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Impact of palm oil sustainability certification on village well-being and poverty in Indonesia

Abstract

The Roundtable on Sustainable Palm Oil has emerged as the leading sustainability certification system to tackle socioenvironmental issues associated with the oil palm industry. However, the effectiveness of certification by the Roundtable on Sustainable Palm Oil in achieving its socioeconomic objectives remains uncertain. We evaluate the impact of certification on village-level well-being across Indonesia by applying counterfactual analysis to multidimensional government poverty data. We compare poverty across 36,311 villages between 2000 and 2018, tracking changes from before oil palm plantations were first established to several years after plantations were certified. Certification was associated with reduced poverty in villages with primarily market-based livelihoods, but not in those in which subsistence livelihoods were dominant before switching to oil palm. We highlight the importance of baseline village livelihood systems in shaping local impacts of agricultural certification and assert that oil palm certification in certain village contexts may require additional resources to ensure socioeconomic objectives are realized.

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Fig. 1: Change in distribution of forest and oil palm plantations in Sumatra, Kalimantan and Papua.
Fig. 2: Village land-use (and associated livelihood) pathways to oil palm certification.
Fig. 3: Village primary livelihoods and ethnic features or identities by village primary land use.
Fig. 4: Village land-use (and the associated livelihood) change matrix to oil palm plantation and certification.
Fig. 5: Impact of oil palm plantation development and certification on well-being in oil palm-growing villages.
Fig. 6: Trends in the change of village well-being through the oil palm and certification processes.

Data availability

Key datasets used to conduct our analysis are publicly available from the cited references (forest cover data available from https://glad.umd.edu/dataset/primary-forest-cover-loss-indonesia-2000-2012 and https://earthenginepartners.appspot.com/science-2013-global-forest/download_v1.5.html and socioeconomic data from https://mikrodata.bps.go.id/mikrodata/index.php/catalog/PODES). Source data are provided with this paper.

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Acknowledgements

We thank the Roundtable on Sustainable Palm Oil for sharing concession data. This study was supported by the Arcus Foundation, the Australian Research Council Centre of Excellence for Environmental Decisions Discovery programme, the Darwin Initiative and University of Kent Global Challenges Impact Fund. M.J.S. was supported by a Leverhulme Trust Research Leadership Award. K.M.C. acknowledges funding from the NASA New (Early Career) Investigator Program in Earth Science (NNX16AI20G) and the US Department of Agriculture’s National Institute of Food and Agriculture, including Hatch Project HAW01136-H and McIntire Stennis Project HAW01146-M, managed by the College of Tropical Agriculture and Human Resources. F.A.V.S.J. has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 grant agreement No. 755956 (CONHUB).

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Authors

Contributions

T.S., M.J.S., E.M. and K.A.W. conceived the idea. T.S. designed the study, processed the socioeconomic and environmental data and performed the analyses. M.J.S. coordinated the project and obtained funding with E.M. and K.A.W. K.M.C. and H.G. provided the concessions data. E.A.L., F.A.V.S.J., C.L.M. and M.A. assisted with the socioeconomic and environmental datasets. T.S. and M.J.S. led the manuscript, which was critically reviewed and edited by the other authors. All authors contributed to the interpretation of analyses and gave final approval for publication.

Corresponding author

Correspondence to Matthew J. Struebig.

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The authors declare no competing interests.

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Extended data

Extended Data Fig. 1 Total plantation area for key agricultural commodities across Indonesia and types of ownerships.

(a) Bar chart representing the total plantation area in 2019 for key agricultural commodities across Indonesia, and pie chart (above the bar) representing the proportion of different type of producer for each commodity, including smallholders, state or public-run companies, and private companies. (b) The change in cultivation area of the top five commodities (oil palm, rubber, coconut, cocoa, and coffee) every five years between 1980 and 2019, by producer type. Data were obtained from the Directorate General of Estate Crops Indonesia (2019).

Source data

Extended Data Fig. 2 Detailed change in distribution of forest and oil palm plantations in Sumatra.

Detailed change in the distribution of natural forest and oil palm plantations every 9 years between 2000 and 2018 in three major oil palm regions in Sumatra. Oil palm plantations are grouped into three categories: (1) RSPO-certified plantations (CERT), (2) non-certified plantations within oil palm concessions (CONC), and (3) non-certified plantations outside known oil palm concessions (NCONC).

Extended Data Fig. 3 Detailed change in distribution of forest and oil palm plantations in Kalimantan.

Detailed change in the distribution of natural forest and oil palm plantations every 9 years between 2000 and 2018 in four oil palm regions in Kalimantan. Oil palm plantations are grouped into three categories: (1) RSPO-certified plantations (CERT), (2) non-certified plantations within oil palm concessions (CONC), and (3) non-certified plantations outside known oil palm concessions (NCONC).

Extended Data Fig. 4 Detailed change in distribution of forest and oil palm plantations in Papua.

Detailed change in the distribution of natural forest and oil palm plantations every 9 years between 2000 and 2018 in three oil palm regions in Papua. Oil palm plantations are grouped into three categories: (1) RSPO-certified plantations (CERT), (2) non-certified plantations within oil palm concessions (CONC), and (3) non-certified plantations outside known oil palm concessions (NCONC).

Extended Data Fig. 5 Latent and observed change in village primary land use (and the associated livelihoods) to oil palm certification.

(a) Latent change in village primary land use (and the associated livelihoods), from high natural forest cover, to agricultural lands, mixed plantations and shrubs, followed by industrial oil palm plantations (non-certified), then finally becoming RSPO-certified industrial plantations. (b) Observed change in village primary land use (and the associated livelihoods) to industrial oil palm plantations and certification based on land cover data and PODES censuses 2000, 2005, 2011, and 2018 (see Methods), aggregated across Sumatra, Kalimantan, and Papua. Percentage on the right hand side of each row represents the proportion of villages with the associated transition between 2000 and 2018.

Extended Data Fig. 6 Impacts of RSPO-certification on indicators of well-being by village primary livelihoods.

The impact of oil palm certification (transition from oil palm villages to certified plantation villages) on each indicator of well-being in villages with primary livelihoods: (a) subsistence production, and (b) market-based. Indicators of well-being were grouped to socioeconomic and socioecological dimensions. Socioeconomic indicators include housing conditions (POOR), access to electricity (ELCT), cooking fuel (COOK), and toilet facilities (TOLT), child malnutrition incidence (MLNT), distance to healthcare facility (HEAL), primary school (PSCH), and secondary school (SSCH), and access to cooperative scheme (COOP) and credit facilities (CRDT). Socioecological indicators include the prevalence of conflicts (CNFL), agricultural labourers (AGLB), small industries (SIND), suicide rates (SUIC), voluntary cleaning and maintenance (GTRY), water pollution (WPOL), air pollution (APOL), and floods and landslides (FLOD). Results were derived across 3 time periods and two islands (Sumatra and Kalimantan). N represents the number of villages used to derive the impact estimates for each well-being indicator. Error bars represent 95% confidence intervals. See Supplementary Table 1 for description of each well-being indicator.

Source data

Extended Data Fig. 7 Impacts of industrial oil palm plantation development on indicators of well-being by village primary livelihoods.

7The impact of industrial oil palm plantation development (transition from non oil palm villages to oil palm villages) on each indicator of well-being in villages with primary livelihoods: (a) subsistence production, and (b) market-based. Indicators of well-being were grouped to socioeconomic and socioecological dimensions. . Socioeconomic indicators include housing conditions (POOR), access to electricity (ELCT), cooking fuel (COOK), and toilet facilities (TOLT), child malnutrition incidence (MLNT), distance to healthcare facility (HEAL), primary school (PSCH), and secondary school (SSCH), and access to cooperative scheme (COOP) and credit facilities (CRDT). Socioecological indicators include the prevalence of conflicts (CNFL), agricultural labourers (AGLB), small industries (SIND), suicide rates (SUIC), voluntary cleaning and maintenance (GTRY), water pollution (WPOL), air pollution (APOL), and floods and landslides (FLOD). Results were derived across 11 time periods and three islands (Sumatra, Kalimantan, and Papua). N represents the number of villages used to derive the impact estimates for each well-being indicator. Error bars represent 95% confidence intervals. See Supplementary Table 1 for description of each well-being indicator.

Source data

Extended Data Fig. 8 Impact of oil palm plantation development and certification on well-being in oil palm growing villages by island.

(a) Impact of oil palm plantations on village well-being in Sumatra, Kalimantan, and Papua, evaluated by comparing the change in well-being indicators in villages 5-11 years after industrial oil palm plantation development against the change in well-being in villages without industrial oil palm plantation, while ensuring similar baseline characteristics in both types of villages. (b) Impact of RSPO certification on village well-being in Sumatra and Kalimantan, evaluated by comparing the change in well-being indicators in villages 5-11 years after certification against the change in well-being in villages with non-certified industrial oil palm plantations, while ensuring similar baseline characteristics in both types of villages. N represents the number of villages assessed in each panel. Error bars represent 95% confidence intervals.

Source data

Extended Data Fig. 9 Size of individual industrial oil palm plantation and number of villages covered by one plantation, by certification status.

(a) Size of each large-scale plantation by certification status in the islands of Sumatra, Kalimantan, and Papua. (b) Number of villages covered by each large-scale industrial plantation and the proportion of village land area allocated to each plantation, by certification status. Plantation certification status includes (1) RSPO-certified plantations, that is certified large-scale industrial plantations (CERT) and (2) non-certified plantations within oil palm concession boundaries, that is non-certified large-scale industrial plantations (CONC).

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Supplementary information

Supplementary Information

Supplementary Methods, Tables 1–8, Figs. 1–13 and references.

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Source Data Extended Data Fig. 1

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Source Data Extended Data Fig. 9

Data used to generate graphs in Extended Data Fig. 9.

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Santika, T., Wilson, K.A., Law, E.A. et al. Impact of palm oil sustainability certification on village well-being and poverty in Indonesia. Nat Sustain 4, 109–119 (2021). https://doi.org/10.1038/s41893-020-00630-1

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