Zero-deforestation commitments in Indonesia: Governance challenges

Highlights

• Zero-deforestation commitments are emerging rapidly in Indonesia. They already encompass a large portion of crude palm oil production and almost all the pulp and paper (P&P) sector; typically, they reflect the values of the “no-deforestation, no-exploitation (social) and no-peat” policies.
• These commitments depend on definitions of ‘forests’ for their identification and conservation, which in turn rely on methodologies such as High Conservation Value and High Carbon Stock.
• Early implementation has revealed that the palm oil sector is facing a number of governance challenges to achieve commitments: the legal framework is not systematically supportive of the pledges, and the government promotes a different vision of sustainability. Of note is the fact that the P&P sector is more advanced.
• Integration of smallholders into sustainable value chains poses another challenge for the palm oil sector: traceability, better environmental performance and improved yields require urgent action. Legalization of smallholder operations is critical and goes beyond commitments, because it determines access to financing and certification, among others.
• To be effective, zero-deforestation commitments must align public and private governance arrangements. This requires an agreement on visions of sustainability supported by public policies; progress on land tenure; enforcement of progressive regulations at national and regional levels; and the implementation of strong policies to rationalize the expansion of small and medium holdings of oil palm.
• Legacy issues must also be addressed for the main palm oil and P&P groups: land restitution through due processes, support to smallholders and investments in land restoration are some promising avenues worth pursuing.

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