Dear reader,

It is with deep concern that we see the Indonesian Palm Oil Moratorium expire in September 2021. The moratorium on the issuance of licenses for new palm oil plantations entered into force in 2018, in an attempt to combat the palm oil-driven deforestation and loss of peatland. This policy was expected to resolve concerns on palm oil in forest areas, reduce greenhouse gas emission, enhance facilitation for palm oil smallholders, and increase palm oil productivity. It was regarded as a positive step toward improving palm oil governance in Indonesia. The policy is conceptually strategic, the idea and the concept is good. Moreover, several regions has the initiatives to implement in the region level by reviewing and revoke the permit. However the policy is not yet optimally implemented, majority of the district have not responded of the presidential instruction, most of the work in national level still in the preparation and consolidation level. Therefore the policy needs to be extended to resolve and accelerate Indonesia’s palm oil governance reform for the future.

Consumer markets, such as the European Union, are on the brink of implementing legislation to address commodity-driven deforestation and ecosystem conversion. In addition, many companies that source palm oil for their products have committed to stop using palm oil that is linked to deforestation. Likewise, investors in consumer facing companies and palm oil plantations have set targets to minimize their involvement in deforestation. More and more investors consider deforestation, land use change and the associated impacts on biodiversity and climate change as systemic risks to their investment portfolios. If international companies and investors want to remain active in the Indonesian palm oil industry, it is essential that the Indonesian government extends and fully implements the Palm Oil Moratorium. A stable and robust regulatory environment is key in ensuring a bottom-line for long-term sustainability and investment opportunities.

It is unclear what will happen after the forthcoming expiration of the moratorium. To protect the Indonesian forests and peatlands, the progress booked under the moratorium should not be nullified. We therefore call on you to sign our letter to urge the Indonesian government to extend the moratorium and improve the implementation and enforcement.

Please find the letter on the next page. For more information and signing the letter, please contact:

If you and your organization interesting to support our call please full fill the form below:

https://forms.gle/zvG2KsZYf2gmN4qW6

Further information about the Indonesia palm oil moratorium, please kindly visit this link about our discussion on the importance of extending Indonesia Palm Oil Moratorium :

https://youtu.be/KU8Wya1AOSM

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Letter to the Indonesian government – Support for Palm Oil Moratorium Policy Extension

Number      :    103/K-PSW/VII/2021

Annex        :    Policy Paper on the Urgency for Palm Oil Moratorium Extension to Accelerate Palm Oil Governance Reform in Indonesia

Concerning :    Support for Palm Oil Moratorium Policy Extension

Dear Sir/Madam of,

It is with deep concern that we see the Palm Oil Moratorium expire in September 2021. As [parties that sign this letter], we are deeply concerned that the Palm Oil Moratorium has not led to the required and envisioned improvements on governance in the Indonesian palm oil sector. The Government of Indonesia issued Presidential Instruction No. 8 of 2018 concerning Postponement and Evaluation of Oil Palm Plantation Licences and Increasing Productivity of Oil Palm Plantations (the Palm Oil Moratorium) in 2018. This policy was expected to resolve concerns on palm oil in forest areas, reduce greenhouse gas emission, enhance facilitation for palm oil smallholders, and increase palm oil productivity. It was regarded as a positive step toward improving palm oil governance in Indonesia.

However, as the Palm Oil Moratorium expires this September 2021, there have been no significant achievements. The government’s national efforts comprised only of coordination and data consolidation with no resolution of conflicting palm oil cases. Success stories on licence evaluation only came from subnational governments, though achieved indirectly by the palm oil moratorium team.

In addition, the issuance of Law No. 11 of 2020 on Job Creation impedes Indonesia’s palm oil governance reform. The Job Creation Law was passed suddenly, bulldozing on-going reform processes. While the moratorium policy aims to suppress palm oil plantation expansion, especially in forest areas, the Job Creation Law is opening up investment opportunities and creating potentially greater control over land.. A group of civil society organisations in Indonesia is currently pursuing a formal lawsuit through the Constitutional Court to revoke the Job Creation Law.

On the international stage, especially in global markets, the Palm Oil Moratorium received positive response. As we know, demand for sustainable palm oil is on the rise. The Palm Oil Moratorium is the Government of Indonesia’s response to demands for sustainability. Palm oil governance reform is key for Indonesia’s CPO products to be accepted on global markets, and the palm oil moratorium is an essential policy tool. Consumer markets, such as the European Union, are on the brink of implementing legislation to address commodity-driven deforestation and ecosystem conversion. In addition, many companies that source palm oil for their products have committed to stop using palm oil that is linked to deforestation. Likewise, investors in consumer facing companies and palm oil plantations have set targets to minimize their involvement in deforestation. More and more investors consider deforestation, land use change and the associated impacts on biodiversity and climate change as systemic risks to their investment portfolios. If Indonesian companies want to retain full market access to the EU and other international markets, it is essential that the Indonesian government extends and fully implements the Palm Oil Moratorium. A stable and robust regulatory environment is key in ensuring a bottom-line for long-term sustainable corporate behaviour and investment opportunities.

We recognize that the Government of Indonesia is currently trying to improve palm oil governance but it still requires policy strengthening as well as determination and improvement regarding actual implementation. We see the need for extension of Presidential Instruction No. 8 of 2018 because it is still relevant with the current state of palm oil plantations in Indonesia and it can potentially address a number of problematic issues in the industry.

From the argument outlined above, we the Indonesian civil society organisations ask the Indonesian government to implement the following objectives:

  • Extension of the validity period and upgrade the Palm Oil Moratorium Presidential Instruction to a stronger regulation that legally binds all parties.
  • Strengthening of the Palm Oil Moratorium Presidential Instruction with specific targets such as increased productivity target, smallholders facilitation optimisation target, target area for evaluated palm oil plantation licences, target land area for palm oil resolution in forest areas (ha/year), and target for areas of remaining natural forest cover inside concessions returned into forest areas or designated as HCV (ha/year).
  • Enhancement and assurance of information transparency to the public regarding the Palm Oil Moratorium Presidential Instruction.
  • Provision of direct support by the Central Government to the provincial, district and municipal Subnational Apparatus Organisations (OPD), such as allocation of budget and provision of technical guidelines for implementation.
  • Support for local leaders and OPD that have reviewed licences and are willing to take corrective actions, and assurance that corrective actions taken by local leaders provide real impacts for indigenous peoples or surrounding communities.

On behalf of civil society organisations:

  1. Perkumpulan Sawit Watch

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