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Driving Sustainability: Facts about ISPO

The revision of ISPO and its new implementing regulations have bolstered ISPO’s robustness and credibility significantly.

It is becoming apparent in the global palm oil community that not only is ISPO a serious ongoing concern with the backing of Indonesia’s President, but also that it is being implemented on a large scale across Indonesia, unprecedented in other countries and also outperforming expectations of many palm oil commentators.

Despite this, there are some fundamental misunderstandings about ISPO, and some miscommunication about ISPO that is taking place across the world, with several NGO reports attempting to discredit the standard.

Western stakeholders in the past have expressed concerns about peatlands or forest protection, GHG emissions and exploitation (labour rights and human rights) in Indonesia.

These have been referred to by some groups as NDPE (No deforestation, peat, exploitation) issues. Support for local communities has also emerged recently. So, how does ISPO manage these issues under its new revised standards?

Peatlands and Deforestation

The revised standard has a number of requirements in place for peatlands and forests. The first is that any activity complies with all relevant national and local laws – including the now-permanent moratorium on new planting in peatland and primary forest areas. Therefore, by definition, ISPO prohibits news planting in those areas.

The standard requires that any pre-existing plantations on peatland must be managed appropriately, and in addition that any new plantings meet all legal requirements for plantation establishment – including that all legal requirements for land permits are met. This includes ensuring no peatlands are included, and that any risks to peatlands are assessed accordingly.

The clearest provision is that ISPO requires documentation that businesses have not opened peatland areas – this also applies to forests.

Similarly, any previously forested areas (e.g. forested agricultural land or production forest areas released by the Ministry of Forestry) that have been used for plantation development are required to have all release permits from relevant national authorities.  In other words, historical deforestation must be accounted for.

Greenhouse Gas Emissions

Operators are required to document, calculate and account for all GHG emissions sources for their operations. They are further required to have procedures in place for GHG mitigation. 

Labour Rights and Human Rights

There are several aspects to labour rights contained within the ISPO standard. The first is a blanket prohibition on child labour and forced and slave labour in any operations. This includes the adoption and implementation of policies around these forms of labour as well as requirements for communication and training on the policies and prohibitions. This provision also prohibits the mandatory collection of employee documents (e.g. passports) by the employer.

There are further requirements against exploitation, which include that:

  • Workers must have written documentation of wages, permitted hours, breaks and leave in accordance with national laws;
  • There must be a record of worker rights being explained to workers;
  • Permanent work cannot be performed by casual or freelance workers;
  • A register of all workers (casual or otherwise) with records of wages paid according to national wage requirements;
  • Operators are required to facilitate union representation for workers, and document all facilitations, discussions and agreements;
  • Workers must also be made aware that they have access to union representation.  

There are many other provisions within the standard implementation, including providing health and other infrastructure for employees and their families, provision of safety equipment and training, among other things.

Community Rights

There has been some misunderstanding around community rights associated with plantation companies in Indonesia. Plantation companies have been required to provide 20 per cent of plantation area for community plantation development (‘plasma’ farmers).

It has been claimed that President Jokowi’s Omnibus Law removed this provision for smallholder farmers. This is not the case.

The requirements for plasma community development remains in place. The Omnibus Law makes some small changes, in better defining the parameters of how plasma development takes place. ISPO requires clear documentation indicating that the plasma (IUP-B) developments have been accounted for.

True Sustainability: Meeting and Surpassing UN Sustainable Development Goals

What binds together all of the above elements of ISPO, is their significance for Indonesia’s efforts – and the world’s efforts – to meet the United Nations’ Sustainable Development Goals (UN SDGs).

The updated ISPO standard includes specific elements to reduce GHG emissions (Goal 13), empower local communities (Goal 11), and provide economic support to small farmers (Goal 1).

The importance of this must be understood, especially by the Western-funded groups unjustly criticising ISPO. These are not politically-skewed targets, or amorphous aid agency criteria. These UN SDGs are the core objectives designed and agreed by the global community, targeted at perhaps humanity’s most-important moral quest: the ending of poverty and associated suffering in our time.

Indonesia, through ISPO, is taking a targeted approach to deliver on these goals, in the real world, and naturally the country’s most-successful agricultural commodity is at the heart of this effort.

The ISPO standard can and will be tweaked and updated further; that is only natural as with all certification schemes. It will evolve and improve, and constructive feedback helps that process. Look no further than RSPO. Undermining the principle of national standards though – as some NGOs are actively doing, in an effort to promote their own agenda or their own slice of the market – is foolhardy. This approach achieves nothing except to potentially weaken one of the most-important platforms that can deliver on the UN SDGs.

NGO Reviews

Although several critiques have been published by NGOs, they all refer to either the broad principles contained in the Presidential Decree on ISPO, or the original version of the standard. No NGO critiques published to date refer to the revised standard, meaning their analyses are badly out of date and irrelevant to today’s reality.

Instead, there has been an inclination to simply dismiss the standard without examining it. This may be in part due to the standard only being available in Indonesian or the complexities of Indonesian regulation. However, this is a poor excuse. Many groups – businesses, NGOs, governments — deal with the complexities of foreign regulation every day. Many of these groups are well-funded by U.S. and European governments and foundations with local offices and resources in Indonesia. The fact that ISPO may be difficult to understand is no reason to form and disseminate a factually-incorrect narrative about the standard. Ignorance – wilful or otherwise – is no excuse.

Indonesia Academic Review

The Jakarta-based Institute for Development Economics and Finance (INDEF), published an academic policy brief that has reviewed the latest update of ISPO, including recommendations for further development of the standard. This provides a good overview of the progress to date of ISPO, and sets out recommendations to the Indonesian government, and the palm oil community, for how ISPO could become recognised and accepted in importing countries.

Click here to download the INDEF policy brief.

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