In line with the New York Declaration on Forests 2020 target, 447 globally operating companies have made a total of 760 commitments to reducing deforestation impacts in their commodity supply chains (as of March 2017). In the past three years, such commitments, known as “No Deforestation, No Peat, No Exploitation” (NDPE) policies, have been adopted in Southeast Asia. Chain Reaction Research estimated that as of 2017, three-quarters of SE Asia’s palm oil trading-refinery companies have adopted NDPE procurement policies. A trickle-down effect to the main growers has also taken place in Malaysia and Indonesia, albeit modestly, where the larger domestic integrated company groups have adopted NDPE.
Unfortunately, the transformation of the domestic industry in Indonesia still lags behind international developments. In fact, the domestic palm oil market may well develop into a second-tier market, with far less stringent sustainability requirements. This would represent a leakage market for any palm oil grower, refiner and retailer wanting to avoid compliance with internationally accepted performance standards. Such a market would likely come at the expense of remaining natural forests and peatlands and/or communities who have not granted their consent to plantation development. Should such a market continue to exist, then international efforts to transform the industry towards better practice could easily be undone.
The project and its engagement model follow a default approach that involves research (identify key decision-makers), engagement (dialogue) and advocacy (creation of leverage). The engagement process intends to make key decision-makers aware of the need to be more transparent, be more accountable and deliver more sustainability, and see them embrace those values. Failing direct dialogue and negotiation, it may be necessary to mobilize indirect decision-makers, including the media, to positively influence the key decision-makers.