July 9, 2018

Peat agency signs MoU with RSPO, deprioritizing ISPO

( - In a public statement made in mid-November last year, President Joko Widodo firmly declared that Indonesia understands the importance of sustainability issues in the palm oil sector, as demonstrated by a number of sustainability-related policies that have been undertaken, including the enforcement of Indonesian Sustainable Palm Oil (ISPO) certification.

Despite this, the Indonesian Peat Restoration Agency (BRG) signed an MoU with the Roundtable on Sustainable Palm Oil (RSPO) (May 21) in a move that undermines the President's directive. In doing this, the peat agency has neglected what should be its priority, the ISPO. 

When asked about the agency's action in contradiction to the line set out by the President (Jul 7), Peat Agency Chief Nazir Foead confirmed that "the MoU with the RSPO is being reviewed".

“On Tuesday afternoon (Jul 10), a decision will be made concerning the status of the MoU,” he explained. 

No consultation or coordination

Meanwhile, upon receiving confirmation of the peat agency-RSPO MoU signing, Environment and Forestry Minister Siti Nurbaya expressed surprise (Jul 7), given that the peat agency did not consult or coordinate with her or the ministry on this matter.

“As per the President's directive, strengthening and enforcement of the ISPO should be prioritized, including ongoing improvements to peat governance efforts involving the palm oil sector,” the minister emphasized.

As it turns out, information obtained by (Jul 7) confirms that the signing of the peat agency-RSPO MoU did not involve the Coordinating Ministry for the Economy either.

The peat agency’s MoU with the RSPO is even more controversial considering that certain RSPO members were implicated in peat violations prior to its signing. 

For example, a palm oil company (PT BSG) controlled by an RSPO member (PT SSMS) cleared and drained areas targeted by the peat agency for restoration, as seen in the photos below. The peat agency-RSPO MoU emerged after this peat violation was exposed.

Palm oil concessions operating in the peat ecosystem, RSPO members amongst them, are currently required to implement peat recovery measures as part of strict legal compliance.

President Joko Widodo signed a revised government regulation in early December 2016 banning any new peat development which causes peat drainage. This also obliged companies to undertake peat recovery in existing concessions, including those in the palm oil sector. 

This was subsequently followed by the issuance of a set of new ministerial peat regulations from the Environment and Forestry Minister in late February last year, including a peat ecosystem map.

The facts show, however, that while 170 palm oil companies have already had their peat recovery documents approved by the Environment and Forestry Ministry (with another 30 approvals imminent), there are still some palm oil companies owned by RSPO members that have yet to submit peat recovery documents to the ministry for approval.

A spatial analysis and ground-check performed by the team confirmed that a lot of the peat drainage involved in the development of palm oil plantations in Indonesia was for years allowed through the RSPO mechanism.