Private Multi-Stakeholder Governance in Indonesia’s Palm Oil Industry: A Case Study of the Roundtable on Sustainable Palm Oil, Its Internal Politics and Relationship with the State

The economic benefits brought by Indonesia’s palm oil industry come with significant environmental costs including yearly forest fires and transboundary haze. The slow progress of state regulatory efforts spurred some international private stakeholders to form a private multi-stakeholder governance institution; the Roundtable on Sustainable Palm Oil (RSPO), which uses market-driven instruments such as sustainability certification to promote environmentally sound practices among its members. Using a mix-method design analyses on interviews, meeting minutes, attendance records and other primary and secondary data, the thesis assesses RSPO against three global political economy schools of thought: neoclassical, statist and critical political economy. The findings support the neoclassical perspective to a certain extent as they show that RSPO has gradually built a robust and comprehensive sustainability certification system with a strong focus on peatland management and protection. RSPO...Show moreThe economic benefits brought by Indonesia’s palm oil industry come with significant environmental costs including yearly forest fires and transboundary haze. The slow progress of state regulatory efforts spurred some international private stakeholders to form a private multi-stakeholder governance institution; the Roundtable on Sustainable Palm Oil (RSPO), which uses market-driven instruments such as sustainability certification to promote environmentally sound practices among its members. Using a mix-method design analyses on interviews, meeting minutes, attendance records and other primary and secondary data, the thesis assesses RSPO against three global political economy schools of thought: neoclassical, statist and critical political economy. The findings support the neoclassical perspective to a certain extent as they show that RSPO has gradually built a robust and comprehensive sustainability certification system with a strong focus on peatland management and protection. RSPO achieves its progress, despite the voluntary nature of its membership, by establishing a strong foundation of democratic governance within its decision-making processes. However, the thesis also finds an imbalance of political power between the different membership sectors in RSPO’s internal governance and an accumulation of authority in the hands of a few influential members that have resulted in marginalization of certain stakeholders, most notably the Indonesian growers and civil societies. The perceived lack of political representation of Indonesian stakeholders in RSPO - an institution that purports to ‘govern’ one of the most lucrative industries in the nation - seems to validate the statists’ notion that PMG institutions seek to reduce and replace the role of the state. This exclusivity has led to the formation of a rival certification system by the state: The Indonesian Sustainable Palm Oil.Show less

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Private Multi-Stakeholder Governance in Indonesia’s Palm Oil Industry: A Case Study of the Roundtable on Sustainable Palm Oil, Its Internal Politics and Relationship with the State