IPOP disbands: A step backwards for sustainable palm oil in Indonesia?

By Niamh Michail

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags Palm oil Indonesia

After less than two years in existence, the Indonesian Palm Oil Pledge has disbanded to the dismay of environmentalists who say its member companies were bullied by the Indonesian government into adopting weaker standards.

The Pledge was signed into existence at the United Nations Climate Summit in 2014 by the Indonesian Chamber of Commerce (KADIN) and the four leading palm oil companies Wilmar, Golden Agri Resources, Cargill, and Asian Agri. They were later joined by Musim Mas and Astra Agro Lestari and all committed to making the commodity more sustainable by fighting against deforestation.

Groundbreaking government policies...

© Global Forest Watch

Its members say the dissolution comes in the wake of action taken by the Indonesian government to address forest fires and haze​ which engulfed the country's peatlands, rainforest as well as both non-certified palm oil plantations and, to a lesser extent, RSPO-certified ones.

Such action included a moratorium on peat development and one on the expansion of palm oil licenses which was announced by President Joko Widodo in April this year, and the formation of the Peat Restoration Agency (BRG).

Member companies called these initiatives “groundbreaking policy developments​” that rendered IPOP redundant.

Director of corporate affairs at Cargill Colin Lee said: “With the affirmative action by Indonesia towards a more sustainable palm oil sector, Cargill supports the dissolution of IPOP.”

All have said they will continue to support the government’s policies and endeavour to transform Indonesia’s palm oil sector and increase traceability and sustainability.

palm oil plantation, photo credit - michael warren
© iStock

...Or bad-mouthing bullies?

Yet according to Greenpeace, the dissolution is the result of continued pressure from bullying government officials. IPOP had come under pressure from the government to back down on its no deforestation pledge​ and exempt small hold farmers.

Greenpeace Indonesia forest campaigner Annisa Rahmawati lamented its dissolution. “Without these [IPOP] standards, Indonesia risks losing business to other countries in the region. Yet instead of applauding and promoting this sensible private sector initiative, government officials have bullied and threatened IPOP members.”

“The Ministry of Agriculture needs to get its priorities right,” ​said Rahmawati. “Last year's forest fires crippled Indonesia's economy and poisoned people
 across the region. Instead of bad-mouthing IPOP and its members, government officials should urgently work towards delivering President Jokowi's plans to stop forest fires by halting the palm oil industry’s expansion into forests and peatlands.”

Greenpeace's concerns were echoed by the Rainforest Action Network. Its agribusiness campaign director, Gemma Tillack, said IPOP had been an "important mechanism"​ for Indonesian companies to differentiate themselves from competitors, and called its dissolution “a disappointing step backwards​” in Indonesia’s fight for sustainable palm oil.

palm oil crop oil sustainable
© iStock

“IPOP’s former members [...] must now meet their responsible palm oil promises independently and demonstrate that they intend to follow through on the commitments made to smallholders, local communities, workers and customers across the globe that are demanding fundamental changes in the way the palm oil is produced.”

Weaker standards

While the Ministry of Agriculture-led policy, carried out under the Indonesian Sustainable Palm Oil (ISPO), has an important role to play, Tillack said it would not deliver the extension services, market access or land security for smallholders that IPOP promised.

She said it was now crucial that ISPO is strengthened and that the government works with both civil society and the private sector in order  

According to a report published by Oxfam​ this week, the commodities rice, soy, corn, wheat and palm oil have a huge collective carbon footprint – if they were a country they would be the third biggest contributor to greenhouse gases after only the USA and China.

Palm oil plantations cover more than 11 million hectares in Indonesia alone, an area bigger than Iceland.

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