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OPAL Project: Shaping pathways toward sustainable palm oil production

Working with countries to develop standards for trade
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Samsudin, an in oil plantation worker in Kartanegara Kutai District, carries a palm shovel. CIFOR/Ricky Martin

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When the Swiss government called a referendum in March this year over whether to sign a free trade agreement with Indonesia that would abolish tariffs on industrial products, palm oil — of which the Southeast Asian nation is the world’s largest producer and exporter — was in the hot seat.

The issue was polarizing, as is characteristic of debates involving the oil palm industry.

“It tends to be framed either as the worst thing in the world — terrible for the environment and the rights of poor laborers — or as an extremely important, low-cost commodity that is very efficient in terms of productivity and is contributing to development and uplifting people out of poverty,” said Jaboury Ghazoul, an ecologist at Swiss university ETH Zürich and co-leader of the Oil Palm Adaptive Landscapes (OPAL) project, which aims to improve the management of oil palm landscapes across tropical Asia, Africa and Latin America.

As they have done since the inception of the OPAL project six years ago, Ghazoul and his colleagues worked to paint a more nuanced picture. The lobbyists that opposed the deal were calling for a ban on all oil palm imports from Indonesia, unless they could be proved to be 100 percent sustainable. But transitions to more sustainable supply chains take time, investment, support and ongoing relationships, none of which are achieved by outright bans, said Ghazoul.

“It’s a very crude and non-constructive way of moving forward, that then leads to a number of other problems,” he said: notably, dialogue is closed up, meaning the country or region imposing the ban loses its seat at the table on debates about the industry; and vegetable oil then needs to be sourced from elsewhere, which can drive further agricultural expansion.

The ban did not pass: Swiss citizens voted — with a narrow margin — in support of the free trade deal. Ultimately, said Ghazoul, the debate was productive in that it “raised the discussion about the issue of sustainability and standards, and how we can apply these in trade — not just nationally but also internationally — and work with other countries to improve or develop standards.”

That is an area that OPAL, which is due to wrap up later this year, has been giving a lot of attention. “I think there needs to be recognition that sustainability is not is not a fixed target that you can work towards and once you’ve got it you tick a box and that’s it,” said Ghazoul. “Sustainability is a moving target – you can constantly improve the way you do source commodities, the way you source resources and so on. And it also needs to be recognized as something that you need to develop over time. If you suddenly introduce strict standards, you risk having lots of negative effects on people’s lives.”

Supporting smallholders

Shining a spotlight on how some of these knotty issues play out on the ground, Fakhrizal Nashr, a Ph.D. student at Bogor Agricultural University (IPB) in Indonesia — whose research is supported by the OPAL project — has been exploring what helps and hinders sustainability and livelihood creation for independent oil palm smallholders, in the district of Kutai Kartanegara in the province of East Kalimantan.

He’s spoken with smallholder communities in various parts of the district, and found that these communities are engaging with oil palm investment in a number of different ways – with key discrepancies in their results. Essentially, smallholders who formed cooperatives and engaged directly with oil palm mills fared much better than those who did not. “If they don’t build these direct relationships, with the mills and with each other, they end up with a very long supply chain – they need to sell to several local traders before that local trader sell it to the oil palm mills – and then they only get the bare minimum benefits from the oil palm business,” he said.

When profits are low and smallholders are unsupported to deal with challenges such as pests and diseases, and to maximize productivity on existing agricultural land, this can then prompt more expansion and deforestation, Nashr said. As such, he concluded, social and environmental sustainability in supply chains will only be achieved long-term if smallholders’ needs and concerns are taken into account, and structures built around them to enable this. “Rural communities often get the burden of blame for the landscape impacts of oil palm, and that seems unfair given how much they are doing by themselves with very little in the way of access to knowledge, infrastructure or support,” he said.

Building understanding and sourcing solutions through role-play

That burden of blame is one thing that the OPAL team has worked hard to dispel – along with misunderstandings and polarization in oil palm landscapes and supply chains more generally. That’s one thing for which the companion modeling methodology they’ve integrated into the project — a participatory approach that uses role-playing games and simulation models to tackle complex issues — is particularly useful.

“If I show you how the supply chain is organized using a PowerPoint presentation and some beautiful pictures, you’ll get something out of it,” explained Claude Garcia, OPAL project co-leader and a tropical ecologist at the French International Centre of Research and Agronomy for Development (CIRAD). “But if you are role-playing a smallholder who is struggling to make ends meet, and then you lose your crop because you didn’t make it in time, it’s painful. Your emotions are extremely powerful, and they completely change your understanding of what’s going on in the landscape and for the other people involved in it.”

That often has the effect of undermining stakeholders’ long-held certainties about the situation, he said. “We all have illusions of understanding; we think we understand the complexity of our supply chain, and the strategies and interests of the other components, but our knowledge is usually more incomplete than we realize,” Garcia said. “So the first task to reduce polarities is to shatter this illusion, and help people understand that things are more complex than what they think they are.”

While OPAL as a project is drawing to a close, it is hoped that the nuanced and multi-layered perspectives that it has brought to such a contentious issue will live on in hearts, minds and further research.

When you do this, you make change possible, as the team has witnessed in the field, Garcia added. “New cooperatives have been created, new contracts designed, new agreements sealed and new standards adopted. This is how the transition to sustainability happens.”

For more information on this topic, please contact Heru Komarudin at h.komarudin@cgiar.org.
This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.
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