In stark contrast to Indonesia's commitment to reduce rampant deforestation, the government has surprisingly become a vocal opponent of a 'zero deforestation' pledge signed by the four biggest palm oil companies in Indonesia.
The Office of the Coordinating Economic Minister said on Friday that the pledge would jeopardize the country's palm oil industry, currently the biggest in the world, as it puts restrictions on small farmers.
'Oil palm plantations are the livelihoods of many of our people. The most effective driver of economic growth is through oil palm plantations,' the office's deputy for food and agriculture coordination Musdhalifah Machmud said on Friday.
As the world's largest producer and exporter of palm oil, Indonesia relies on demand for the commodity, which generates almost US$20 billion a year for the country and employs millions, drive growth and development.
The landmark Indonesia Palm Oil Pledge (IPOP) is an agreement among leading palm oil producers that commits them to industry-leading sustainability practices, such as applying a principle of not planting on high carbon stock or peat lands.
The pledge was signed in September 2014 by the CEOs of Asian Agri, Cargill, Golden Agri Resources and Wilmar. In early 2015, Musim Mas signed the pledge, turning the big four into the big five.
The pledge is significant as the leading producers account for 80 percent of the country's palm oil production, a major driver of deforestation in the country.
According to the 2015 Living Forests Report by the WWF, between 2010 and 2030 around 35 million hectares of forests in Kalimantan, Sumatra and Papua will gradually disappear mainly because of rapid agricultural development.
Kalimantan is predicted to see the biggest forest losses, amounting to 22 million hectares, because of the past decade's significant expansion of large-scale oil palm plantations, which currently cover 11.7 million hectares of Kalimanatan according to the report.
The report further shows that 5 million hectares of forests in Sumatra will be destroyed because of the expected expansion of oil palm plantations by small-scale producers.
Despite the contribution from small-scale producers contributing to the deforestation, Musdhalifah argued that the government would continue to protect them, saying that the pledge had already driven small farmers out of business as the principles also applied to third-party suppliers.
'The impact of the pledge is already apparent in the field. In Aceh, for example, there's an oil palm plantation that works together with Wilmar, but due to the pledge their palm oil could not be sold to Wilmar,' she said.
The Environment and Forestry Ministry's director general of planning, San Afri Awang, said companies had suffered as a consequence of following the pledge.
He said that companies had already been banned from selling their products due to unsustainable practices, some of which are in West Papua.
'It's problematic for them because they made the pledge themselves, but it backfired on them. The four companies as well as their suppliers are concerned because those suppliers usually sell their products to the big five,' he said on Friday.
Officials also claimed that the pledge was made in order to pressure the Indonesian government to amend its regulation on palm oil as the pledge includes proactive government engagement on policy
Awang added that the big five's decision to ban the clearing of four types of land: primary forest, peatland, secondary forest and bush, regarded as land with high carbon content, had overstepped the authority of the government.
He said that the government had different criteria on the matter and thus only bans land clearing in primary forest and peatland.
'For me the pledge already breaches the State Constitution. We lose our sovereignty because we are controlled [by the pledge]. Our authority is being taken over by the private sector,' Awang said.
Contacted separately, IPOP management team director executive Nurdiana Darus said that major palm oil producers supported the government's policy on sustainability.
'IPOP aspires to support Indonesian palm oil and increase its competitiveness both globally and domestically. It is important that our palm oil is seen as a strategic commodity, and also a sustainable one,' she told The Jakarta Post on Friday.
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