Major palm oil companies that backed a landmark Indonesian "zero deforestation" pact on green practices have now ditched it in favour of less strict standards, triggering criticism the companies have caved into Indonesian government pressure.
The companies signed the 2014 Indonesia Palm Oil Pledge, or Ipop, in an agreement hailed as boosting efforts to fight rampant deforestation and annual forest fires and the haze. As part of the pledge, the firms, which include top palm oil producers and traders, pledged no development of peatlands of any depth. Peatland fires are a major source of the haze.
But on Friday (July 1), the companies said Ipop had run its course and was no longer needed. They supported the Indonesian government's efforts to "transform the palm oil sector" and to strengthen the country's own certification standards called the Indonesia Sustainable Palm Oil, or Ispo.
"Ipop signatories have decided that recent groundbreaking policy developments in Indonesia have fulfilled the purpose of Ipop to help accelerate and promote this transformation toward sustainability and therefore its presence can be dissolved," the grouping said in a statement on Friday. They pointed to government actions that included the creation of a peatland restoration agency.
The Ipop companies are Wilmar International, Golden Agri Resources (GAR), Cargill, Asian Agri, Musim Mas and Astra Agro Lestari.
The Ispo, which is mandatory, bans land-clearing in primary forests and peatlands. The Ipop, which is voluntary, goes further by banning land-clearing in secondary forests and bushland that has high carbon content.
Green groups have condemned the move, saying the firms were only caving in to government's pressure.
The Agriculture Ministry earlier this year complained that the Ipop was hurting smallholder producers who could not afford to adopt sustainable forestry practices under the pledge. The Business Competition Supervisory Commission (KPPU) had alleged that as a result, a cartel-like monopoly is created by the signatories.
Greenpeace Indonesia forest campaigner Annisa Rahmawati said in a statement on Friday that "the government officials have bullied and threatened Ipop members".
"The Ministry of Agriculture needs to get its priorities right. Last year's forest fires crippled Indonesia's economy and poisoned people across the region," she said.
The haze crisis blamed on forest fires in Indonesia last year were the worst in the nation's history by several measures, causing widespread illness and billions of dollars in losses to the economy.
Ms Annisa urged government officials to urgently work towards delivering President Joko Widodo's plans to stop forest fires by halting the palm oil industry's expansion into forests and peatlands.
The Coordinating Ministry for Economic Affairs said in a statement on Wednesday that the Ispo is "a single standard for sustainable palm in Indonesia" and will adopt international best practices which are in line with the country's laws.
Cargill said in a statement: "With the affirmative action by Indonesia towards a sustainable palm oil sector, Cargill supports the dissolution of Ipop."
In a statement, Wilmar International said it welcomed the Indonesian government's initiative to lead the country's palm oil industry towards more environmentally friendly development.
"In the past year, the Government of Indonesia (GOI) has shown much leadership in strengthening its sustainability policies. These include the moratorium on peatland development and the creation of the National Peat Restoration Agency, the moratorium on new permits for oil palm plantations, as well as progress on the legal protection of High Conservation Value (HCV) areas. All these actions are clear indications of the GOI's resolve to progress towards a sustainable palm oil sector."
Wilmar said given these developments, "IPOP as an entity is no longer required". But it stressed it would continue its zero-deforestation, no peat, no fires and no exploitation policies as before.
Mr Glenn Hurowitz, senior fellow at Washington-based Centre for International Policies, said the need for robust industry and government action to protect Indonesia's forests and people is "as urgent as ever".
"If the palm oil, paper, and rubber industries want to avoid a repeat of the haze disaster, they will need to team up to create comprehensive, transparent implementation mechanisms," he said.
