In this webinar, Fitrian Ardiansyah shares the latest lessons learnt and business models that will lead to sustainable palm oil in Indonesia. He discusses new challenges and the innovation needed to ensure that sustainability really provides the positive economic, environmental and social outcomes at the local level.
INDONESIA STUDIES PROGRAMME WEBINAR
Friday, 02 October 2020 – ISEAS – Yusof Ishak Institute invited Fitrian Ardiansyah, Executive Chairman and Founder of Yayasan Inisatif Dagang Hijau (IDH-Sustainable Trade Initiative) in Indonesia, to speak in a webinar on “Climate Change and Indonesia’s Sustainable Palm Oil Production”. ISEAS Senior Fellow and Co-coordinator of Indonesia Studies Programme Dr Siwage Dharma Negara chaired the session.
Fitrian began by introducing the IDH-Sustainable Trade Initiative that builds public-private partnerships to work on pressing sustainable issues and to improve business-governance models to make sustainable production and trade economically viable. The Initiative has been working in nine provinces across the archipelago to capitalise knowledge and experience from the private sector, including by implementing a co-investment and innovative financing model with them. They believed that this sustainable production and trade can transform markets to the benefit of the people and the environment.
Despite the benefits of the palm oil industry to generate revenues from taxes and exports, Fitrian argued that the main challenges of sustainability in the palm oil industry are reducing deforestation and forest fires as well as improving productivity and the welfare of the farmers, villagers, and labours. For this, the existing solutions were to do a moratorium of the new expansion for palm oil plantation in Indonesia and Malaysia; to implement certifications through RSPO, MSPO, ISCC, and ISPO; and to develop commitments from companies.
Nevertheless, Fitrian argued that the solutions should go beyond papers by expanding collaboration linking with key sourcing areas and jurisdictions that still adheres to sustainability perspective. In the case of Indonesia, he mentioned that the main stakeholder for this collaboration is the government, particularly at sub-national level. IDH approached the local governments by working together and supporting the development of policies, documents, and budgeting system of green growth plans and green investment to be implemented in their regional budget (APBD). Fitrian said that this model has been successfully adopted in, among others, Aceh Tamiang district, and provinces like South Sumatra, Jambi, and West Kalimantan.
Fitrian asserted the importance of innovative financing for sustainability projects. He explained that innovative financing could create a structure in which institutional funds could work with banks and other financial institutions to manage the funding of the project. This investment, therefore, could be allocated for the palm oil production in the community – leading to the reduction of risks. Finally, Fitrian mentioned that the result of these sustainable palm oil efforts could be seen through better-quality on biodiversity, livelihood options, and fire prevention.
The webinar drew an audience of more than 80 participants from both Singapore and abroad. The panel then discussed the issues of palm oil certification, biofuel programs, problems of land use, the impact of Omnibus Bill to the environment, the role of China and Indonesian conglomerates in innovative financing, and efforts on preserving endangered species through sustainable financing.