Palm oil is a vital ingredient for many products and the industry provides a significant source of national revenue and employment for millions of farmers.

Indonesia and Malaysia collectively account for 85 to 90 percent of global palm oil production. But palm oil is often associated with various controversies including the persistent fires and haze.

Responding to this pressure, several initiatives have emerged to steer the palm oil industry towards more socially- and environmentally-friendly practices, such as the Indonesia Palm Oil Pledge (IPOP made in New York in 2014.

Yet, the dissolution of IPOP in July, less than two years since it was launched, did not come as a surprise to industry observers.

Since its inception in 2014, IPOP had met with resistance from the Indonesian government and many local palm oil companies.

Dissenters had accused IPO...