Western-funded Groups Launch Apparent Coordinated Attack on ISPO

Over the past two weeks, ISPO has come under some criticism from two prominent NGOs: Human Rights Watch and the Carbon Disclosure Project. We go through both sets of criticisms, provide a rebuttal based on science and look at the underlying motivations of each.

Human Rights Watch: Another Misstep

The work of HRW is not as strong as before. After an erroneous and very questionable report on Feronia’s operations in DRC dated 2019, their new report on Indonesian palm oil is another misstep. The report is essentially an investigation of the conflict between indigenous rights and agricultural development in Indonesia – but the target is palm oil.

HRW reserves its major recommendations – and some of its biggest criticisms – for the ISPO scheme and the Ministry of Agriculture.

The HRW recommendations among other things call for: additional financial and technical resources for ISPO compliance; conflict resolution mechanisms; revision of ISPO to include traceability.

Why are these recommendations a problem? Because many of these recommendations have already been put into place.

As we’ve pointed out many times before, ISPO went under a significant revision process that commenced in 2016. An extensive consultation process took place across Indonesia with civil society groups, farmers, local government and companies.

This means a traceability procedure is now part of the standard. It also now includes a clear and revised dispute resolution mechanism that is open to independent monitors and affected communities. There is also now in place a National Action Plan on Sustainable Palm Oil, which is being implemented by FOKSBI (Forum Kelapa Sawit Berkelanjutan Indonesia) and includes support for implementation across Indonesia. In addition, the switching of accreditation processes for ISPO over to Komite Akreditasi Nasional (KAN) means that accreditation is now undertaken by an internationally recognised institution.

Many of the changes that have taken place are in the new implementing regulations for ISPO. It’s worth noting that these regulations aren’t referred to at all throughout the HRW report. Nor is the revision process, and nor is the FOKSBI action plan.

HRW does point out that much of the report is an ‘updated’ version of a report they produced in 2019. But if they haven’t actually updated the report with consideration of the revised ISPO standards, what’s different? Why bother re-releasing the report when the most important development is not reflected in the new text?

There is a clear answer to this question. The answer lies in the recommendations “To Donor Governments, the European Union, and Other International Bodies”:

Negotiate and ensure that robust and enforceable human rights and sustainable development provisions are included in all bilateral trade deals with Indonesia;

Introduce mandatory human rights and environmental due diligence legislation that applies to the global value chains of international companies, including their sourcing of raw materials such as palm oil;

Enact due diligence laws that prevent deforestation in the supply chains of forest risk commodities, such as palm oil.

In other words, this revision – and an incomplete one at that – is not about assessing or analysing the (updated) ISPO scheme. Really, the goal of this report is to lobby the EU on its potential trade deal with Indonesia; and also to demand tougher deforestation and human rights due diligence requirements that would be designed to ultimately exclude ISPO.

Why else would HRW state that companies should “recognize the serious limitations of ISPO certification for palm oil and its credibility,” when the HRW report does not even bother to examine the revised implementing regulations?

It’s not clear exactly why HRW chose this moment to start its lobbying push on Due Diligence: though a clue could be found in the Indonesian government’s growing friendship with the UK. The Foreign Secretary Dominic Raab has committed to finding a pathway for ISPO to be recognised under UK legislation, and has also committed that the UK’s Due Diligence measures will be based on a legality standard. This sensible and reasonable approach drew applause (and relief) in Jakarta and other palm oil producing capitals.

Perhaps some opponents of palm oil are concerned that the EU – the next big economy to debate Due Diligence laws – will follow London’s lead. Hence the push to pull EU policymakers into endorsing a more draconian Due Diligence approach, and to keep EU leaders away from any support for ISPO.

After the unfair report on Feronia, HRW has allowed its credibility to be questioned again: we see this as another misstep both in terms of technical proficiency and principles.  

The technical misstep is simple: the new ISPO standard isn’t accounted for, so that element in the report is fundamentally flawed and out of date. The misstep in principles is more nuanced: ISPO is the most inclusive sustainability standard for smallholders. Excluding ISPO effectively means excluding smallholders. Is that really what HRW wants?


CDP: Lobbying Indonesia?

CDP North America – operating under a million-dollar grant from the Packard Foundation – is similarly lobbying for changes in government policy in a new report. CDP’s criticisms are reserved for Indonesia’s biofuels program, and again, for ISPO.

So, what are CDP’s criticisms?

CDP is arguing against the implementation of a higher biodiesel mandate in Indonesia. Currently the mandate requires a 30 per cent blending of biodiesel; 40 per cent is currently being proposed. As CDP points out, this would shift energy consumption away from imported fossil fuels. It also assists Indonesia with its balance of payments with a lower reliance on imported fuels. This move away from imported fuel dependency was also the reason the EU pushed for biofuels programs over a decade and a half ago.

The report makes two curious claims. The first is that the Indonesian government has allocated 4 million ha of land to support increased biodiesel production, citing a Reuters news report. Only, this is not what the Reuters report says. The second odd claim is that CDP states that Indonesia’s biofuels programs will “likely require 9 – 15 million hectares of additional palm oil plantations”, citing an academic article. The cited academic article doesn’t state this either.

This all leads CDP into two criticisms of ISPO. The first is that there is no ‘cut off date’ for deforestation associated with ISPO certification. The second is ISPO implementation needs to be better monitored.

The question that really needs asking is why CDP is orienting itself towards criticising Indonesia’s domestic biodiesel policies, as well as its policy relationship with ISPO, at a time when Indonesia’s current deforestation policies – via Presidential moratoria – are clearly working. Record-low rates of deforestation are surely an indication that something is going right in the current setup, rather than the opposite.

The Threat of a Successful ISPO

In our view, both the HRW and CDP report signal larger things.

First, ISPO – like President Jokowi’s deforestation policies – is working. This presents a problem for those seeking to ban palm oil imports for biodiesel. If ISPO is successfully reducing deforestation, policymakers in the EU and elsewhere will have no reason not accept it. This would similarly mean that the entire certification infrastructure that has been created over the past 15 years by Western NGOs and Western companies will become less relevant.

Second, it will also mean is that Indonesia – and ASEAN – will no longer need the patronising hand of the West guiding it as it develops its own sustainable development pathway.

That process, to many in producing countries, looks like progress: increased forest protection and increased local control over sustainability policies. Perhaps to some in the NGO sector – with an eye on current and future grant monies – the success of ISPO looks more like a threat.