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Senin, 22 Juli 2013

Oil palm plantations : Environmental lame duck and scapegoat

Oil palm plantations :
Environmental lame duck and scapegoat
Edi Suhardi  ;   Vice President II, Roundtable on Sustainable Palm Oil (RSPO)
JAKARTA POST, 16 Juli 2013


The palm oil industry has been blamed for the recent Sumatra land and forest fires that caused transborder haze pollution in Singapore and Malaysia. The governments of Singapore and Malaysia urged Indonesia to take measures to address the fires, while President Susilo Bambang Yudhoyono apologized for the haze saga.

Under uncertain circumstances, the public rushed to point their fingers at the perpetrators of the fires and haze. In no time, most stakeholders, including government agencies and civil society, alleged oil palm plantation firms were the environmental villain.

Indeed, the slash-and-burn practice is the sole cause of the high intensity, smoky haze that blanketed the neighboring countries. However, few are interested in understanding the true nature of the causes of such a catastrophic incident.

There are at least three lessons from this disaster: problems with governance caused a simple problem to develop into a complicated predicament; smear campaigns against oil palm plantations; and the need to look at down-to-earth fundamentals of environmentalism rather than going after high-flying targets.

First, our governance is marred with red tape. The haze saga is easy to assess due to the availability of real-time data in the form of detailed satellite maps. Several days after the haze blanketed Singapore and Kuala Lumpur, the World Resources Institute (WRI), reported that more than half of the hot spots occurred on land with active permits for large-scale operations.

There were several sources of fires, 48 percent of which originated outside forest areas or oil palm plantations. The data showed that 27 percent of the fires emanated from timber plantations, 4 percent in protected areas, 1 percent in logging areas and only 20 percent from oil palm concession areas.

There are three government institutions responsible for maps and concessions: the Agriculture Ministry for oil palm plantations, the Forestry Ministry for industrial forest concessions and local governments for land-use concession permits.

Therefore, theoretically and technically it is very easy to pinpoint and track down who should be held accountable for the fires and haze. The government only needs to overlay the satellite images and compare them with the three concession maps.

We observed that about a week after Jakarta mobilized resources to tackle the fires, the haze almost disappeared. At the same time, dozens of individuals, mostly farmers and contract workers, were arrested by the police for alleged arson.

Red tape, however, also prevented immediate action to mitigate the disaster. Only after the President apologized to Singapore and Malaysia were the resources deployed. On the other hand, tracking down the culprits proved to be far more difficult than the relatively simple task of locating the fire sources.

Second, there is the legacy of NGO-led smear campaigns against palm plantations. The bitter taste of this negative campaign still lingers, despite the fact that only one-fifth of the fires were actually located within oil palm plantations. However, many parties, without looking at the data, bluntly accused palm plantations of burning the forests.

Several parties continue to practice slash-and-burn methods for land clearing. On peat land, slash-and-burn practices are the cheapest and most beneficial short-term way to farm, as they neutralize the acid in the soil and add nutrients. It is far cheaper than clearing land using heavy equipment and buying fertilizers.

Therefore, the majority of farmers and smallholders, and even irresponsible plantation owners and their contractors, choose this option. Peat land is also prone to fire from natural causes, which are exacerbated during the dry season.

 Blaming palm oil as “the mother of all evils” among environmental issues is commonplace. The failure to curb deforestation and mitigate climate change needs a scapegoat that the majority will approve. Nonetheless, to do so disregards the fact that there are many oil palm plantations that are fully committed to standards of sustainability.
Third, we need to go back to basics in addressing environmental issues rather than trying to achieve advanced targets. When we look closely at environmental issues, there are huge gaps between perception and the facts, and between environmental campaigns and the actual events on the ground.

In general, global environmental campaign focuses on three areas: climate change associated with greenhouse gas (GHG) emissions, loss of biodiversity, and declining environmental services. Unfortunately, the palm oil industry has become an environmental scapegoat for the global environmental campaigners.

Indeed, oil palm plantations contribute to GHG emissions and other environmental concerns, but their collective impact is no more severe than fossil fuel combustion.

With regard to the recent fires and haze it is clear that according to data, the harm caused by oil palm plantations was far less harmful than other contributory factors.

In the past, timber companies were blamed for environmental degradation and now palm oil plantations are bearing the brunt of criticism. Due to the low level of trust in and credibility of palm plantations, the industry is unable to defend itself against all the charges.

We need to address these problems through a number of strategies.

First, we need to increase the credibility of oil palm plantations and the palm oil industry as a whole through the segregation and categorization of certified sustainable and committed companies. We need to make palm oil a flagship commodity in creating a green market and enforce sustainability principles to ensure production is environmentally and socially responsible.

Second, we need to distinguish between different products and different players in the palm oil industry to determine the good, the bad and the ugly. We need to “name and shame” those firms that are setting fires and causing environmental disasters. To be fair, oil palm plantation companies should be differentiated between those that are responsible and those that are not, between sustainable green companies and rogue companies.

Third, the environmental movement needs to address the fundamentals. Rather than talking big on high-level issues like GHGs, carbon emissions and climate change, it would be better to focus on addressing the root causes of high-impact, disastrous environmental issues.

The government and environmentalists need to redefine their priorities in environmental management toward concrete and down-to-earth measures, such as eradicating forest and land fires once and for all through the strict implementation of a no-burn policy, renewable energy saving and other tangible programs.

The time is ripe for the government to revisit its policies on population growth and birth control, resource management and governance as an integral part of environmental conservation and sustainability.  ●


Rabu, 10 April 2013

A question of shareholder responsibility


A question of shareholder responsibility
Edi Suhardi  ;   Vice President II of the Roundtable on Sustainable Palm Oil (RSPO)
JAKARTA POST, 04 April 2013
  

Another blow to the palm oil industry came on March 11 when JP Morgan Asia Pacific Equity Research revealed that the Norwegian Government Pension Fund Global (GPFG) had disposed of its stakes in 23 Asian palm oil companies in 2012, including several Indonesian companies committed to the sustainability movement.

The GPFG, the world’s largest sovereign wealth fund, was reported to have divested out its stakes, citing concerns about unsustainable palm oil production.

The divestments appeared to be a blanket sell-down of the sector without due consideration of company-specific plantation management practices. Some of the companies are publicly known to have progressively been adopting sustainability standards and certifications.

There is a notion that the GPFG’s decision may be driven by environmental pressure groups that singled out the palm oil industry as the cause of deforestation. Discriminating against an industry without due process is unwise in advocating for sustainability, and specifically in promoting good corporate governance and socially responsible
investments.

Fund managers and investors should be good owners, not just traders. Contrary to public beliefs that investors are only looking for profit in their shareholdings, there has been strong signs of shareholder activism in the wake of many corporate scandals since the 1990s. Even in the 1960s, many investors, through the corporate governance mechanism, actively involved and engaged in setting the company’s social and environmental policies.

There are three terms that have close links in shareholding practices: corporate governance, shareholder activism and socially responsible investment. Basically, shareholder activism is related to the make positive use of the rights of shareholders and to align the company with the shareholders’ interests, usually in terms of corporate governance, social and environmental goals.

While, socially responsible investment is the use of ethical, social and environmental criteria in the selection and management of investment portfolios, including more proactive practices such as shareholder activism.

Many fund managers and institutional investors believe that shareholder activism is instrumental in socially responsible investments. Whereas, screening companies to invest through either “negative” or “avoid” lists is no longer considered adequate under current corporate governance circumstances.
There are two options for investors, particularly big institutions such as pension funds, in exercising their roles in corporate governance practices, which are either to “voice” or “exit”. The “voice” means investors can actively shape up the direction of the company by sponsoring shareholders’ resolutions, nominating executives/committees, voting at Annual General Meetings (AGMs) to discuss the proposal, or seeking proxies from other big investors to force the company to adopt certain policies.

The second option is “exit”, to sell the shares and walk away, leaving negative publicity for the company’s shares, expecting that the threat of lower stock prices will force the company to adopt certain policies. However, there has been a general agreement that the investor must preferably adopt the “voice” option when time and resources permit, to meaningfully shape up the company’s direction.

Take the example of Rev. Sullivan, who was a prominent black civil rights activist in the US. Since the 1960s, he and his church groups had been actively investing in car manufacturer stocks, campaigning for companies to adopt shareholder proposals on the equal treatment of employees, regardless of their race.

As a result of the campaign, in 1971, Rev. Sullivan was invited to join the General Motors’ board of directors and became the first African-American on the board of a major corporation. He succeeded in introducing the equal employment policy in the car manufacturer. The policy was then formalized in 1977 as The Sullivan Principle, as a code of conduct for companies operating in Apartheid South Africa. The principle was instrumental in ending Apartheid in 1984.

How should we analyze the case of blanket divestment of the Norway GPFG?

First, we need to take note that the partnership and synergy are now becoming the underlying principles for any sustainability works. The government of Norway has signed a memorandum of understanding (MoU) with the government of Indonesia to support a program on Reducing Emissions from Deforestation and Forest Degradation (REDD). This is a good example of active engagement, collaboration and synergy between governments for advancing social and environmental goals.

Second, it seems that the Norway GPFG is intentionally overlooking the fact that one of the most advanced sustainability movements is happening in the palm oil industry. The RSPO (Roundtable on Sustainable Palm Oil) is an international multi-stakeholder organization and certification scheme of sustainable palm oil, founded by farmers and oil palm growers (Indonesia and Malaysia), mills, processing plants (including food producers), banks and NGOs (Oxfam, Conservation International, WWF and the Zoological Society of London).

If palm growers want their business units to be certified as sustainable palm oil producers, they must comply with the principles and criteria, which are audited by credible independent auditors.

With this collaborative process between companies and NGOs, the adoption of an RSPO certification scheme since it was introduced in 2009 is astonishing. About 15 percent (and increasing) of the palm oil produced is sustainability certified and rewarded with a premium price above the market.

JP Morgan stated that the Norway GPFG divestment appeared to be a blanket sell-down of the sector, without researching some companies publicly known to have progressively been adopting the sustainability certification.

There is an ethical question of how the Norway GPFG “exited” from companies that actively invested in the sustainability movement and were certified producers of sustainable palm oil producers. This is contrary to the government of Norway actively engaging itself in the sustainability arena.

The “exit” from shares of companies that are not producing RSPO-certified sustainable palm oil (CSPO) is understandable. But they also “exited” from sustainability-committed companies that abided by sustainability principles and criteria. This clearly shows that the Norway GPFG acts more like a trader than a good owner, which may hurt the sustainability movement.

Third, in terms of an active “voice” and a submissive “exit”, has the Norway GPFG exercised its legitimate rights as shareholder to “voice” its environmental concerns, instead of just walking away? I believe it can be meaningfully engaged in advancing sustainability goals by exercising its legitimate shareholder rights, such as actively preparing shareholders’ resolutions for company that holds the stock, to adopt the RSPO.

Norway can also actively nominate an executive or propose a sustainability committee that is responsible for the sustainability issue. Norway can also vote at an AGM to discuss its proposal, or dismiss executives that do not want to adopt the RSPO. And lastly, Norway can also seek proxies from other institutional investors to force companies to adopt the RSPO and its sustainability standards.

I strongly believe that any investors have an ethical shareholding responsibility to advance sustainability, with shareholders having the potential to exert their power and ownership rights to encourage companies they invest in to live up their roles as corporate citizens. We may see growing public scrutiny of how investors behave.

The public will expect more shareholder responsibility to engage with rather than to surrender and “exit” from the fight for the common global agenda of environmental stewardship and social justice.

Selasa, 09 April 2013

Negara, Bisnis, dan LSM


Negara, Bisnis, dan LSM
Edi Suhardi ;  Vice President II, Roundtable of Sustainable Palm Oil
KOMPAS, 09 April 2013


Laporan Human Rights Watch atas perlindungan kaum minoritas di Indonesia yang dipublikasikan pada 28 Februari 2013 disebut juru bicara Presiden sebagai laporan LSM bayaran. Padahal, HRW adalah salah satu LSM internasional berkredibilitas kuat.
Ini cukup mengherankan karena sejak tahun 2000-an secara umum hubungan kalangan bisnis, pemerintah, dan organisasi masyarakat sipil (nama lain dari LSM) mulai membaik. Dahulu, hubungan bersifat konfrontatif, sekarang menjadi dialog setara dan membangun. Salah satu contoh yang baik adalah program mitigasi iklim dan REDD+ yang melibatkan banyak aktivis LSM dan akademisi di bawah koordinasi Unit Kerja Presiden Bidang Pengawasan dan Pengendalian Pembangunan (UKP4).
Contoh lain yang fenomenal adalah berubahnya pola hubungan salah satu industri terbesar di Indonesia, Asia Pulp & Paper (APP), dengan Greenpeace. Permusuhan tiga tahun berakhir menjadi kemitraan pada awal Februari 2013.
Sebelumnya, siapa yang berani membayangkan hal ini akan terjadi? Ini karena yang terpatri dalam pikiran kita adalah LSM itu selalu berseteru dengan industri dan pemerintah, padahal dalam sejarah gerakan masyarakat sipil di Indonesia, LSM juga sering bersekutu bersama pemerintah ataupun swasta.
Adi Culla (2009) yang meneliti gerakan masyarakat sipil era Orde Baru dengan studi kasus YLBHI (bantuan hukum), Walhi (lingkungan hidup), dan YLKI (hak konsumen) menemukan bahwa aktivis LSM memahami gerakan masyarakat sipil dengan konsep Barat. Hal itu berarti organisasi non-pemerintah di luar domain negara, pasar, dan bisnis (economic society). LSM adalah entitas sosial tersendiri, berciri kemandirian, keswadayaan (self-supporting), dan keswasembadaan (self-generating). Dengan demikian, pola hubungannya dengan negara (serta bisnis) lebih dikotomis dan seteru.
Kenyataan Berbeda
Meski demikian, pemahaman ternyata berbeda dengan kenyataan. Pada riset tersebut, diketahui tiga LSM terkemuka di atas pendiriannya melibatkan inisiatif dan akomodasi aktor-aktor negara. Walhi, misalnya, pendiriannya difasilitasi antara lain oleh Menteri Lingkungan Hidup Emil Salim, Gubernur DKI Jakarta Tjokropranolo, dan bahkan pengurus pertamanya diterima langsung oleh Presiden Soeharto.
Pendirian LBH Jakarta difasilitasi antara lain oleh Gubernur DKI Jakarta Ali Sadikin. Kemudian, Gubernur DKI Jakarta Fauzi Bowo melalui APBD mendirikan gedung LBH. Saat ini, Kementerian Hukum dan HAM sedang memverifikasi LBH di Indonesia yang bisa mendapatkan dana bantuan hukum dari APBN berdasarkan UU No 16 Tahun 2011 tentang Bantuan Hukum.
Karena itu, Adi Culla mendefinisikan masyarakat sipil agak berbeda dengan pemikiran Barat: (1) Organisasi/kelompok yang dibentuk masyarakat ataupun bersama negara, serta (2) Wadah masyarakat yang terbentuk dan berkembang karena interaksinya dengan domain negara. Negara dapat berperan positif dalam pembentukan masyarakat sipil.
Bagaimana dengan APP dan Greenpeace? Selama tiga tahun, Greenpeace menuduh APP merusak lingkungan dan berkampanye agar internasional memboikot rantai suplai produk APP, yaitu kertas, mulai dari pembeli perusahaan, retailer, bank yang membiayai, investor pasar modal, dan konsumen rumah tangga.
Permusuhan ini berlangsung sampai 2012. Pada awal Februari 2013, APP menandatangani ”Kebijakan Konservasi Hutan” yang baru, dibantu Forest Trust Fund, suatu lembaga donor konservasi kehutanan yang juga menjadi donor Greenpeace.
Greenpeace Jerman juga pernah bekerja sama dengan sebuah perusahaan dalam memasarkan zat refrigeran ramah lingkungan ”GreenFreeze” untuk industri pendingin. Di sisi lain, mereka tetap berdemonstrasi di depan perusahaan-perusahaan besar yang dianggap ikut merusak lapisan ozon dengan memarkir truk besar berbaliho raksasa.
Kasus lain kerja sama dunia bisnis dengan LSM adalah Roundtable on Sustainable Palm Oil (RSPO), suatu organisasi multipihak internasional dan sertifikasi minyak sawit lestari. Organisasi ini didirikan petani dan perkebunan sawit (dari Indonesia dan Malaysia), pabrik, perusahaan pengolahan (termasuk produsen makanan), bank, dan LSM (Oxfam, Conservation International, WWF, dan Zoological Society of London). RSPO mempunyai prinsip dan kriteria komprehensif yang meliputi aspek hukum, lingkungan, sosial, dan bisnis yang disusun bersama.
Standar Baru
Sertifikasi RSPO menjadi standar baru industri kelapa sawit yang diakui baik oleh bisnis maupun LSM. Perusahaan yang ingin diakui proses produksi dan produknya ramah lingkungan harus mematuhi prinsip dan kriteria RSPO dan diaudit auditor independen. Bila lolos uji, industri mendapatkan sertifikat dan harga premium.
Karena itu, agak mengherankan melihat draf RUU Organisasi Masyarakat yang berparadigma mengontrol dan mengebiri kebebasan berorganisasi masyarakat, ditambah pernyataan juru bicara Istana yang tidak membuka dialog dan kolaborasi dengan LSM. Padahal, dunia bisnis dan sebagian elemen negara sudah memulai. Sebutlah sertifikasi ramah lingkungan RSPO, dialog kebijakan dan satgas khusus REDD+ di UKP4, sejumlah panitia seleksi komisi negara, dan sejumlah program CSR perusahaan yang bekerja sama dengan Pemprov Jakarta mengatasi hal banjir, relokasi masyarakat miskin, dan mengurai kemacetan.
Cukup sudah perseteruan antara LSM, negara, dan bisnis. Kita mengharapkan persekutuan untuk kebaikan kita bersama. ●