The Oil Palm Governance: Challenges of Sustainability Policy in Indonesia

Eka Intan Kumala Putri, Arya Hadi Dharmawan, Otto Hospes, Bayu Eka Yulian, Rizka Amalia, Dyah Ita Mardiyaningsih, Rilus A. Kinseng, Fredian Tonny, Eusebius Pantja Pramudya, Faris Rahmadian and Diah Y. Suradiredja
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Eka Intan Kumala Putri: Department of Resource and Environmental Economics, Bogor Agricultural University, Bogor 16680, Indonesia
Arya Hadi Dharmawan: Department of Communication and Community Development Sciences, Bogor Agricultural University, Bogor 16680, Indonesia
Otto Hospes: Public Administration and Policy, Wageningen University and Research, 6706 KN Wageningen, The Netherlands
Bayu Eka Yulian: Department of Communication and Community Development Sciences, Bogor Agricultural University, Bogor 16680, Indonesia
Rizka Amalia: Department of Communication and Community Development Sciences, Bogor Agricultural University, Bogor 16680, Indonesia
Dyah Ita Mardiyaningsih: Center for Agrarian Studies, Bogor Agricultural University, Bogor 16129, Indonesia
Rilus A. Kinseng: Department of Communication and Community Development Sciences, Bogor Agricultural University, Bogor 16680, Indonesia
Fredian Tonny: Department of Communication and Community Development Sciences, Bogor Agricultural University, Bogor 16680, Indonesia
Eusebius Pantja Pramudya: School of Business and Economics, Universitas Prasetiya Mulya, BSD City, Tangerang 15339, Indonesia
Faris Rahmadian: Center for Agrarian Studies, Bogor Agricultural University, Bogor 16129, Indonesia
Diah Y. Suradiredja: Kehati Foundation, Jakarta 12720, Indonesia

Sustainability, 2022, vol. 14, issue 3, 1-20

Abstract: Nowadays, Indonesian palm oil faces agrarian, environmental, and social issues and has been subject to sharp criticism from the international community for many years. To answer this problem, the Indonesian government implemented a strategy through certification which ensured the achievement of sustainability standards, especially on the upstream side of the palm oil supply chain. The implementation of Indonesian Sustainable Palm Oil (ISPO) was an ultimate instrument that applied in particular to smallholders oriented towards managing land legal issues, plantation business licenses, plant seeds, and environmental management and to farmer organizations at the local level. However, this process faced quite complex challenges in the form of structural barriers that are very constraining. This study revealed the occurrence of the phenomenon of hollow governance when regulations are absent or collide with each other. The study also revealed institutional power and multi-level governance that made the governance process ineffective or counterproductive. With a qualitative approach to research conducted in three important palm oil provinces of Indonesia, this article aims to look at the issues of oil palm governance a bit more comprehensively. The study conceptualized what was referred to as low-functioning governance to describe how weak the institutions, organizations, actors, and resources are that support ISPO implementation, especially at the regional and local levels. This paper suggests improving and strengthening the ISPO oil palm governance if Indonesian palm oil companies and smallholders want to gain better credibility on sustainability abroad.

Keywords: governance; ISPO; certification; sustainability policy; smallholders (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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