This multistakeholder platform was launched by European food business and NGOs in 2004 and registered as a foundation under Swiss law. Indonesia applauded the multidimensional approach of the RSPO to sustainable palm oil, balancing environmental sustainability with social equity and economic growth.

To overcome the limitations of voluntary certification through the RSPO and to make sustainable production of palm oil a mandatory practice in Indonesia, the government introduced the Indonesian Sustainable Palm Oil System (ISPO) in 2011. The two standards together signal that the Indonesian government and global value chain actors from all over the world are committed to making sustainable palm oil mainstream.

However, this endeavor is now under siege.

We are now witnessing a time when not only the number of arenas in which the sustainability of palm is being discussed has increased enormously, but also the kind of players and the tone of the debate has dramatically changed.

Palm oil has increasingly become the subject of different public policy-making processes of western nations in the field of climate, biodiversity or energy. The sustainability of palm oil is predominantly treated from an environmentalist perspective and often disqualified in an absolute way as not sustainable.

Strikingly, in many of the political arenas, green parties qualify the RSPO as an instrument of greenwashing. But maybe worst of all, in each of these arenas, the Indonesian government – representing millions of palm oil growers and the interests of the palm oil industry – has no seat, no vote and hardly a voice. As a result, palm oil has ignited tensions between Indonesia and western nations.

The versatile vegetable oil is not only a solid asset of Indonesia as a global commodity but also a slippery substance in international relations.

In June 2017, for example, a majority in the Norwegian Parliament voted for a ban on the public procurement and use of biofuel based on palm oil. In June 2018, the European Parliament proposed banning the use of palm oil for biofuel from 2021 onward under amendments to the European Renewable Energy Directive (RED). In spite of protests from Malaysia and Indonesia, six months later the revised RED was launched, classifying palm oil as the only vegetable oil crop with a high risk of indirect land use change and greenhouse gas emissions.

Most recently, a referendum was held in Switzerland in which just a small majority voted in favor of a free trade agreement with Indonesia, including a tariff reduction to the import of a limited amount of palm oil meeting certain environmental standards.

Though concrete measures have not yet been announced, palm oil analysts expect a revival of international environmental policies under the Biden administration of the United States, possibly negatively affecting the Indonesian palm oil sector.  

Indonesia, the world’s biggest palm oil producer, has responded critically to many of these parliamentary decisions of western nations. However, the government cannot muscle its sovereign power to nullify the democratic decisions and public policies, even if one-sided campaigns of environmental NGOs have prompted these decisions and policies.

Using insights from international relations theory, we distinguish two political roadmaps that the government can use to curb the one-sided, unilateral, environmentalist public policies of western nations. 

The first political roadmap is based on a realist approach to international relations, which assumes that own, political and economic interests are the key drivers of every nation.

This roadmap consists of at least three steps. The first is to explore to what extent current environmental policies of western nations primarily serve own economic interests, are meant to win green voters, or a combination of the two.

The second step is to map the negative environmental effects of the EU Common Agricultural Policy (CAP) and to unpack the political and economic interests that sustain this massive subsidy program for farmers in Europe. This program has for decades protected the own farming population and supported the modernization of agriculture at the expense of nature. It is only in recent years that subsidies can be used for gradual shifts to environmentally friendly farming.

The third step is to make it very clear to trade representatives of the EU and EU countries that any new EU-ASEAN trade partnership agreement is at risk when the sustainability of palm oil is defined unilaterally by the EU and is not treated in a comprehensive way.

The second political roadmap is based on a constructivist approach to international relations, which assumes that nations can develop shared principles and norms. This roadmap consists of at least three steps.

The first step is to argue that the transformation to sustainable development is beyond a single country’s responsibilities and capabilities. Improving sustainability of the existing palm oil sector and finding alternative economies for preventing cutting more forests are also challenges for the international community.

The second is to use the Sustainable Development Goals (SDGs) framework to call the international community to develop partnerships (SDG 17) for increasing the contribution of the palm oil sector to different SDGs, not only on climate action (SDG 13) and life on land (SDG 15) but also on poverty (SDG 1), decent work and economic growth (SDG8) and responsible consumption and production (SDG 12).

The third is to initiate a public or intergovernmental version of the RSPO, in which palm oil exporting and importing countries gather to define principles and criteria for sustainable palm oil. Of course, there is already quite some knowledge about such principles and criteria, but this can ensure that the sustainability of palm oil is not one-dimensionally or unilaterally defined. This can also provide an opportunity to develop synergy between national public and global private standards.

Scapegoating palm oil as not contributing to sustainable development is easy when the key stakeholders from Indonesia are not invited to provide a more balanced picture. It is also not very constructive in a world in which working on the SDGs requires concerted action and above all new democratic spaces in which global value chains form the organizing principle.

Whichever political roadmap is used, the Indonesian government has a lot to gain when investing in palm oil sustainability governance based on wider and more equal international participation of producing and consuming countries, and in public diplomacy targeting the voters of western democracies.

 ***

Otto Hospes is an associate professor at Wageningen University, The Netherlands, and adjunct professor at Bogor Agricultural University (IPB). Pantja Pramudya is a senior researcher at the Institute of Social and Economic Research.