ISPO, Smallholders, and Sustainable Development

Rudy Prasetya & Dedi Junaedi
July 17, 2021 | 10:34 pm
SHARE
A farmer harvests palm oil fruits in Sukasirna village, Sukabumi, West Java. (Antara Photo/Raisan Al Farisi)
A farmer harvests palm oil fruits in Sukasirna village, Sukabumi, West Java. (Antara Photo/Raisan Al Farisi)

Oil palm smallholders are on the path towards sustainability with Indonesian Sustainable Palm Oil (ISPO) certification. And palm oil critics should take note of this.

The Indonesian palm oil community is well aware of how these smallholders serve as a backbone to the country’s palm oil output. Smallholders produce more than 40 percent of the palm oil output and control more than 41 percent of the total plantation area. Unfortunately, they are getting the cold shoulder from Indonesia's palm oil export partners in the face of anti-palm oil campaigns.

The government and industry continuously remind other countries of palm oil's significance to sustainable development and the sector more broadly. Whilst governments and NGOs —particularly in the European Union— "double down" their anti-palm oil campaign. This negative campaign has now extended to small farmers, claiming that palm oil leaves communities worse off economically.

This is, of course, false. Palm oil has proven itself to significantly spur economic and social development among small farmers. Million smallholders have escaped from poverty. 

Advertisement

For Indonesia, the challenge now is to bring these farmers onto its environmental path. And this environmental path has brought the country's deforestation rate to a record-low.

ISPO certification will catapult the smallholders towards sustainable development. The certification is mandatory for all plantations. The government has granted smallholders a five-year phase-in period to make the transition.

Some smallholders, however, are hesitant to pursue the ISPO certification, but this is understandable.

Compliance with regulations —whether it is record-keeping, stricter environmental practices, or better occupational safety and health— is a cost for farmers. These costs have hindered smallholders from becoming ISPO-certified under any number of voluntary certification schemes. 

That is the key difference between ISPO and the talk around certification schemes that have come before it: they have the government's full support that is able to provide technical and financial resources to make sustainability certification happen.

Smallholders are seeing some major sticking points on the technical side. Proving the legality of land ownership or use rights is easier said than done in Indonesia. But this is among the reasons why the five-year grace period plays such a critical role.

Last month, a coalition of four Indonesian small farmer groups —including SPKS and Apkasindo— have put forward a list of demands on preventing deforestation, extending the current moratorium, licensing evaluation, and improving productivity of palm oil regulation (2018 Presidential Instruction). So there is a clear understanding of the importance of Indonesia’s sustainability path among smallholders.

Their list of demands did not convey any opposition to the ISPO. 

They mainly urged for the acceleration of land titling certificates in hopes to get smallholders ISPO-certified. They also called for the lowering of economic barriers to enable smallholders to better participate in Indonesia’s palm oil value chain. 

This position is significant for two reasons.

Firstly, it illustrates how the strengthening and revision process for ISPO were successful and inclusive. The process is guarded with the 2019 Presidential Instruction on the 2019-2024 national plan on sustainable palm oil. Across multiple ministries, agencies, provinces, and regencies who went out of its way to ensure the views of all stakeholders were included. 

Secondly, it demonstrates how the Indonesian palm oil community is now on the same page and walking on the same path towards sustainability in the industry. 

This solidarity for the sector is something unique to Indonesia.

It is essentially a renewal of the partnerships that were originally created and envisioned under the nucleus-plasma estate model.

This solidarity also presents a unique opportunity for the Indonesian palm oil community. 

Indonesia’s critics have long tried to pit us against each another — smallholders versus companies, communities versus governments. It is true that the palm oil community does not always see eye-to-eye, but this is the inherent tension between those buying and selling, or those making rules and those following them.

Working towards sustainability —through ISPO— is the community’s common goal. Governments and NGOs from outside of Indonesia need to recognize and understand this. But what is even more important is that they contribute to and support this goal. Not undermine it. Doing so will only undermine Indonesia’s sustainable development, which is now yielding significant results.

--

Rudy Prasetya is a PR staff at Indonesian Palm Oil Association (Gapki).

Dedi Junaedi is the Director for Plantation Produce Processing and Marketing at the Ministry of Agriculture/Head of Managing Team National Action Plan Sustainable Palm Oil.

The views expressed in this article are those of the authors.

Tags: Keywords:
SHARE

Related Articles


Business Jun 8, 2025 | 7:06 am

Indonesia Denies EU’s Palm Oil Law Is Reason Why Trade Pact Takes Years

Finding a common ground with 27 European countries in the trade talks is not as simple, minister Airlangga says.
Business Jun 3, 2025 | 8:01 am

Indonesian Palm Oil Export Value Jumps 20 Pct, But Volume Drops

Indonesia exported crude palm oil (CPO) and its derivatives worth a total of $7.05 billion in January-April 2025.
Business Apr 16, 2025 | 11:27 pm

EU Admits to Rushing Palm Oil Deforestation Law, Simplification Underway 

Aside from a postponement, work is underway to simplify EU's anti-deforestation regulation which will affect Indonesia's palm oil exports.
Business Mar 17, 2025 | 3:04 pm

Indonesia's Palm Oil Export Soars 58 Pct to $2.27 Billion

Indonesia's palm oil exports also jumped 89.54 percent year-on-year in February, according to BPS.
News Feb 12, 2025 | 12:18 pm

WWF-Indonesia: Conservation and Palm Oil Can Coexist

WWF-Indonesia pushes for sustainable palm oil with traceability, conservation, and certification efforts at ICOPE 2025 in Bali.
News Jan 24, 2025 | 2:01 pm

EU to Comply with WTO Ruling on Indonesia’s Palm Oil Biofuel Lawsuit

The EU says it will comply with a recent international trade court ruling on its palm oil biofuel policy.
Special Updates Jan 17, 2025 | 6:20 pm

Indonesia Welcomes WTO’s Ruling on Palm Oil Biofuel Lawsuit Against EU

The panel also ruled that the tax incentives for biofuel used in France’s transportation system is discriminatory to palm oil-based biofuel.
Business Jan 10, 2025 | 9:53 pm

Indonesia to Pursue Fairer International Trade

Indonesia is seeking a fairer international trade to boost growth to 8 percent.
Business Jan 6, 2025 | 4:34 pm

Indonesia-EU Trade Pact Deadline Pushed to First Half of 2025

Indonesia and the EU have been negotiating the CEPA trade pact since 2016.
Business Dec 19, 2024 | 9:08 am

Indonesia Eyes Investment in Suez Canal Economic Zone, Prabowo Tells Sisi

The Suez Canal Economic Zone can potentially bring Indonesian businesses closer to major international shipping routes.

The Latest


Lifestyle 2 hours ago

NBA Finals 2025: Thunder Rally Past Pacers Behind Gilgeous-Alexander’s Fourth-Quarter Surge

Shai Gilgeous-Alexander scores 15 in the fourth to lift Thunder past Pacers 111-104, tying the NBA Finals at 2-2 heading to Game 5.
News 2 hours ago

Iran Hits Israel With Missile Salvo Following Assault on Nuclear Sites

Iran fired dozens of missiles at Israel in retaliation for Israeli airstrikes on its nuclear and military sites, wounding dozens.
Tech 15 hours ago

Indonesia Introduces AI and Coding to 59,000 Schools Nationwide

Indonesia rolls out AI and coding as elective subjects in 59,000 schools, aiming to prepare students for the digital future.
News 17 hours ago

"I Realized I Was Alive": Survivor Speaks After Air India Dreamliner Crash

A lone survivor recounts escaping the Air India crash that killed 241 people. Investigators recover the black box as probe intensifies.
Lifestyle 17 hours ago

Dental Issues Top List in Indonesia’s Mass Health Screenings, Minister Says

Indonesia’s free health check program finds dental issues most common, ahead of hypertension, diabetes, and obesity, health minister says.
COPYRIGHT © 2025 JAKARTA GLOBE. ALL RIGHTS RESERVED