Recent commitments from major international corporations to ensure that their supply-chains are deforestation free, have gained a lot of attention. At the 2014 United Nations Climate Summit in New York, commitments from four major palm oil companies led to the signing of the Indonesian Palm Oil Pledge (IPOP).
The pledge included commitments to transparency, accountability, ensuring compliance of all third-party suppliers, improving smallholder productivity and community participation in palm oil production and processing, advocating for and implementing policies that empower local communities, and the proactive engagement of stakeholders and government on policy reform.
Until now, the “No Deforestation” movement has been dependent upon the power of the market – consumer purchasing and financial sector standards, driven by NGO lobbying – to drive change among producers. But the effective and broad implementation of standards across the supply base faces three major challenges.
- Growing domestic and foreign markets in India and China will not drive the uptake of sustainability standards across the supply base.
- Governments can play an important role by clarifying tenure and licensing processes and creating a regulatory and policy environment to support the implementation of corporate sustainability commitments. Private commitments that go beyond regulation tend to face resistance due to perceived losses in sovereignty and the potential for negative economic impacts.
- Although companies may pledge to empower local communities,the capacity of corporate entities and their lobbying efforts to represent smallholders and communities may be questioned. Some actors – including governments – point to the possibility that small-scale actors will suffer significantly.
The “No-Deforestation” movement has the potential to mobilize huge amounts of funding and capacity building from the private and public sector – particularly investments in smallholders, local communities and ecosystems – but a failure to reach a common definition and methodology for achieving sustainable palm oil agriculture is slowing progress and threatening to thwart efforts on all sides.
A unique paradox now exists. Companies have no other choice than to meet the sustainability requirements of the markets in which they operate. But legal frameworks and public policies prevent them from meeting these requirements. Future outcomes are therefore uncertain and corporate commitments may bring considerable risks as well as potential benefits.
Deforestation and land use change are a major cause of global GHG emissions. Therefore, addressing deforestation as part of a new climate agreement is imperative.
This Discussion Forum is also pertinent to a number of the Sustainable Development Goals as it deals with novel governance architectures for delivering more equitable and secure land governance processes. These reforms can help contribute to the sustainable management of natural resources, sustainable agricultural models, ensure sustainable consumption and production patterns, and protect, restore and promote sustainable use of terrestrial ecosystems.
The chair of the session will give a 5 minute introduction, providing the background to the pledge as well as the main points of interest and challenges that will be addressed by the forum. The chair will then begin by asking prepared questions to each of the panelists (one question each) so that each panelist will be able to outline their main concerns or interests. No power point presentations will be used in order to facilitate a lively discussion.
Questions from the chair to panelists will continue for half the time and mobilize a debate. The second half of the Discussion Forum will be dedicated to questions from the audience.
Key questions addressed
- What are the sustainability goals for the oil palm sector?
- What are the differences between sustainability goals as defined by private commitments and public policies? Do they differ in their very concept of sustainability or are differences relatively small and easily reconciled?
- Is there scope for reconciliation? Will current contradictions prevent the emergence of more hybrid (public-private) governance approaches?
- How can new governance structures be legitimized? Question of sovereignty?
- What are the potential consequences of differing private and public definitions of sustainable oil palm in Indonesia?
- Who will be the winners and losers under the current situation? Are government concerns regarding negative economic/rural development impacts justified?
- Is it possible to manage the potential negative impacts?
- Where is current resistance coming from and why?
- Would the government and some companies favor market fragmentation (different standards based on different markets)?
- What is the role of the state in supporting private commitments to sustainability that contribute to public goals of economic and social development?
- What safeguards need to be put in place to protect smallholders and SMEs, and how can commitments be leveraged to upgrade smallholder production systems?
- What tenure, licensing and regulatory barriers need to be addressed in Indonesia?
- What other factors have to be in place to improve the environment for sustainable businesses?
- The potential use of the Government CPO fund?
- Legacy! How can companies (CGMs retailers etc.) compensate for years of profiting from cheap/poor production practices/standards?