in 2016, 11.26 million hectares in 2015 and 10.75 million hectares in 2014.

Furthermore, the attention given to the recent fire and haze crisis is an example of “how the whole world is watching” as the country struggles to strengthen its fire prevention measures at the district level and below, Cifor principal scientist and value chains, finance and investment team leader Michael Allen Brady said on Thursday.

However, Togar of Gapki denied that palm oil producers should take all the blame for deforestation, pointing a finger at the lack of preparedness shown by regional authorities regarding land classification and technical matters.

The “scarcely regulated” smallholders are also guilty of causing forest fires that spread to the often-blamed corporate-owned oil palm plantations, Togar argued, adding that the government had failed to place the expanding plantations of crops such as corn and rubber under equal scrutiny.

Whoever was to blame, Herry of IPB and Cifor urged authorities to ensure its efforts to minimise deforestation and improve palm oil sustainability remained transparent, as incoherent information could foster distrust among the EU and other global players.

One area that requires greater transparency is the low compliance to ISPO standards surrounding illegal land use for palm oil cultivation. A 2018 Gajah Mada University study showed that around 2.8 million hectares of palm oil plantations were located in forestry areas, 65 per cent of which were owned by businesses, with the rest run by local communities.

At the same time, Herry expressed hope palm oil consumers like the EU would also provide incentives to encourage sustainable palm oil cultivation, which could lead to a more positive narrative about the commodity in the long term.

“As mandated by the Constitution, sustainability is a must, not a choice . . . I’m confident that we can achieve sustainability,” Herry said, referring to Article 33 paragraph 4 of the Constitution.

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