Abstract
AbstractThe global palm oil value chain has grown in complexity; stakeholder relationships and linkages are increasingly shaped by new public and private standards that aim to ameliorate social and environmental costs while harnessing economic gains. Regulatory initiatives in the emerging policy regime complex struggle to resolve sector‐wide structural performance issues: pervasive land conflicts, yield differences between companies and smallholders, and carbon emissions arising from deforestation and peatland conversion. Identifying opportunities for more effective governance of the palm oil value chain and supply landscapes, this paper explores disconnects, complementarities, and antagonisms between public regulations and private standards, looking at the global, national, and subnational policy domains shaping chain actors’ conduct. Greater complementarities have emerged among transnational instruments, but state regulation disconnects persist and antagonisms prevail between national state regulations and transnational private standards. Emerging experimental approaches, particularly at subnational level, aim to improve coordination to both enhance complementarities and resolve disconnects.
Highlights
Regulating oil palm expansion to mitigate negative environmental impacts while reducing the yield and return differences between large-scale plantations and smallholder oil palm growers has become one of the tropics’ most pressing sustainability challenges (Sayer et al 2012; Rival & Levang 2014)
This paper is guided by three research questions: (i) What are the elements that characterize the policy regime complex governing the palm oil sector?; (ii) What are the main interactions – in terms of disconnects, complementarities, and antagonisms between public regulations and private standards – that affect the performance of the palm oil sector?; and (iii) What is the potential of the three pathways identified to bridge sector performance gaps and enhance regulatory cohesion and legitimacy? To answer these questions, we critically examine the interactions between global regulatory initiatives and public regulations that shape the global palm oil value chain, while focusing on the specific case of Indonesia, the world’s largest oil palm producer, where a comparatively dynamic context of policy innovation has emerged
Policies adopted by international financial institutions are being internalized by domestic commercial banks in Malaysia and Indonesia, stimulated by state regulatory bodies Consumer countries adopt import policies that rely on voluntary system standards (i.e. International Sustainability and Carbon Certification (ISCC), Roundtable for Sustainable Palm Oil (RSPO)) to verify that supply originates from sustainable sources The Crude palm oil (CPO) Fund targets resources to support improvements to smallholder yields under approaches endorsed by companies The private sector adopts codes of conduct and sustainability policies that rely on RSPO certification, and occasionally, makes more ambitious efforts toward de-linking supply from deforestation Land-use regulations pay increasing attention to methods and criteria developed by private standards to protect forests and peatlands
Summary
Regulating oil palm expansion to mitigate negative environmental impacts while reducing the yield and return differences between large-scale plantations and smallholder oil palm growers has become one of the tropics’ most pressing sustainability challenges (Sayer et al 2012; Rival & Levang 2014). In the palm oil sector, the state regulations and private standards that constitute this policy regime complex aim to address three of the sector’s major unresolved performance gaps: (i) conflicts over land and benefit flows, linked to industrial plantation expansion; (ii) the large yield gap between smallholders and company plantations; and (iii) detrimental environmental impacts (Cramb & McCarthy 2016; Pacheco et al 2017a). This paper is guided by three research questions: (i) What are the elements that characterize the policy regime complex governing the palm oil sector?; (ii) What are the main interactions – in terms of disconnects, complementarities, and antagonisms between public regulations and private standards – that affect the performance of the palm oil sector?; and (iii) What is the potential of the three pathways identified to bridge sector performance gaps and enhance regulatory cohesion and legitimacy?
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