The Indonesia National Action Plan on Sustainable Palm Oil: a UNDP Impact Story

August 11, 2022
 Sustainable Palm Oil Initiative in Agusriady Saputra.

Sustainable Palm Oil Initiative

Agusriady Saputra ©UNDP Indonesia

The UNDP has been working for over a decade, through the Green Commodities Programme (GCP), on transforming agricultural commodity supply chains in order to make them sustainable. Our entire focus is on helping to improve the national, economic, social and environmental performance of agricultural commodity sectors, through effective collaborative action and innovative systemic approaches. One of our signature processes is multistakeholder national and subnational commodity platforms and action plans, where stakeholders align behind a shared vision for the future of their commodity sectors, and engage in order to generate change. The focus of this story is on our experience in Indonesia.

“UNDP has worked very effectively in partnership with the Government of Indonesia since 2010. The adoption by the Indonesian government of a National Action Plan (NAP) on Sustainable Palm Oil, collaboratively developed by the Forum for Sustainable Palm Oil of Indonesia (FoKSBI), marked an essential milestone in this journey.”
Ibu Musdhalifah Machmud, Deputy Minister for Food and Agribusiness at Coordinating Ministry of Economic Affairs Indonesia, 2021

The Indonesia National Action Plan on Sustainable Palm Oil (NAP SPO), facilitated by UNDP through support from the Good Growth Partnership (GGP) and the Swiss State Secretariat for Economic Affairs (SECO), and signed by the president in November 2019, was a major step forward for sustainable agriculture in Indonesia. In this story, we ask what the impacts and early outcomes of the NAP SPO have been so far, how UNDP has helped, and where we go from here.

Tracking the impact of sustainability initiatives requires a long-term, multi-dimensional view. Traditional approaches to project management seek out specific, quantifiable measures of progress. In forest conservation this might translate to: how many trees were saved? How many tonnes of carbon emissions were avoided? How much money has been invested, what laws enacted, and what alternative, sustainable growth industries have emerged? These tangible outcomes are popular because they are easy to understand – and they are, after all, the kind of outcomes we all hope to see. But the reality is that systems, and system change, are highly complex. Long-lasting, meaningful outcomes stem not just from one action, by one party, but from many changes across many sectors and stakeholders, over a long time. These sorts of changes require relationship building and trust which, like love, cannot be quantified.

These factors – trust, strengthened relationships, new collaborations, and the ability to adapt in response to changing and complex realities – are among the most important successes that have emerged from UNDP’s multistakeholder platforms. New and strengthened relationships support measures to put in place the enabling environment for deforestation- and conversion-free commodities production. And this can be measured in numbers: to date, multi-stakeholder collaborative mechanisms in Indonesia have allowed 245 organisations to connect and engage in broad-based dialogue and collaborative action to implement sustainable commodities production, including 92 at national level, 81 at provincial level, and 72 at district level.

This is supported at the highest level. Thanks to the NAP SPO, all palm oil producing provinces and districts are now required by the Government of Indonesia to allocate a part of their budgets to action plans and to multistakeholder processes, which are so important for building Effective Collaborative Action. Already, governance structures have been established in eight provinces and 12 districts which are in the process of developing or have developed their action plans. These subnational Implementation Teams will take charge of implementing action plans. However implementation of the Presidential Instruction for the NAP SPO can continue (although budget allocation remains challenging in the wake of the national Covid-19 response). The process of developing the NAP SPO has helped to identify areas where capacity-building for smallholders is needed, and as a result, private sector support to smallholders has been strengthened, so that their actions for sustainable palm oil can align with the NAP SPO. Socialisation of the NAP SPO has also helped galvanise action for sustainable palm oil. For example, in North Sumatra and Aceh over 130 representatives from the private sector, financial institutions, civil society organisations, and government, are working together more closely on sustainable commodity production in Indonesia through the Coalition for Sustainable Livelihoods, guided by the priorities of the NAP SPO and the local multistakeholder platforms led by subnational governments initiated with UNDP support.  

Policy and regulatory support, infrastructure, and data gathering have also been strengthened thanks to the NAP SPO. Regulatory and policy support of smallholders has increased, with a specific ministerial decree issued to encourage the growth and development of smallholder plantations[1]. IT infrastructure and connectivity has been bolstered in Agriculture Extension Centers.  Inter-ministerial coordination has been improved, which is essential for the sustainability of the palm oil sector, and its importance has been institutionalised by the Presidential Instruction legalising the NAP SPO:

[1] Minister of Agriculture Regulation No. 18/2021 On Facilitation of Smallholder Plantation Development (FSPD)

2015 © UNDP Indonesia Sustainable Palm Oil Initiative  in Agusriady Saputra.jpg

Sustainable Palm Oil Initiative

Agusriady Saputra ©UNDP Indonesia
“All the government departments and ministries need to come together – often these had been working in isolation from one another, even though they all have a part to play in transforming palm oil. Some ministries are obvious participants – everyone would expect Agriculture and Environment to be involved, but of course there’s also the other ministries ... When we had brought all of our colleagues together, there were 14 ministries that needed to be included in the Presidential Instruction – and UNDP’s skill in making inter-ministerial connections was essential.”
Ibu Musdhalifah Machmud, Deputy Minister Coordinating Ministry of Economic Affairs of Indonesia, 2021

Laying the groundwork for important climate impacts, measurement, reporting, and verification of greenhouse gas emissions reductions has been extended to palm oil plantations. The concept of essential ecosystem areas (KEE) has been communicated and explained, in order to help plantation communities, workers, and stakeholders get comfortable with new sustainable concepts and practices, supporting the implementation of new practices. So far 70 KEE collaborative management processes have been set up in 34 provinces.  And to ensure these and other processes are carefully established and additional support given when necessary, a national Monitoring, Evaluation, and Reporting (MER) framework has been established to monitor the implementation of the Action Plans. These are all positive developments, and essential foundations for scaling up the transition toward sustainable palm oil production in Indonesia.

More needs to be done, however, to ensure that data gathering and MER are done in an effective way. The National and Subnational action plans Implementation Teams still need support from UNDP in the short term to improve their MER on action plan implementation, so that data sets are comparable, and so that Indonesian stakeholders can confidently take control in the future. Enforcement mechanisms also need to be developed so that there are legal or administrative consequences for non-compliance. For example, the Minister of Agriculture Regulation On Facilitation of Smallholder Plantation Development still requires improved inter-ministerial coordination, further guidance to concessions for implementation and land tenure issues, and strengthened IT infrastructure and data gathering, in order to build up monitoring and enforcement.

Much has been achieved at the level of coordination and trust-building, which is so important for creating change. The scale of such a challenge is great in any society, but Indonesia’s unique geography and socio-political dynamics make this especially difficult. With 17,508 islands, 264 million inhabitants, and continuously evolving perspectives about land use, coordinating policy, engagement, and shared vision is ambitious.

2015 copyright Shutterstock.jpg
2015 © Shutterstock.jpg
“Transforming a vital economic sector like palm oil in Indonesia is a hugely complex task. Not only did we have to bring together stakeholders at the national level from government, the private sector, smallholder farmers and civil society, we had to do the same at every geographical level – regional and local. So in addition to the horizontal collaboration we had to achieve vertical collaboration from one level of geography to the next.”
Ibu Musdhalifah Machmud, Deputy Minister Co-Ordinating Ministry of Economic Affairs of Indonesia, 2021

UNDP is proud to have been a part of this process, and our multistakeholder platforms, along with resources such as the Effective Collaborative Action approach or the Ladder of Change, have been indispensable. These tools and processes have enabled us to see what psychological and behavioural issues emerge and evolve during the various stages of system change. They ensure that we can identify and work with the realities of power, politics, and conflicting perspectives. They help all stakeholders to develop collaborative actions that support trust, community, and the environment, and move forward collectively, as a group. The Ladder of Change piloted in Indonesia and Liberia, under the GGP, uncovers areas of contention and agreement of embedded interests, cooperation, fears, perceptions, and more. It's highly adaptive, so what is measured is what really matters to each specific group and situation, and it helps identify constructive ways of addressing difficult issues.

The process of building up legal and policy frameworks, financing, practices, and recognition for sustainable agricultural production is not always smooth – transition never is. But the trajectory in Indonesia for the NAP SPO is positive, and it is critical for UNDP to continue working with our many partners in Indonesia to advance this important work. Monitoring of the NAP SPO has shown where more work is needed. Resource gaps remain at the government level in the NAP SPO Implementation Team, with financing and staff still limited. Standardised guidance on how to implement the action plan still needs to be socialised at the subnational level; budgets need to be allocated to allow the operations, coordination, facilitation, implementation, and monitoring to be scaled up independently of project funds. Knowledge retention also needs to be strengthened, so that progress can continue throughout the evolution and periodic shifts that are normal in political systems. UNDP needs donor funding to continue supporting the Indonesian government at this essential capacity building stage in the implementation of the NAP SPO, to build up the structures, processes, and norms to bolster sustainable commodities production. Please help us to continue that work.