Indonesia’s President halts signing of weak palm oil regulation and stops new plantations

In a landmark week in Indonesia, President Joko Widodo has delayed signing a new regulation on Indonesia’s Sustainable Palm Oil (ISPO) standard after NGOs in Indonesia raised increasing concerns that it will weaken, not strengthen, its credibility.

The President did, however, sign into force a long-awaited moratorium which prohibits any new palm oil plantation permits being issued for the next three years and which will review existing palm oil permits.

Earlier this month, EIA’s Indonesian partner Kaoem Telapak wrote a letter to the President), urging him to delay signing a new ISPO regulation and instead continue a national consultation process on ISPO reform. Days later, more than 40 other Indonesian environmental NGOs – members of an ISPO civil society coalition with Kaoem Telapak – reiterated that call.

Joko Widodo (c) Government of Indonesia

Joko Widodo (c) Government of Indonesia

To his credit, the President seems to have listened – the draft Presidential Regulation was not signed and a national consultation on the new ISPO has now been pledged, again.

Indonesia first started to reform the ISPO in 2016 in order to strengthen it. The ISPO reform consists of a new Presidential Regulation (PerPres) which sets out the high-level principles, and new a Minister of Agriculture implementing regulations that will provide the details of how the standard will be put into practice.

Despite an initially participatory approach during 2016, since late 2017 the process of agreeing the revised principles and standards underpinning the new ISPO has become steadily less transparent, with a new weak ISPO regulation crafted behind closed doors. A promised national consultation on the new ISPO has never materialised and input from civil society and regional consultations during 2016 has largely been deleted from the draft texts.

Indonesian civil society has highlighted that the new draft ISPO presidential regulation has:

  • no principle on protecting on primary natural forests and peat;
  • no principle on respecting human rights;
  • no independent monitoring of the ISPO system – independent monitors are only part of ISPO Committee;
  • no grievance mechanism;
  • no regulation on law enforcement and sanctions in cases of is non-compliance.

The draft ISPO regulation also gives just 90 days for the implementing regulations that will incorporate the revised ISPO standard itself to be signed into law. It is understood very little substantive consultation on the revision of the current ISPO certification standard has occurred to date.

Indo palm oil deforestation

Former rainforest devastated for palm oil production, Indonesia

The ISPO’s poor standards and record has not earned it international recognition; its reform is meant to increase its uptake and credibility in world markets. The current ISPO is considered the weakest of all the palm oil certification schemes and it had has little uptake, despite supposedly being mandatory since December 2014. Land legality issues which have plagued the palm oil sector in Indonesia have been one of the reasons for its slow uptake. More than four years since it became a requirement, only 413 certificates had been issued as of September 2018, covering 2.34 million hectares out of 14 million hectares – merely 16.7 per cent of the industry. Over 80 per cent of oil palm plantations in Indonesia are therefore not certified to even this most basic standard.

The enhancement of ISPO has been promoted in the Comprehensive Economic Partnership Agreement (CEPA) Free Trade Agreement currently being negotiated between Indonesia and the European Union (EU). Draft texts for CEPA’s sustainability chapter – leaked in June 2017 – stated that the EU and Indonesia “agree that sustainability criteria and standards applied to vegetable oils that have been independently established by each party should be accepted” in a move that would in effect oblige the EU to accept ISPO certified palm oil.

However, in reality the ISPO reform process to date has not resulted in a strengthened standard and will fall well short of ‘no deforestation’ standards being adopted voluntarily by palm oil companies worldwide.

Oil palm plantation on deforested land in Papua, Indonesia (c) EIAimage

Oil palm plantation on deforested land in Papua, Indonesia

The EU is itself considering a much more ambitious action plan on deforestation, including regulatory measures requiring ‘no deforestation’ for a range of commodities, including palm oil. Such EU regulation is clearly needed if a mandatory certification scheme achieves such limited uptake and progress. EIA has written to CEPA’s negotiators, alerting them to the concerns of Indonesian civil society as to the fundamental limits of ISPO reform.

Meanwhile, Indonesia’s President did sign a new moratorium which will temporarily halt new palm oil plantation permits for the next three years. This new presidential instruction will also review the permits of existing palm oil plantations, including those which have not obtained the necessary or correct permits plus those permits which should not have been given as they are within the forest estate.

Although the moratorium was expected to be for five years not three and again does not mention law enforcement, it is largely viewed as a positive step.

The moratorium on new palm oil permits will hopefully provide some respite to the deforestation caused by palm oil plantations but it still remains to be seen whether the ISPO will undergo sufficiently radical reform to enable all the millions of hectares of existing palm oil concessions to become more sustainable.

Until such a time, concerns remain over the ISPO standard and its lacklustre reformation.