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There is abundant literature focusing on the palm oil sector, which has grown into a vigorous sector with production originating mainly from Malaysia and Indonesia, and on increased palm oil consumption in many countries around the globe, particularly European Union states, China and India. This sector expansion has become quite controversial, because while it has negative social and environmental impacts, it also leads to positive benefits in generating fiscal earnings for producing countries and regular income streams for a large number of large- and small-scale growers involved in palm oil production. This document reviews how the social, ecological, and environmental dynamics and associated implications of the global palm oil sector have grown in complexity over time, and examines the policy and institutional factors affecting the sector's development at the global and national levels. This work examines the geographies of production, consumption and trade of palm oil and its derivatives, and describes the structure of the global palm oil value chain, with special emphasis on Malaysia and Indonesia. In addition, this work reviews the main socioenvironmental impacts and trade-offs associated with the palm oil sector's expansion, with a primary focus on Indonesia. The main interest is on the social impacts this has on local populations, smallholders and workers, as well as the environmental impacts on deforestation and their associated effects on carbon emissions and biodiversity loss. Finally, the growing complexity of the global oil palm value chain has also driven diverse types of developments in the complex oil palm policy regime governing the sector's expansion. This work assesses the main features of this emerging policy regime involving public and private actors, with emphasis on Indonesia. There are multiple efforts supporting the transition to a more sustainable palm oil production; yet the lack of a coordinated public policy, effective incentives and consistent enforcement is clear and obvious. The emergence of numerous privately driven initiatives with greater involvement of civil society organizations brings new opportunities for enhancing the sector's governance; yet the uptake of voluntary standards remains slow, and any push for the adoption of more stringent standards may only widen the gap between large corporations and medium- and smallscale growers. Greater harmonization between voluntary and mandatory standards, as well as among private initiatives is required. Commitments to deforestation-free supply chains have the potential to reduce undesired environmental impacts from oil palm expansion, and while this risks excluding smallholders from the supply chains, such commitments may function to leverage the upgrading of smallholder production systems. Their success, however, will require greater public and private sector collaboration.
The palm oil sector in Indonesia has seen the adoption of zero deforestation commitments by the larger companies in the form of various pledges around No Deforestation, No Peat, and No Exploitation (NDPE). At the same time, at the national and sub-nationa
Key messages Different types of interactions are emerging involving public and private (non-state) actors across sustainability initiatives in the palm oil sector in Indonesia.Such initiatives include the development of gover
The palm oil sector has been targeted by NGOs for its alleged negative environmental and social impacts. In this regard Indonesia represents a major challenge because it is home to some of the largest tropical forests in the world. A recent wave of corporate sustainability commitments peaked with the New York Declaration on Forests in September 2014, which emerged amidst the development of other standards and initiatives toward sustainable palm oil production. This process has made this field very complex, especially in Indonesia. The present study aims at clarifying the positions taken by the various stakeholders and assesses the level of political support and the functioning of policy networks. Results from our Policy Network Analysis based on the survey of 59 institutions representing all types of stakeholders (e.g. government, corporate, NGO) at all levels (international, Indonesian and local) show that standards and initiatives for sustainability have contrasting visibility and impact among stakeholders. In this context, RSPO stands as a reference, with the efforts by the Government of Indonesia to promote its own standard with ISPO yet to gain traction. While IPOP was a well-appreciated initiative and a symbol of zero-deforestation commitments, opposition to it by the government and conflicting interests have resulted in its disbandment. Overall, the lack of progress for sustainable palm oil practices on the ground, in the view of respondents, seems to be caused by political and legal barriers rather than technical challenges or economic losses at a country level.
One issue that is widely discussed in various scientific forums in the world, both in Indonesia, Malaysia, Europe and the United States is palm oil. These commodities expanded rapidly and became one of the world's major source of vegetable oil, and managed to beat the dominance of soybean oil. This book presents information and data about the Indonesia's palm oil industry. Contents 1. Introduction: Sustainability as a Concept in Economic Thought and Policy in Indonesia 2. Methodology 3. Sustainability: Flexibility and the Role of Government 4. General Facts on Indonesia 5. History of the Palm Oil Industry in Indonesia 6. Eco-Physiology and Advantage of Oil Palm 7. Supply Chain in Palm Oil Industry in Indonesia 8. Government Policy 9. Conclusion
The interaction of sustainability governance and global value chains has crucial implications the world over. When it comes to sustainability the last decade has witnessed the birth of hybrid forms of governance where business, civil society and public actors interact at different levels, leading to a focus on concepts of legitimacy within multi-stakeholder initiatives (MSIs). Based in over 15 years of theoretical engagement and field research, Business, Power and Sustainability draws from both labour-intensive value chains, such as in the agro-food sector (coffee, wine, fish, biofuels, palm oil), and from capital-intensive value chains such as in shipping and aviation, to discuss how sustainability governance can be best designed, managed and institutionalized in today’s world of global value chains (GVCs). Examining current theoretical and analytical efforts aimed at including sustainability issues in GVC governance theory, it expands on recent work examining GVC upgrading by introducing the concept of environmental upgrading; and through new conceptions of orchestration, it provides suggestions for how governments and international organizations can best facilitate the achievement of sustainability goals. Essential reading on the governance of sustainability in the twenty-first century.