Does certifying oil palm help alleviate poverty? Lessons from RSPO in Indonesia

Oil palm agriculture is promoted as a way to improve living standards in tropical countries, but has led to mixed outcomes for local communities. We evaluated impacts across Indonesia, and asked whether poverty had been improved via the leading sustainability certfication scheme.
Does certifying oil palm help alleviate poverty? 
Lessons from RSPO in Indonesia

This post was prepared jointly by Truly Santika, Erik Meijaard and Matthew Struebig.

The paper in Nature Sustainability is here:

Main photo credit:

As the World's most commonly produced vegetable oil, palm oil has attracted its fair share of controversy. Oil palm can be a major source of employment and revenue, but negative impacts are also well-publicised. The Roundtable on Sustainable Palm Oil (RSPO) has emerged as the leading sustainability certification system to tackle these issues, but its effectiveness remains uncertain. By tracking changes in well-being across >36,000 villages in Indonesia - the world's largest palm oil producer - we provide valuable insights into what works well for communities neighbouring plantations, and what can be improved.

Counterfactual analyses were undertaken for Sumatra, Kalimantan and Papua.

Our counterfactual analyses, based on multiple indicators of well-being reported within Indonesia's national census data, can tell us what happened in villages with oil palm compared to those without. Previously, we showed that in Kalimantan (Indonesian Borneo) the expansion of the oil palm industry since 2000 had both positive and negative impacts on village well-being. The key drivers were the livelihood systems of the village, and how intact their forest was to begin with.

Oil palm in Kutai Kertanegara in East Kalimantan. Nanang Sujana/

Villages familiar with large-scale farming were primed for the market economy, and experienced substantial improvements in many measures of well-being, but suffered environmental and social costs. Those still reliant on subsistence livelihoods experienced much starker negative impacts across all 18 indicators, not least because they were still somewhat dependent on forest.

The transition of forest to oil palm and certification in terms of livelihoods and community composition in Indonesia (from Santika et al. 2020, Fig 2)

Naturally, we were interested to see if this pattern occurred elsewhere in Indonesia, which has vast oil palm estates in Sumatra, and more recently developed plantations in Papua. The release of new census data in 2018 also allowed us to assess changes following RSPO certification - in many instances tracking changes in well-being from before oil palm plantations were first established to several years after certification.

The livelihood patterns we uncovered for Kalimantan were broadly applicable across the three islands: Communities that were already earning their living through market-based strategies experienced socio-economic benefits when nearby plantations became certified. Those on the forest edge, however, with livelihoods that were much more dependent on income from forests, saw continued poverty after plantations were certified.

On average and compared to non-certified villages, combined measures of well-being declined by 11% in communities that previously relied on forests before certification. Yet in villages with established market-based livelihoods a further drop in socio-ecological aspects of well-being was offset by socio-economic gains from certification.

Impact of oil palm plantation development and certification on well-being in oil palm growing villages by island. Impact was compared to the counterfactual of either no oil palm, or no certification. Note there are insufficient numbers of certified plantations in Papua to assess impact there (from Santika et al. 2020. Extended Data Fig 8).

Because of the different stages of oil palm development, the well-being outcomes play out differently across Indonesia. In Sumatra, oil palm certification had an overall positive impact on village well-being, because most communities already had market-based livelihoods. Kalimantan on the other hand saw well-being continue to decline, primarily because socio-ecological conditions worsened. The analysis demonstrates that oil palm development and certification can have quite different outcomes in different places.

Our research also reveals that the timing of certification matters. Improvements to well-being were more prominent after plantations had been certified for several years. It therefore takes time for the potential benefits of oil palm and certification to be experienced and reported by local communities.

Our work also shows where benefits to well-being have yet to materialise, serving as an early warning to the oil palm industry of where and how improvements can be made. As RSPO and other certification systems continue to develop their standards, our assessment across Indonesia reveals some of the ways this can be achieved.

A villager transports oil palm fruits from a plantation in Jambi, Sumatra. Iddy Farmer/

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