Sustainable Palm Oil Governance

Abstract

In response to the unsustainable practice of palm oil plantation, several NGOs, palm oil companies and investors established the Roundtable Sustainable Palm Oil (RSPO) in 2004. This organization introduced a voluntary Certified Sustainable Palm Oil (CSPO) brand through a series of auditing processes of sustainable principle and criteria application in palm oil industry. Based on that backdrop, this study aims to examine how RSPO as private governance emerged, particularly in the Indonesian context. It also provides the explanation about RSPO characteristics as well as the advantages and its limitations. In addition. this study addresses how the Indonesian government relates to RSPO. The methodology of this study is qualitative which is based on secondary sources of data. It uses information such as from public and private reports as well as other sources of information including report from civil society organizations that involve in environmental and social issues within the palm oil sector. The findings of this research suggest that there are three explanations with regard to the RSPO emergence. First, it has been driven by government’s low performance in handling issues concerning social and environmental impacts of palm oil industry in Indonesia. Second, the controversy about palm oil commodity advantage and disadvantage at international level has also stimulated RSPO establishment. Finally, the RSPO is enhanced by the cooperation between transnational corporations and NGO certification initiative. In terms of its advantages, RSPO brings a positive image for palm oil companies. However, RSPO also has several limitations. First, the RSPO has lack of accountability. Second, the RSPO is a costly mechanism. Third, RSPO has lack of legitimacy from the national stakeholder such as the Indonesian government and palm oil companies association