Today's topic would be: Business Engagement in Green Activism: is it Fair or Inappropriate?
Rising global environmental awareness has brought about a new trend in
Indonesia on environmental activism among the government and business
players alike.
The country has become a playing ground for
environmental activism and has seen significant influence by the Civil
Society Organization (CSO) in advocating nature conservation and
environmental stewardships in all development sectors.
Currently,
there is a new trend of environmental activism by the government and
businesses, which are both competing to win international recognition as
environmental champions.
While the effort is worthwhile,
skeptics argue that environmental activism by the government is
inappropriate as it compromises its role as facilitator and regulator of
the industry.
Furthermore, the engagement of businesses in
environmental activism is often considered to be a means to greenwash
and violate fair business principles. Business activism is often marked
by the introduction of a set of unilateral terms and conditions that may
be deemed as self-defined protectionism.
The palm oil industry
experiences competing environmental activism between the government and
businesses. The introduction of Indonesian Sustainable Palm Oil (ISPO)
and a moratorium on oil palm plantation and mining development are
evidence of the government’s activism to safeguard its credentials in
the international community.
Despite it being mandatory in
nature, businesses are not enthusiastic about advocating it due to the
absence of incentives and lack of market acceptance.
Some
progressive palm oil companies have jumped on the bandwagon of
environmental activism facilitated by the Indonesian Chamber of Commerce
and Industry (Kadin) in a forum called the Indonesian Palm Oil Pledge
(IPOP) in 2014.
The IPOP reflects the environmental activism of
business players, where a group of six palm oil conglomerates made a
common pledge on environmental stewardships in the palm oil industry.
While
the rationale and objectives of government environmental activism is
rather straight forward in dealing with criticism of the country’s
environmental record, the motives and aims of business activism are
rather controversial.
There are three possible motives and
intentions in business engagement in environmental activism. The first
is purely a case of a business to obtain green credentials for palm oil
products to access a niche market with a premium.
The second is
to prevent a tarnished reputation and to pacify palm oil watchdogs. The
third is suspected greenwashing by deliberately omitting and making
peace with past issues and problems for the sake of commitment to future
undertakings.
The issue of greenwashing, which betrays fair
business principles, emerged when the internal system and procedure of
the activism forum, i.e. IPOP, failed to address four key aspects,
namely eligibility, transparency, fair business and motives of committed
members.
The forum is set to be the paragon of environmentally
conscious companies and it therefore needs to set a criteria of
eligibility for companies to join as members. Only conflict-free,
committed companies that have cleared up past issues and committed to
the future should be eligible for membership.
On transparency,
the forum has to develop a mechanism to enable the public to gain full
access to information on the implementation of commitment by member
companies. It would facilitate companies in disclosing past records,
current operations and plans that would allow public scrutiny.
The
government has also demonstrated resentment to the initiative as it is
likely to breach fair business conduct because it could potentially
alienate smallholders and partner companies in their value chains. Other
concerns include the signatories’ commitment to effectively stop new
oil palm plantation development due to a number of restrictions, which
contravenes government policy.
One of the challenges of
government and business engagement in environmental activism is the need
for a platform that is recognized by both member companies and
stakeholders, particularly the market, CSOs and value chains.
Unlike
the Roundtable on Sustainable Palm Oil (RSPO) where fully committed
members and certified sustainable palm oil (CSPO) products are eligible
for incentives, the IPOP has neither developed a scheme for incentives
for committed members nor sanctions for non-committal ones.
The
ISPO is a form of government activism by legally enforcing
sustainability standards as a mandatory certification scheme, and
noncompliance will be penalized. Meanwhile, the platform of IPOP has not
been acknowledged by the market or the government.
A platform
for environmental activism in the Indonesian palm oil sector could be
shaped into integrated ISPO standards with add-on requirements from any
business forum or initiatives, including the IPOP. The ISPO with add-on
commitment from business activism could be named ISPO Plus, and be
expected to meet market demand for stringent environmental and social
standards.
Such converged standards must be developed through an
inclusive and transparent process, engaging CSOs, supply chains and
smallholders, which would provide an avenue for businesses to showcase
their environmental commitment without the baggage of greenwashing and
protectionism.
Under such a comprehensive and inclusive
platform, environmental activism would correspond with and be integrated
into fair business practices.
The new incentivized market for
ISPO Plus could be created with market endorsement, which would provide
both added value to palm oil products both with a premium price and
reputational credentials.
Inevitably, it would create a two-tier
market for ISPO and incentivized ISPO Plus. This is similar to RSPO,
with RSPO Next as the add on to RSPO standards. Better yet, the ISPO
Plus would have the luxury of government recognition, something RSPO
does not have.
The introduction of multi-layer standards for
multi-tier markets demonstrate a new commitment of environmental
activism that align with or are integrated in fair business principles
by providing a level playing field and equal footing for all relevant
players under non-discriminatory market access.
__________________________________
The writer is the vice president of the Roundtable on Sustainable Palm Oil (RSPO). The views expressed are his own.
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