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‘Certified’ palm oil linked to worse social, ecological outcomes for Indonesian villagers

A dirt road cuts through an oil palm estate in Seruyan, 2017.

  • The development of oil palm plantations across Indonesia, including those certified as sustainable, has had mixed outcomes for the social and ecological well-being of nearby communities, a new study shows.
  • In Sumatra, where oil palm has been cultivated for longer than on other islands and where rural residents have largely switched to a market-based economy, there’s a marginal net positive impact from the presence of plantations.
  • In Indonesian Borneo, however, where villagers tend to rely on subsistence-based livelihoods, socioecological conditions have worsened in the wake of plantation certification.
  • The study authors say their findings flag the risk of “unintended indirect impacts of pushing large-scale industrial oil palm into frontier forest areas where local communities still rely heavily on environmental services.”

While many look to sustainability certifications as a panacea for the issues surrounding oil palm plantations, a new study cautions that these programs may not be enough to prevent negative impacts on local communities.

Following on previous research into the effects of oil palm development on the livelihoods and environmental well-being of nearby villages in Kalimantan, the Indonesian part of Borneo, an international team of researchers has assessed the socioeconomic impacts of oil palm development on 36,311 villages across Indonesia between 2000 and 2018. The researchers found that the impacts of sustainability certifications varied widely — with both positive and negative impacts — depending on where a particular plantation is located.

The researchers used data from the national statistics agency’s Potensi Desa (PODES) survey that’s carried out roughly every three years. The survey assesses each village area on several parameters, including number of households with access to electricity and cooking fuels, distance to health care and school facilities, and access to financial development opportunities. Other social parameters include number of conflicts among communities and suicide rates, while environmental criteria include water and air pollution.

In their previous research, the authors found that, on average, villages with new oil palm plantations showed slower growth in most well-being factors over all time scales than villages without. In the wake of oil palm plantation development, villages that had already transitioned to a market economy — which typically correlates with higher level of previous forest degradation — saw an increase in basic and financial well-being, but also suffered more rapid detriment to environmental and social factors. Meanwhile, subsistence-based communities suffered overall decreases in all well-being categories in the wake of new oil palm development.

In this new analysis, the authors worked with a broader set of data covering the Indonesian regions of Sumatra, Kalimantan and Papua. In addition, they were able to distinguish which oil palm plantations had achieved certification from the Roundtable on Sustainable Palm Oil (RSPO), the world’s largest association for ethical palm oil production, and look at whether that change additionally impacted the socioeconomic and socioecological well-being of neighboring communities.

Ostensibly, RSPO certification ensures the consumer that palm oil is “produced without causing harm to the environment or society.” To achieve certification, a company has to go through a rigorous assessment process and prove it has adhered to certain standards. Among these are transparent records that the land is acquired legally and developed with the “free, prior and informed consent” of the local people, and that impacts to nearby communities are considered.

The current draft Indonesian National Interpretation of the RSPO Principles and Criteria state that, as part of the certification process, “oil palm plantations and mills should try to identify the indirect/secondary impacts within the Social and Environmental Impact Assessment framework, and if possible, work together with partners to obtain information about mechanisms for reducing indirect negative impacts and increasing positive impacts” (emphasis added). However, there are no requirements to do so.

For the 500 villages adjacent to RSPO-certified plantations, the study authors found a range of impacts. In Sumatra, where oil palm cultivation has been around longer than on the other islands, and where many villages have already transitioned to a market-based economy, RSPO certification had an overall, if marginal, positive influence on village well-being. However, in Kalimantan, socioecological conditions continued to worsen in the wake of RSPO certification.

The RSPO did not respond to multiple requests for comment for this story.

Read: “Most communities not seeing promised oil palm payoff in Borneo, study finds

Palm oil fresh fruit bunches in Indonesia. Image by Rhett A. Butler/Mongabay.

While the negative impacts of oil palm on villages in Kalimantan, a larger share of which previously relied on subsistence-based livelihoods, have previously been noted, what was somewhat surprising is that RSPO-certified plantations tended to have greater negative impacts on nearby villages than non-certified ones.

The authors suspect this is likely due to the fact that the expense and technical capacities required for a company to achieve RSPO certification means it is typically the bigger entities participating in the process, which tend to develop larger plantations affecting a broader swath of neighboring communities.

“Certified companies tend to have a much larger influence over village land use, environment and economy compared with those managing non-certified plantations,” the authors write. “This could create more unbalanced social power structures in certified plantations in which traditional communities and their local governance have a relatively limited say over what happens on their land.”

While these findings are cause for concern, some critics have argued that despite the negative impacts on subsistence-based communities, the long-term benefits of a stable oil palm-based market economy will eventually outweigh the short-term “growing pains.”

Mark Struebig, one of the study’s authors, says that while living standards have been improving across Indonesia, on balance these improvements were slower in oil palm villages still reliant on subsistence-based livelihoods.

“While we can understand the argument that communities will get there in the end, and be better off in the long run,” Struebig wrote in an email, “they’re going through several years (and in some cases decades) where they are not doing as well as others. The potential localised benefits of oil palm are really quite unequal and uneven, which is something that needs to be addressed before a generation of people in some areas feel left behind.”

In other words, RSPO certification alone may not be enough to offset the overall impact of palm oil on communities that previously relied on intact forests and subsistence-based livelihoods.

“Our finding that oil palm development has failed to improve well-being in rural subsistence villages,” the authors conclude, “calls for careful consideration by key decision makers of unintended indirect impacts of pushing large-scale industrial oil palm into frontier forest areas where local communities still rely heavily on environmental services.”

However, they do note that recent commitments to zero deforestation and no development on peat by the RSPO, combined with Indonesia’s moratorium on conversion of primary forests should shift future development onto already degraded and mixed-agricultural lands near primarily market-based communities that can better handle the transition.


Santika, T., Wilson, K. A., Law, E. A., St John, F. A., Carlson, K. M., Gibbs, H., … Struebig, M. J. (2020). Impact of palm oil sustainability certification on village well-being and poverty in Indonesia. Nature Sustainability. doi:10.1038/s41893-020-00630-1

Santika, T., Wilson, K. A., Budiharta, S., Law, E. A., Poh, T. M., Ancrenaz, M., … Meijaard, E. (2019). Does oil palm agriculture help alleviate poverty? A multidimensional counterfactual assessment of oil palm development in Indonesia. World Development, 120, 105-117. doi:10.1016/j.worlddev.2019.04.012

Banner: A road cuts through a corporate oil palm estate in Indonesia’s Central Kalimantan province. Image by Leo Plunkett for Mongabay and The Gecko Project. 

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