Indonesia Factsheet

GREEN COMMODITIES PROGRAMME
PPROGRAMME
SUSTAINABLE PALM OIL INITIATIVE
Indonesia
Palm oil and its derivatives are part of thousands of

products across the globe today. One can find it in
biodiesel, soap, doughnuts as well as soap, to mention
only a few. Since 1990, palm oil consumption has
quintupled worldwide. The demand in Asia, where palm
oil is used in cooking oil, accounts for a $44 billion
industry. Indonesia is the world’s largest producer of palm
oil, with a forecasted annual growth in production of 10%.
Early 2013, exports from Indonesia hit a five-year high.
In 2012, the total plantation area for palm oil production in A farmworker in Berau, Indonesia, loading oil palm bunches
Indonesia was estimated to account for approximately Photograph by Kumal Jufri (Bloomberg Business Week –
Global Economics)
7.65 million hectares generating 22 million tons of palm
oil. Indonesia aims to double its current palm oil production to 40 million tons by 2020. Estimates vary
how much land this will require very widely, ranging from 5-20 million additional hectares. This expansion
threatens remaining tropical forest and peat land.
However, there are opportunities for production

increases through productivity gains and use of
degraded lands. The need to balance growth and
economic potential and maintaining healthy
ecosystems and communities is fundamental to
secure the future of both forests in Indonesia and
improved livelihoods through economic growth.
The government recently established a national
certification scheme called ISPO, which requires
producers to comply with existing regulations for
palm oil production, environmental management,
responsibility to workers and social communities.
UNDP supports the operationalization and
optimization of ISPO, as it covers all producers in
Indonesia to ensure compliance with the Indonesian legal system. RSPO (Roundtable for Sustainable
Palm Oil) is also important in that it provides best practice standards. Therefore collaboration between
these two schemes is crucial for the sustainable future of the Indonesian palm oil sector.
The objective: Promoting sustainable palm oil by reducing deforestation and facilitating
structural change in the palm oil sector
The Sustainable Palm Oil Initiative (SPO) is a major public private partnership that supports the
sustainable production of palm oil while minimizing adverse social and environmental impacts. The
project aims at promoting sustainable palm oil by reducing deforestation and providing support to a
structural change in the sector. The five year programme is active from 2013 until
2018.
Based on the baseline assessment and extensive stakeholder consultations carried out in 2011-2012, the
programme aims to contribute to sustainable palm oil production through a focus on the following
strategic areas:
 Ensure palm oil stakeholders in Indonesia are well coordinated through National Palm Oil Platform:
 facilitate coordination of palm oil stakeholders through
- Government involvement to drive institutionalization and sustainability
- Private sector engagement
- NGO, local communities, smallholder organizations
 provide access to government policy making (recommendations to ISPO and other underlying
regulations)
 Strengthen smallholders to improve sustainable livelihoods and agricultural practices
 Provide training to smallholders on productivity, environment, fairer prices, management and
ISPO certification
 Strengthen local government agricultural extension worker systems to ensure sustainability and
scaling up of successful solutions
 Work with smallholder cooperatives and larger plantations to reduce expansion into forests
 Reduce deforestation:
 Accelerate land swaps and use of degraded land for palm oil production through legal/policy
development, leading to reduced use of fertile forest lands.
 Mainstream High Conservation Value (HCV) and High Carbon Stock (HCS) into spatial planning
 Strengthen the case for legally protecting HCV/HCS lands within concessions
 Measure/Manage GreenHouse Gas emissions
 Improve land tenure and mediation mechanisms:
 Provide support to independent palm oil smallholders to obtain legal land status, which is key to
certification under RSPO (Roundtable for Sustainable Palm Oil) and ISPO
 Strengthen local conflict mediation systems – leading to more effective use of land in the area
 Operationalize the national certification scheme to foster a sustainable palm oil sector
 Support ISPO operationalization and optimizing of guidelines so ISPO can effectively address
socio-economic and environmental problems
 Support the development of a third party auditing system for ISPO to ensure international
credibility
Progress to date
 Buy-in and ownership of the Indonesian government for supporting sustainable palm oil
 Inter-ministerial coordination strengthened
 Policy reforms identified to address the root causes of deforestation from palm
 Development of National Palm Platform since 2011. Socialized by the Minister of Agriculture in
2012, to be operationalized in 2013
 Joint study comparing RSPO (Roundtable for Sustainable Palm Oil) and ISPO is already been
developed, focusing on HCV (High Conservation Value) and FPIC (Free, Prior and Informed
Consent).
Who are the main partners engaged in the Sustainable Palm Oil Initiative?
Government Ministry of Agriculture, Ministry of Forestry, Ministry of cooperation and SMEs, National
Land Agency, BPN, Ministry of Environment, Ministry of Trade
Private: IKEA, Johnson & Johnson, Mondeléz
Other Partners: key stakeholders in the SPO national platform include national and local Government,
ISPO, RSPO (Roundtable for Sustainable Palm Oil), GAPKI, the Global Compact,
smallholder and environment associations/initiatives, SAWIT WATCH/SPKS, IFC, WWF,
ZSL
Funding partners: Johnson & Johnson, IKEA, Mondeléz
For more information, please contact

Tomoyuki Uno, Programme Officer Environmental Unit, UNDP, Indonesia;
Tel.: +62 (21) 314 1308 ext. 203; Email: [email protected]

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GREEN COMMODITIES PROGRAMME

Palm oil and its derivatives are part of thousands of

However, there are opportunities for production

For more information, please contact

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