Failure of Indonesia’s palm oil commitment ‘not bad news’ [commentary]

This is the first in a series of commentaries about the disbandment of the Indonesia Palm Oil Pledge (IPOP). Read the second one here.

The Indonesian Palm Oil Pledge or IPOP was signed into life amidst much fanfare at the UN Climate Change Festival in New York in September 2014. Less than two years later, on July 1st, IPOP was disbanded. Vocal NGOs like Greenpeace and Rainforest Action Network have bemoaned this development as a disappointing step backwards in the fight against deforestation. Glenn Hurowitz and Bustar Maitar, two people I greatly respect, have jumped into the fray, expressing disappointment at IPOP’s demise and despair at the bad future this portends for Indonesia’s forests and people.

I have a very different view.

I believe that IPOP had become a distraction and its demise actually creates an opportunity for a more vigorous and fruitful race to save forests and help communities. Apart from drawing fire from hostile folk in the Indonesian government and palm oil industry and creating a bad vibe around no deforestation commitments, it’s not clear to me what IPOP actually achieved. It gave the UN some nice headlines and a sense of some achievement in an otherwise long and dismal history of failure to take any solid action on deforestation. But in the end, PR might create headlines for the UN and a sense of pride amongst those who still feel it has relevance but PR seldom translates to change on the ground.

NGO concerns about IPOP’s demise suggests a misunderstanding of the role IPOP was playing vis-à-vis the actions of its (former) individual member companies. Worse, the comments just come across as more NGO moaning and headline hunting that does little to encourage the future constructive dialogue that all parties agree is critical for progress. It’s neither fun nor fulfilling to speak to someone who always says “not good enough” or who suggests you lack courage.

There is merit in individual action and history in other geographies and sectors hints that initiatives like IPOP aren’t necessary to bring huge change. Recent initiatives by the Indonesian government stand in stark contrast to the depressingly familiar negative tone from the NGOs. There is movement here; there is real hope. How can we give it oxygen?

Let’s remember how IPOP started and what preceded it.

In May 2010, Nestlé launched the world’s first ever No Deforestation Responsible Sourcing Guidelines. It was a courageous action, spurred by a stunning Greenpeace campaign against Nestlé’s use of palm oil in its KitKat chocolate bars. It represented a revolutionary breakaway from the narrow confines of the Roundtable on Sustainable Palm Oil (RSPO) and set the stage for others to follow. In December 2010, the Consumer Goods Forum duly did and announced its own No Deforestation pledge though it was, and still remains, unclear how that related to or drove individual efforts by CGF members. Then, in February 2011, Golden Agri Resources, Indonesia’s largest palm oil grower, announced its Forest Conservation Policy, incorporating all of Nestlé’s No Deforestation provisions. That really was a revolution though no other growers followed because they were safely cocooned in RSPO’s warm embrace.

Movement did come when Asia Pulp and Paper announced its Forest Conservation Policy in Feb 2013. Although in the pulp and paper sector, APP is a huge company and when it moved so strongly to No Deforestation, it changed the entire dynamic in Indonesia and globally. Since Nestlé’s initial leap, other consumer brands had followed with individual commitments but not many. When APP went, No Deforestation became big news with such a large company joining the fray. It sent a message to forward thinking companies that it was possible to go down that route and set the stage for others to ponder a possible different future.

That different future arrived on December 5th 2013 when the world’s largest palm oil company, Wilmar International, went further than anyone had ever gone by announcing comprehensive No Deforestation, No Exploitation and No Peatland development (NDEP) policies that covered all its own operations, but significantly, all of its entire global supply base. No trader had ever done that before. GAR duly extended its policy to its downstream operations in Feb 2014 and the other major traders – Asian Agri, Cargill and Musim Mas – followed as did a swathe of other brands, now confident that if they made the commitment, they could secure supplies of No Deforestation oil.

Within the palm oil trade, this set off a race to the top. Sales teams visited customers in the US and across Europe and found themselves spending 90% of their meetings discussing their NDEP policies and what they were doing to implement them. Prices, quantities and delivery schedules were pushed aside as standard stuff that could be dealt with later. Hundreds of millions of dollars of business were won, lost and moved around based on the strength of each company’s policies and what they were doing to proactively implement them. Money talks and any trader not committed to NDEP policies found themselves rapidly excluded from important western markets. It was a powerful driver for change.

Alongside this, we had local NGOs doing great work to highlight policy breaches. Greenomics in Indonesia deserves special mention here. Whilst their initial tone suggested they didn’t trust the traders and their NDEP policies, with some justification, they were nonetheless providing valuable information from the ground about companies still clearing in defiance of the policies. International NGOs like Forest Heroes played a great role in spurring other brands and growers to go down the NDEP path. I can only speak for the companies TFT works with but we were seeing strong action to implement the policies. Where that was lacking, there were strong words and stronger actions that brought real alignment between company commitments and actions to halt deforestation on the ground. There was and continues to be real progress.

Amidst all this work on the ground, TFT member companies got active in speaking to NGOs (those prepared to engage) and with the Government of Indonesia but also other national, regional and local governments – across Indonesia, in Malaysia and in all the countries they work. There was real and genuine engagement to share thoughts and information and real efforts to bring change. Forests were still being lost and communities and workers were still being exploited within the industry but momentum was gathering.

And then along came the UN…

In September 2014, the UN held its big Climate Change jamboree in New York. A good initiative to get folk together and to raise awareness, like all such events, it needed a landmark achievement else the press the next day might record a flop. It needed PR. Those choreographing behind the scenes looked to the recent developments in palm oil, quite rightly, as something that could be promoted as a good story. All good PR is helpful and promoting it as a good story was a great idea, but they decided to go one step further. They decided they needed a signing ceremony, something grand, something for the spotlight. Thus the TFT member companies who had signed NDEP policies were invited to sign IPOP into life in partnership with the Indonesian Chamber of Commerce and the Indonesian Government, with the Indonesian President no less.

IPOP was thus hailed as a critical breakthrough, a singular achievement of the UN Gala, without which Indonesia’s forests would all be lost. The UN had achieved something! Hooray! On top of this we had the overall pledge signed into life by various governments, companies and NGOs to halve deforestation by 2020 and strive to end it altogether by 2030. IPOP was hailed as the first step in what many hoped would be a glorious path to forest salvation.

The UN had indeed brokered a deal but in my mind it was a deal that was unnecessary. Each company was already going for it big-time implementing their respective NDEP policies. Each company was speaking to the Indonesian government. My view at the time was, “Well, it probably won’t hurt, but I’m not sure it’ll do any good”. I had urged TFT member companies not to sign the overall UN pledge. Their own policies already went way beyond what they were committing to with the UN and only striving to end deforestation by 2030 didn’t strike me as being sufficiently ambitious to drive strong action. I feared it would delay things until 2028 at the earliest.

Not wanting to be a miserable spoilsport, I backed off. We decided that TFT wouldn’t sign the UN pledge and felt that if nothing else, our member companies, many of who had been targets of NGO campaigns for many years, would at least be able to publicly show themselves to be serious. No bad thing but true seriousness can only be measured by change on the ground, not by signing a PR statement.

So what’s happened since?

Individual IPOP member companies have forged on implementing their NDEP policies. There have been successes with companies turning off clearing machines and the resolution of some conflicts. There has been good engagement with many NGOs who, in some cases, have changed the tone of their discussions because a sense is emerging that the companies are serious. Not everyone is happy of course and there remain a number of important NGOs who remain critical of the company efforts suggesting the commitments don’t go far enough, that they aren’t being implemented fast enough, and ultimately accusing companies of not being serious. Some even suggest that the wave of NDEP commitments has had zero impact which I personally think is just them being negative.

There have been many IPOP meetings that initially focused on how the group would convene and discuss, what would it do, how would it do it, what barriers lay ahead. There, the focus came to anti-trust laws; they didn’t want to and legally could not act as a cartel.

Meanwhile, as noted by the NGOs, opposition grew. Some small and medium sized companies with palm oil concessions wanted to continue clearing. They felt it was their right and who were these companies to tell them what to do. Questions of sovereignty emerged in a nationalistic fervor.

The Indonesian government changed too, with the out-going SBY’s green credentials at least somewhat burnished by IPOP’s creation, but with questions around how the new government would view a commitment made by the last.

As IPOP members got increasingly active implementing their commitments, disgruntled palm oil company leaders who were feeling deprived of their right to make millions clearing forests for palm oil, took their complaints to the Indonesian government. Smallholders were invoked as the key victim of the NDEP policies and IPOP members were criticised for ignoring the needs of this critical group. That this was all just political point scoring became apparent when the President of the Smallholders Association in Indonesia came out in support of IPOP and NDEP commitments, noting that it was the IPOP member companies who were leading on engagement and support to smallholders.

But the companies were doing that anyway, they didn’t need IPOP to do it. Likewise, they were implementing their policies, and keeping IPOP informed about it. IPOP meanwhile was working on its identity, its role and it wasn’t easy. Staffed by excellent, capable people, the IPOP Secretariat was moving forward but in difficult political winds.

Then we had the terrible fires and haze in Indonesia in 2015. Despite all the pledges, despite IPOP, the forests burned and the people and wildlife choked. The fires and their ravages told us in bold terms what everyone already knew – we needed a political solution to the deforestation problem and that the role of individual company commitments was to pioneer new approaches that could inform government policymaking, giving the government confidence that there would be no economic fallout if they supported the NDEP path.

The Indonesian government has stepped strongly forward in 2016 to institute new laws, new moratoria, new policies. It’s taking strong action and whilst more needs to be done, it doesn’t need a full-court press from leading companies in the shape of IPOP to tell it what to do. That only annoys them and annoying such an important stakeholder is unhelpful. It does need dialogue – with companies, with NGOs, with communities and a variety of experts. The perception seems to be that that dialogue is best if it happens by groups, like IPOP presenting their credentials and ideas to the government. I don’t see it, I don’t agree. IPOP just added another unnecessary layer into the equation. It distracted the companies from their urgent work to clean up their supply chains. It became the channel for dialogue with the government, a group-speak that potentially stifled individual innovation and idea sharing. Yet, if you hailed IPOP as a wonderful success, the key to unlock the deforestation solution, then you’re obliged to stress about its demise, regardless of what actually happened on the ground. If you supported the UN process, the disbanding of the fruits of those efforts seems like a bad thing. But is it?

What does the future look like without IPOP?

TFT member companies are forging ahead implementing their NDEP commitments. They certainly don’t lack courage in this regard. They’re communicating with the Indonesian government and with local and international NGOs. They’re responding to policy breaches and they’re engaging with smallholders. There is much grappling with complex, wicked problems. Each company is going about their work in their own way, sparking innovative approaches and inspiring others to follow as they go to their customers – who now have their own NDEP commitments – striving to be the best, to show they have a better handle on deforestation, exploitation and peatland clearance in their supply chain than their competitors. They’re doing this free from the distraction of trying to work out how to collaborate pre-competitively. Political challenges remain. Not everyone in the Indonesian government is happy that individual companies are doing their own thing. There is talk that companies that implement NDEP policies will be penalized. This would be odd in the context of the steps the Indonesian government is taking to reign in deforestation across the palm oil industry but strange things do happen when people’s expectations are threatened.

There are no smooth waters ahead but IPOP’s singular achievement in its short life was to create stormy conditions. That, and its brief time in the spotlight shouting joy for the UN, is no reason to continue.

I urge concerned NGOs to think more about ways to bring life, positivity, oxygen and innovation to the approach companies and the Indonesian government are taking to implement NDEP policies. We can’t tick any boxes yet but multi-stakeholder dialogue can take many forms and if you don’t get the form you want, try not to throw your toys out of the pram. Hang in there, talk to stakeholders and keep going. Only time will tell if IPOP’s demise was the disaster NGOs suggest but already the players have moved on. It’s time to look at how we can inspire others to follow. Have courage.

Scott Poynton can be contacted via his blog, scottpoynton.com