Is Norway Funding anti-Palm Oil Campaigns in Indonesia?

The Norwegian Government has announced its funding allocations for the next iteration of the Norwegian International Climate Forest Initiative (NICFI). NICFI funding has been the source of considerable controversy in Indonesia and around the world because of Norway’s funding of NGOs to effectively act as political lobbyists for the Norwegian Government.

The lobbying has in the past been particularly intense on palm oil, prompting something of a backlash in Jakarta. In addition, there was additional controversy in Oslo over Norway’s funding of US lobbying firm Waxman Strategies and its NGO offshoot Mighty Earth.

NICFI Scrutiny and New SDG Commitments

As we’ve previously written, Norad’s NICFI program has come under considerable internal scrutiny in a recent review, which questioned the overall effectiveness of the programs, particularly around poverty reduction. A key takeaway from the review was:

“A clear and overarching goal for private sector initiatives is to support poverty reduction, but the evaluation finds that the majority of the measures do not have a conscious relationship to how the measure affects vulnerable groups and the level of poverty locally, nationally or globally.”

Some further developments have also taken place since the beginning of 2021 around Norad’s programmes. In March, Norad announced that it would reshape its priorities in line with the Sustainable Development Goals. A broader stakeholder review of Norad’s contribution to the SDGs was also published in June. Indonesia was able to contribute to the review, and asked specific questions on the role of private sector and civil society organisations in Norad’s activities.

There are several key sentences in the new Norad strategy –

“[Norad will] require a more extensive dialogue with our partners and partner countries. Norad must therefore be able to mobilise different kinds of actors to achieve the SDGs. This is the core of our strategy, embodied in the slogan ‘Facts inform policy’. Facts must always be the basis of our actions.

“We engage in strategic dialogue with our partners before, during and after specific initiatives… In order to succeed, we must gain a better understanding of the context in which our funded initiatives are intended to function …”

Help or hypocrisy?

These sentences are significant for one of Norad’s key recipients, Rainforest Foundation Norway (RFN).

RFN will take around USD25 million over the next five years.

The RFN program has allocated around 12 per cent of its funding to Indonesia. Norad has stated that the funding should be oriented towards five outcomes:

  • Effective international incentive structures for reduced deforestation in tropical forest countries;
  • Approved and implemented policies for sustainable forest and land use in tropical forest countries;
  • Financial markets stimulate deforestation-free commodity production in tropical forest countries;
  • Reduced forest crime;
  • Improved rights and livelihoods for indigenous peoples and local communities in tropical forest countries.

The agreement between Norad and RFN was finalised in June of this year.

As we’ve previously pointed out, Norad’s funding of Rainforest Foundation Norway’s work resulted in a report that was factually incorrect in terms of its attempts to project palm oil demand.  RFN also lobbied against the Indonesia-EFTA trade agreement because of the palm-based biofuels.

In addition, in June – the very same month that Norad and RFN signed the agreement, RFN trumpeted its contribution to falls in palm oil consumption by household consumers in Norway.

The big question for Norad now is whether they are living by the revisions of their development policies: the clear anti-palm oil slant suggests not. Are they actually committed to ‘facts’? Are they committed to effectively working with partner countries? Are they interested in poverty reduction or just making Norwegians feel better about the fact that their wealth has largely come from fossil fuels?

Perhaps a more important question: how will the Indonesian government react to yet more funding from the Norwegian government that ‘could’ be against Indonesia’s national interests?

NGOs Aim at President Jokowi on Moratorium

Last week a group of NGOs – ranging from WWF to Greenpeace – took aim at Jokowi’s success on the forest moratorium and Indonesia’s lowest deforestation rates on record. The campaign groups called for a permanent moratorium on new oil palm plantations across the board.

The rationale is that President Jokowi’s three-year moratorium on new oil palm plantations introduced in 2018 is set to expire in September this year.

But they have also generally failed to mention that the country’s other moratorium on forest clearance — issued back in 2011 and extended twice – was made permanent in 2019.  This has been the key tool for stopping deforestation thus far. The palm oil moratorium incorporates multiple agencies, provincial governments and includes issues such as governance, government processes, smallholder productivity, economic impacts. It also has an emphasis on data collection, aligning with spatial planning regimes and developing implementation plans. Government officials have already stated that it will be extended if necessary so that reporting can be completed.

The call prompts a very serious question that we have posed many times before: are campaigners interested in stopping deforestation? Or are they only interested in stopping palm oil?

The call simply assumes that palm oil is the only reason that farmers in Indonesia deforest. It is also based on a shocking assumption that if oil palm plantations are banned, farmers simply won’t go and plant something else, whether it’s establishing rubber and coconut plantations, rice, or other food crops.

It’s worth reminding, for example, that in September last year President Jokowi announced plans for the establishment of new food crop estates. Campaigners in the UK have already objected to the establishment of the new food producing areas in Indonesia, arguing that they will only serve corrupt political and business figures. Perhaps they are overlooking that Indonesia – a lower-middle income country – may actually be seeking a more stable food supply.

The argument for maintaining the palm oil moratorium is therefore in our view not convincing, particularly as the forest clearing moratorium is what is stopping deforestation. The Reuters report on the activist push last week noted: “The rate of expansion of palm oil plantations was already in decline in 2018” when the palm moratorium was introduced, arguing that this was due to low vegetable oil prices.

Granted, vegetable oil prices were weak, but this is a simplistic interpretation. If expansion was already in the decline, the existing forest moratorium is also a likely contributor.

Campaign groups have further argued that the moratorium should be extended for Indonesia to meet its obligations under the UNFCCC – a clear shot across Indonesia’s bow in the lead-up to the UN climate meeting later this year.

However, it’s also likely that the campaign pushback was designed to coincide with the release of the most recent IPCC report which, by the way, did not mention palm oil.