Nov 6, 2013




Palm oil and its derivatives are part of thousands of products across the globe today. One can find it in biodiesel, cosmetics, food, as well as candles, to mention only a few. Since 1990, palm oil consumption has quintupled worldwide. The demand in Asia, where palm oil is used as cooking oil, accounts for a $44 billion industry. Indonesia is the world’s largest producer of crude palm oil, with a forecasted annual growth in production of 10 per cent. Early 2013, exports from Indonesia hit a five-year high.


In 2012, the total plantation area for palm oil production in Indonesia was estimated to account for approximately 7.65 million hectares generating 22 million tons of palm oil. Indonesia aims to double its current palm oil production to reach 40 million tons by 2020. Estimates of the land required for such production vary widely, ranging from 5 to 20 million additional hectares. This expansion threatens the tropical forest, peat land and biodiversity living off it.


However, there are opportunities for production increases through productivity gains and use of degraded lands. The need to balance growth and economic potential with maintaining healthy ecosystems and communities is fundamental to secure the future of both forests in Indonesia and improved livelihoods through economic stimulation.

The government recently established the Indonesia Sustainable Palm Oil (ISPO) certification scheme, which requires producers to comply with existing regulations for palm oil production, environmental management, responsibility to workers and social communities. The United Nations Development Programme (UNDP) supports the operationalisation and optimisation of ISPO, as it covers all producers in Indonesia to ensure compliance with the Indonesian legal system. The Roundtable for Sustainable Palm Oil (RSPO), leading group of palm oil industry players promotes good practices and standards for sustainable palm oil, therefore a cooperation with ISPO is decisive for the future sustainability of the Indonesian palm oil sector.





The Sustainable Palm Oil Initiative (SPO) is a major public private partnership that supports the sustainable production of palm oil while minimising adverse social and environmental impacts. The project aims at promoting sustainable palm oil by reducing deforestation and facilitating structural change in the palm oil sector. The five-year programme spans 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 by focusing on the following strategic areas:


1. Ensure palm oil stakeholders in Indonesia are well coordinated through the National Sustainable Palm Oil Platform:

§  facilitate coordination of palm oil stakeholders through

-      Government involvement to drive institutionalisation and sustainability

-      Private sector engagement

-      NGO, local communities, smallholder organizations

§  provide access to government policy making (recommendations to ISPO and other underlying regulations)

2. Strengthen smallholders to improve sustainable livelihoods and agricultural practices

§  Provide training to smallholders on productivity, environment protection, market orientation, management and ISPO certification

§  Strengthen local government agricultural extension workers to ensure sustainability and scaling up of successful solutions

§  Work with smallholder cooperatives and larger plantations to reduce forest encroachment

3. Reduce deforestation:

§  Accelerate land swaps and use of degraded land for palm oil production through legal/policy development, leading to reduced use of fertile forested areas.

§  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

4. 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 and ISPO

§  Strengthen local conflict mediation systems – leading to more effective use of land in the area

5. Operationalise the national certification scheme to foster a sustainable palm oil sector

§  Support ISPO operationalisation and optimisation of guidelines so that ISPO can effectively address socio-economic and environmental problems

§  Support the development of a third-party auditing system for ISPO to ensure international credibility





1) Buy-in and ownership of the Indonesian government for supporting sustainable palm oil

2) Inter-ministerial coordination strengthened

3) Policy reforms identified to address the root causes of deforestation from palm

4) Development of National Sustainable Palm Oil Platform since 2011, socialised by the Minister of Agriculture in 2012, to be operationalised in 2013

5) Joint study comparing RSPO and ISPO was developed, focusing on High Conservation Value (HCV) and Free, Prior and Informed Consent (FPIC)






Ministry of Agriculture, Ministry of Forestry, Ministry of Cooperation and Small and Medium Enterprises, National Land Agency (BPN), Ministry of Environment, Ministry of Trade


Private Sector:

IKEA, Johnson & Johnson, Mondelēz

Other Partners:

key stakeholders in the National SPO Platform include national and local Government, ISPO, RSPO, GAPKI, the UN Global Compact, smallholder and environment associations/initiatives, SAWIT WATCH/SPKS, International Finance Corporation, WWF, Zoological Society of London


Funding partners:

IKEA, Johnson & Johnson, Mondelēz




For more information, please contact

Tomoyuki Uno, Programme Officer Environment Unit, UNDP, Indonesia;

Tel.: +62 (21) 314 1308 ext. 203; Email:

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