Destigmatizing the bad image of the palm-oil industry
The national haze calamity is about to end with increased showers and commencement of the rainy season in the hot-spot areas. The magnitude of the catastrophic haze left a number of long-term impacts on public health, community livelihood, socio-economic and environmental dimensions, particularly in Kalimantan and Sumatra.
While experts estimate billions of US dollars in losses on account of the haze, it is the people of Kalimantan and Sumatra who suffered the most with unaccounted health problems and disruptions to their livelihoods. All parties are inevitably affected by the land fires and haze, including palm-oil companies, experiencing the brunt and suffering from both financial losses and reputation damage.
According to the Global Forest Watch, there were 30,742 hot spots in the June to October period, mainly contributed by slash-and-burn practices outside concessions with a total of 18,272 hot spots, of which 7,890 were from pulpwood plantations, 3,189 from oil-palm concessions and 1,391 logging concessions. The data said that slash-and-burn practices and traditional farming were the main causes of the land fires.
Hot spots in oil-palm concessions account for 10 percent of the total this year, far below the 20 percent in 2013. But palm-oil companies remain persistently stigmatized as the culprit of environmental and social denigration. The palm-oil industry has again been blamed for the recent transboundary haze affecting Singapore and Malaysia.
The stigma of palm oil as an environmental villain is deep-rooted, with the industry being the most scrutinized in terms of environmental and social impacts. Currently, total oil-palm plantations in Indonesia stand at 10.5 million hectares, of which 44 percent are owned by smallholders. However, the total acreage is still less than 8 percent of the total land mass of the country.
Why does this stigma persist despite efforts to clear up such misunderstanding? There are few factors to take into account. The first and foremost is a higher degree of transparency within the industry and government commitment in meeting the global market and public expectations. Transparency in the palm-oil industry is a prerequisite of credibility.
With a high level of no confidence, the public will turn away from the government and industry. Instead they will listen to and believe other sources, such as NGOs and international media, which are seen as more trustworthy, to pressure the company to become more transparent. With capability to convey clear environmental and social agendas, such as anti-deforestation or low-carbon development, social equality and injustice, such persistent emotive messages have been effective in creating and maintaining the stigma associated with palm oil.
The distrust in the industry has been adversely affected by the poor governance of natural resources, policy inconsistency, legal uncertainty and lack of law enforcement.
The stigma attached to palm oil is detrimental to the industry as it will directly affect the market and eventually impact the government, which will be seen as ineffective in upholding the law and insensitive to global issues.
Destigmatization can only be done through a two-pronged approach, which is building transparency as prerequisites of green credentials with total commitment to sustainability standards, and ability to enforce laws and regulations.
The government must urge all concessions holders to share concession maps and development plans with the public. The map will enable early detection by satellite monitoring and speed up actions to put off fires or mitigation of potential environmental impacts. It will also hold concession holders accountable in case land fires occur.
On the government side, it is urgent to have a comprehensive map incorporating the existing land use, future development plan and concessions holders. Such a map will allow the identification of fire-prone areas and other environmental threats, as well as social-conflict susceptible areas. Consequently, it will enable the government and stakeholders to develop an emergency mitigation plan and strategy.
Second, the government must take lead in advocating sustainability and embracing globally accepted sustainability standards as a denominator for oil-palm development to compliment self-defined standards. The government needs to reconsider the use of globally accepted standards in sustainability and embrace market-driven multistakeholder forums such as the Roundtable on Sustainable Palm Oil (RSPO) and its most accepted platform as a vehicle to enforce sustainability standards.
The impacts of fires and transboundary haze will also further enhance market awareness on the urgency of environmental stewardship and increase pressure on palm-oil companies to abide by sustainability standards and subscribe to RSPO principles and criteria.
Simultaneously, the government needs to introduce robust environmentally friendly policies, including the revocation of all central and local regulations and policies that allow slash-and-burn practices for land clearing and land development, and issuance of a policy on land clearing and development.
No new development on peat and high-carbon stocks must be introduced for oil palm and other industrial plantations. Such valuable natural assets must be prevented from land-use change or conversion to non-conservation purposes. As for the already established plantations on peatland, strict best management practices on water management is to be implemented
The newly formed Indonesia Estate Crop Fund, which manages the CPO Supporting Fund (CSF), can play the pivotal role of a sustainability champion to align the efforts of the government with multinational agencies and multistakeholder organizations to rebuild the image and understanding of Indonesian palm oil.