T

he government is pursuing a series of policies to promote the sustainable production of palm oil, as part of Indonesia’s commitment to reducing poverty and creating jobs in rural areas.

Musdalifah Machmud, deputy of food and agriculture for the Office of the Coordinating Economic Minister, told a forum at the United Nations Development Program (UNDP) in New York on Tuesday that these policies would cover the protection of peatlands, forest fire prevention and Indonesia Sustainable Palm Oil (ISPO) standards.

“We are now preparing a presidential decree to strengthen ISPO standards, confirm the postponement of new licenses for plantations, prevent forest fires and preserve Indonesia’s peatlands,” she told the forum, which was also attended by representatives of foreign NGOs.

The government, she added, would produce a one-map policy to ensure the protection of forests, and at the same time, provide certainty to plantations.

On top of that, the government will continue to boost palm oil production by replanting smallholder plantations, instead of expanding plantation areas. Smallholders account for 42 percent of all palm oil plantations.

Speaking at the same forum, Dono Boestami, chief of the Oil Palm Plantation Fund Management Agency (BPDP Kelapa Sawit), said his office would help fund replanting activities with the help of state banks.

The overall replanting target is 1.7 million hectares of plantations belonging to 1 million smallholders. Of the total, BPDP targets to replant 50,000 ha of smallholder plantations in 16 provinces by the end of this year.

Replanting is necessary because smallholder plantations produce only 2 to 3 tons of crude palm oil per ha per annum — half of the productivity of plantations belonging to corporations.

“Replanting will increase the productivity of smallholder plantations, and subsequently, reduce the need for land clearing,” Dono said, adding that the plan would save around 1 million ha of forests from land clearing and encroachment.

Replanting would also ensure that palm oil continued to play an important role in reducing poverty and boosting employment in rural areas, Musdalifah said.

The oil palm industry directly employs 4 million people, while 12 million additional people depend on its businesses, she added.

It is expected to add 1.3 million jobs by 2020.

Seventy-five percent of palm oil plantations are located in rural areas, which means they are crucial to poverty reduction.

A 2015 study by Ryan Edwards shows that out of 10 million people alleviated from poverty in the 1990-2000 period, 1.3 million benefitted from oil palm expansions.

While speaking at Tuesday’s forum, Musdalifah also asked the UNDP to support Indonesia’s efforts in pursing the sustainable production of palm oil, including by recognizing ISPO standards.

The ISPO system was launched in 2011 based on a decree on sustainable palm oil certification. The government required all producers to apply for the program by September 2015 and receive their certificates by March 2017.

As of last month, 304 out of 1,200 oil palm companies have received ISPO certificates. However, the Indonesian Palm Oil Producers Association (GAPKI) claimed the certification has yet to benefit participating companies because ISPO standards lack recognition in the international market.

Musdalifah noted that the government has done much to ensure the sustainability of palm oil production, but the international community seems to be applying “a double standard” in their treatment of the industry, particularly compared to the production of vegetable oils such as grapeseed, soy and sunflower.

“There is a double standard between palm oil and other commodities, which makes palm oil production challenging,” she said.