The advocacy roles of palm oil groups

This was written by Edi Suhardi who works at one of GAPKI’s member companies. It was published in Jakarta Post.

Last week, Bandung hosted the annual congress of the Association of Indonesian Palm Oil Companies (GAPKI). While this was routine for the association, it is imperative for the association to rethink its role as the vanguard of efforts to advance the country’s palm oil industry.

Palm oil is now Indonesia’s second-biggest export after coal. Despite its achievement, the industry is treated like a Cinderella, one that works hard beyond her means to satisfy the family and yet, treated like a stepchild -- unappreciated and oppressed.

Looking at this Cinderella phenomenon, the new management of GAPKI should more actively voice its members’ interests. Todate, there are unfair negative perceptions that the association has yet to address.

Policy-making and business interests are closely connected. Through lobbying, one can "influence the thinking of legislators or other public officials for or against a specific cause” (Accountability & UN Global Compact, 2005).

In the business world, lobbying is part of “corporate political activity”, which certain interest groups engage in when they wish to influence political processes and decisions. In this sense, it covers a wide range of activities from advertising and other forms of public communication to stakeholder engagement, commissioning research, preparing position papers, launching legal action, or contributing to election campaign financing.

Interest groups, including corporations and associations representing corporations and the industry, have the political rights to influence public officials by voicing their interests. However, this right is legitimate only if it is balanced by the obligation to act responsibly, thus balancing rights and obligations.

This can be referred to the notion of “corporate citizenship”, when companies involve themselves in the citizenship arena, exercising their rights to actively participate in societal decision-making.

Indonesia is bestowed with tropical weather, ample agricultural land, with appropriate rights to the land, attractive investment climate. Also, we have a wide talent base for all levels of management, from strategising to operational, spread across the sprawling palm oil value chain.

With all these strengths, there are many business development opportunities both in the upstream as well as down stream. Currently, we are the biggest palm oil exporter, servicing the world’s increasing appetite for cooking oil and energy.

We have friendly investment laws. The export orientation also induces sustainable palm oil-based management, with a growing adoption of international sustainable certification, servicing both established oil markets in Europe and now dominating markets in India and China.

The palm oil industry is a major contributor to the Indonesian economy supporting livelihoods that feed 3.3 million households. Yet, when it is time to exercise its legitimate rights as a corporate citizen, the palm oil industry is treated like a Cinderella.

First, there are lengthy and uncertain procedures to obtain necessary permits.
There are various permits / licenses / approvals to be obtained from various government authorities on incorporation of the company, land ownership and plantation operational licensing.
Investors, including farmers and smallholders may need a quite lengthy and costly process to obtain complete licenses. Therefore, many companies and individual investors have been opting for acquiring local plantation companies or concessions to avoid the lengthy process, assuming the locals have already obtained the licenses.

Second, there's governance challenges.
The palm oil industry regulatory environment has been government-heavy with more revoking power and less dispute resolution. The regulatory regime gives government officials unprecedented power to revoke licenses, even for some trivial and unintentional ones.
We have no system in place for typical notification, remedy, and appeal procedures. Therefore, palm oil companies and smallholders are reluctant to be seen as “activist companies”, actively voicing their complaints on unfair treatment. This is the role that should be taken over by the industry association, to avoid any repercussion towards a single company that files complaints.

Third, since May 2011, the President has imposed forest moratoriums.
This means no licenses can be granted for about 64.2 million hectares for two years. GAPKI needs to work with the Forestry Ministry to gain clarity on potential development areas outside designated no-go areas for oil palm plantation developments.

Fourth, foreign-based environment NGOs continue to unfairly discriminate against the palm oil industry.
There’s been no substantial campaign supported by the government to counterattack the negative campaigns, like Malaysian government does for their industry.

Fifth, there is a limited supply of high quality seeds from the government’s institutions.
Once again, our neighbor Malaysia provides more encouraging examples.

Sixth, when the companies face conflicts with local communities, the government’s help is limited. Plantation companies usually have to fend for themselves.
GAPKI needs to work with relevant government agencies formulate a new rule of engagement in dispute resolutions.

The challenge for GAPKI is to establish a framework for responsible political lobbying. It needs to rethink engagement practices that foster more cohesive public policy-making, such as igniting public debate to influence decision makers, so as to prevent unnecessary and unfair regulatory environment.

Lobbying should seek to affect public policy by providing key stakeholders, notably policymakers, with options in the policy-making process. GAPKI also needs to open and extend dialogue beyond the executive arm of government or legislators to civil society organisations and open a new chapter of relationships.

GAPKI needs to work together with relevant parties and prove that lobbying can be a legitimate and valuable part of citizens’ rights in our democracy.

Lastly, GAPKI needs to spearhead efforts to create a comprehensive and visionary blueprint for the development of sustainable palm oil in Indonesia. It needs to engage with all stakeholders, particularly multi-government agencies, the private sector as well as civil society.

It is imperative for GAPKI to build resilience against internal challenges and external threats. It needs to proactively influence government policy-making that is supportive of the palm oil industry via responsible lobbying.

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