Local Impacts of Competition Between Transnational Initiatives to Govern Palm Oil Supply Chain and State Sovereignty: Case Studies from West Sumatra and East Kalimantan

Dr Mariko Urano1, Dr.  Kurnia Warman2

1Hokusei Gakuen University, Sapporo, Japan, 2Andalas University, Padang, Indonesia

The Indonesian government has stressed the contribution of the palm oil sector to eradication of rural poverty and job creation. But the failures of domestic regulations to properly address forest destruction and land grabbing resulting from palm oil production have led to the rise of transnational governance initiatives, specifically private certifications and trade restrictions of importing countries. Based on interviews and participant observations conducted among populations living in Kalimantan and Sumatra, two major oil palm producing islands in Indonesia, this paper argues that the transnational palm oil governance initiatives have failed to make beneficial contributions to local societies.  In West Sumatra, the low commodity price resulting from the import restrictions of the EU and US has impoverished local smallholders, who cannot find alternative livelihoods.  Due to flawed implementation process of free, prior, and informed consent (FPIC) in sustainable standards of private certification, specifically the lack of veto powers and transparency, local land rights of Dayak populations facing large scale oil palm plantations in East Kalimantan have remained weak.  The Indonesian government responded to the export challenges by increasing the domestic use of palm oil as biofuel, showing limited influence of transnational initiatives and on-going supremacy of state sovereignty in environmental governance.


Mariko Urano is a professor at Hokusei Gakuen University, Sapporo, Japan. She has conducted her field research in Kalimantan, Indonesia since her doctoral research at Georgetown University, Washington, DC in the late 1990s. Her research interests include agrarian politics, forest governance, and human rights of minority populations. Corresponding author: uranom@hotmail.com

Kurnia Warman is a Lecturer in Agrarian Law at the Faculty of Law of Andalas University, Padang, Indonesia. He completed his Doctoral Program at the Faculty of Law, Gadjah Mada University, Yogyakarta in 2009. He studies legal pluralism, specifically land rights of indigenous peoples in relation to plantation business activities.   



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