Impact of Roundtable on Sustainable Palm Oil (RSPO) Certification on The Indonesian CPO Exports to The Destination Countries

Abstract

Palm oil is one of the commodities of plantation products that has an important role in economic activities in Indonesia because of its ability to produce vegetable oil which is much needed by the industrial sector. The potential development of Indonesia's palm oil exports is very high considering the many benefits derived from these products. Therefore, there is a need to ensure that CPO products have a sustainable nature, one of which is that CPO products must be RSPO certified. This study analyzes how the influence of various factors that can affect Indonesia's CPO exports, one of which is RSPO certification using panel regression with the basic gravity model. The data which is used in this research is panel data in the form of time series for 20 years with cross sections from five major importing during 1999-2018. The analysis shows that importer’s GDP and exchange rate significantly and positively affect Indonesia's CPO exports, while the population of the importing country has a significant and negative effect. The RSPO dummy variable shows a significant and positive value, meaning that there was a significant difference between CPO exports when the RSPO certification took effect before and after 2008. Although the RSPO has an effect on Indonesia's CPO exports, there are still a number of indicators from the RSPO that Indonesia has not been able to fulfill. That indicator can be used as a material for consideration to be adopted in national certifications such as ISPO so that Indonesian CPO products can be said to be sustainable so that they can reach wider export markets.