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Smallholders at the heart of Indonesia’s zero-deforestation dispute

Government and business may find common ground in supporting small-scale oil palm farmers.
The dispute over zero-deforestation pledges in Indonesia often comes down to questions of sovereignty and equity. Moses Ceasar/CIFOR

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Helping smallholder oil palm farmers become more sustainable will be crucial in resolving differences between the Indonesian government and palm oil exporters over zero-deforestation pledges, participants at the 2015 Global Landscapes Forum in Paris heard on Saturday.

A total of 188 companies in Indonesia’s palm oil sector—the world’s largest—have made some form of sustainability commitment, including 61 pledging to source supplies only from plantations not linked to deforestation, according to Pablo Pacheco, Senior Scientist at the Center for International Forestry Research (CIFOR).

This includes the five multinational palm oil trading companies that have taken the Indonesia Palm Oil Pledge (IPOP).

Yet last August, government officials publicly opposed such industry pledges.

“We have heard voices from government in the last few months against this zero-deforestation movement, and this opposition is built around perspectives on national sovereignty and equity,” Pacheco said.

While some government agencies are working to limit the negative effects of palm oil production, and a moratorium on the destruction of new primary forests and peatland remains in place, Pacheco noted that other public bodies were seeking to develop the industry through such tools as the new Crude Palm Oil (CPO) Supporting Fund.

“There is some thinking that the pledges on zero deforestation will threaten the livelihoods of smallholders who want to get into this CPO market,” he said.


Unilever’s Chief Sustainability Officer Jeff Seabright said that his company, which manufactures consumer food and household products around the world, was sensitive to consumer demands for greater sustainability. He referenced proposals to ban palm oil in France, the country hosting this year’s Global Landscapes Forum, because of this.

“But we can’t meet that demand if we don’t also address the supply side of the equation,” he said.

Yet with pledges by multinationals supplying consumer markets in developed countries having been described as a Western imposition on Indonesian sovereignty, Unilever sees working with smallholders as a solution.

“The current narrative says that being more sustainable in the way that we approach the palm oil sector is going to be negative for smallholder farmers,” he said. “It’s not in the national interest to proceed down that path.”

Rather, he added, it is now up to the industry to “provide a very positive narrative around how a very different and sustainable and more inclusive approach will increase incomes, increase yields, but not at the expense of more tropical virgin forest.”


A similar approach was suggested by Petra Meekers, Director of Corporate Social Responsibility and Sustainable Development at Musim Mas, one of the five IPOP companies.

“There is definitely a discussion to [take] further, linked to the government, on how we make sure that we first of all intensify on the piece of land that we have, but how we also help the other settings, particularly the smallholders, to use the best way to grow,” she said.

While it emerged from the discussion that companies could provide assistance to those farmers around their mills, many more smallholders live and work deeper in the forest—which means only large-scale government intervention is likely to have an impact on their practices.

The government and the private sector may therefore have no choice but to cooperate if they are to achieve more sustainable palm oil production without excluding smallholder farmers from the process.

The government tends not to consider the market perspective, Tiur Rumondang, Executive Director of the Indonesia Business Council for Sustainable Development, pointed out. By contrast, she noted, companies are focused entirely on meeting consumer demand.

“I think the goal is quite similar,” she said. “But the way of doing it and the perspective while thinking of the strategy to do it are totally different.”

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