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Sustainable Palm Oil – GAPKI


Moving Forward Sustainable Palm Oil 


Indonesian Palm Oil Association 

Palm oil is one of the most important vegetable oils in the world and plays major role not only in food security, but also as the most important source of bio-energy (bio-fuel) source. 

Oil palms accounted for only six percent of global land use for cultivation but produced 33 per cent of global oils and fats output in 2014-15 (New York Times, 8 May 2017). 

This makes palm oil the cheapest, most efficient, and most demanded vegetable oil in the world. As the world’s biggest exporter of palm oil, Indonesia plans to increase its production to 42 million tonnes by 2020 to maintain its global lead, through the improvement in productivity of oil palm plantations.  

Palm Oil and Poverty Alleviation 

The development of palm oil industry offers a glimmer of hope for the Indonesian people to improve their livelihoods, health and education. This is true, since it provides more than five million jobs, with strong multiplier effects in terms of rural development and poverty alleviation. The important role of palm oil production in supporting the livelihoods of local people can be confirmed by about 7.9 million householders recorded to work in the palm oil industry (Ministry of Agriculture 2015).  The future of their children also strongly depends on palm oil.  The average income of an oil palm farmer (10,58 million rupiah/capita/year) is found to be much higher compared to that of a city worker (4,37 million rupiah/capita/year) or a rural worker (4,12 million rupiah/capita/year), source: PASPI 2014.  

No Deforestation and Conservation of Peatland  

Deforestation as well as peatland and land fires are the main concerns of oil palm growers. Actions to stop

Turnera Subulata provides a host environment for predator insects in oil palm plantations

planting on high carbon stock area and peatland regardless of the depth have been taken by many and steps to build up sustainable palm oil scheme have become a trend among companies.  In 2015, land fires were the most important issue, significantly affecting the palm oil business, since many publications reported palm oil as the main actor behind the disaster. Even though the facts showed that oil palm concessions contributed less than 15 per cent of the land fires in Indonesia and more than 50 per cent of land fires were recorded to happen in mineral soil. In terms of land-use, about 69 per cent of the total land – 187 million hectares – are used as forest (for biodiversity conservation including national parks and protected forest areas) and the remainder is a non-forest area.  According to the law, an oil palm plantation can only be set up in a non-forest area. Today, oil palm plantations cover about 11.9 million hectares, 39 per cent of which are owned by smallholders (Directorate General of Estate Crops 2016), or about 5 per cent of the total land of Indonesia. With this in mind, it is very hard to link palm oil with the vast areas of forest lost (more than 40 million ha) in Indonesia.   The research conducted by Gunarso et al in 2012 showed that based on a land-sat image analysis conducted between 1990 and 2010, the establishment of oil palm plantations in Indonesia did not mainly come from the conversion of primary forest, as only 3 per cent of natural forests were transformed into oil palm plantations. This fact clearly showed that the development of oil palm plantation is not the main driver of deforestation as reported in many publications.   

Sustainable Palm Oil Initiatives: Moving Forward 

Indonesia has a strong commitment to implementing a sustainable production of palm oil through various government regulations, particularly those related to deforestation and peatland including: 

(1) instruction by The President of the Republic of Indonesia regarding suspension of granting new licenses and improvement of natural primary forest and peatland governance:  No 10 Year 2011, No 6 Year 2013, No 8 Year 2015, and No 6 Year 2017;  

(2)  Government Decree No 57/2016 junto No 71/2014 regarding Protection and Management of Peat Ecosystem;  

(3) Establishment of Peat Restoration Agency through Presidential Decree No 1/2016;  

(4) Establishment of One Map Policy through Presidential Decree No 9 year 2016 regarding the implementation of One Map Policy with a map scale 1:50.000.  These regulations that companies have to abide by aim to prevent further deforestation and protect peatlands.  Companies could be prohibited from operating if they disregarded the prevailing regulations on environmental protection. 

Sustainable certification is another commitment of the Government to ensure that palm oil is produced in a sustainable way.  The certification is implemented according to Agriculture Minister Decree No 11/Permentan/OT.140/3/2015 junto No. 19/Permentan/OT.140/3/2011.  The ISPO scheme represents all systems in Indonesia as regulated in various government regulations. In other words, ISPO scheme is a compilation of all related government regulations. Every single company has to follow the scheme and the certificate is only given to a company who has fulfilled in 100 per cent the principles and criteria under ISPO scheme.  The ISPO scheme is a comprehensive system evaluating and reviewing overall aspects of palm oil production process, including  legal aspects of concession, best management system (labor, cultivation, etc.), corporate social responsibility and environment/ecosystem management. There are seven principles, 41 criteria, and 127 indicators required to be fulfilled by a company in order to get certified. The commitment to sustainability is evident in the increasing number of companies adopting the Indonesian Sustainable Palm Oil (ISPO) standards, from only 10 companies in 2013 to 226 companies last year and 304 companies as of August 2017.   

Further key steps shall focus on:  

(1) Intensification through enhancement of breeding research, improvement of agronomic practices and harvesting methods;  

(2) Establishing partnership between companies, smallholders, buyers, suppliers, government and other related stakeholders; 

(3) Engagement among palm oil related stakeholders (Companies, Smallholders, Government, Buyers, Suppliers etc)  

(4) Strengthening palm oil fund to support the implementation of sustainable palm oil.  

About Indonesian Palm Oil Association  

Indonesian Palm Oil Association or GAPKI (Gabungan Pengusaha Kelapa Sawit Indonesia), which was founded on 21 February 1981, is an organisation that aims to unite the Indonesian oil palm planters and palm oil producers. GAPKI membership consists of state-owned oil palm plantations, private oil palm plantations (national as well as foreign-owned) and smallholders.