Get to Know Presidential Regulation 44/2020 Concerning ISPO
The palm oil industry and its products have become one of the agricultural sectors and products that often experience negative campaigns related to environmental and social issues so that it is considered to be an unsustainable sector. The rise of the campaign has led global consumers to demand aspects of sustainability (economic, social and environmental) in the management of oil palm cultivation to produce palm oil-based products. The issue of sustainability has also been used by developed countries such as the European Union and the United States as a requirement for importing palm oil and its derivative products into the country.
In the history of global agriculture, only palm oil that has been questioned about its sustainability issues and even required to have certification that indicates that its cultivation process has met sustainability indicators, while other vegetable oils are not required to fulfill. Although it appears to discriminate against palm oil, but to accommodate the demands of global consumers and importing countries, various palm oil sustainability certification systems have been formed such as the Roundtable Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Palm Oil (MSPO).
The ISPO certification was formed by the Indonesian Government through the Ministry of Agriculture in 2009, not intending to replace/compete with the RSPO which had been initiated by companies/industries in the palm oil sector and downstream products, NGOs and academics at the global level. ISPO is a national standard in oil palm cultivation that initially aims to reduce the negative accusations from the international world while reducing the impact of environmental damage, greenhouse gas emissions and deforestation.
The legal basis for the ISPO is Minister of Agriculture Regulation No. 19/2011 which subsequently undergoes changes and is replaced by Minister of Agriculture Regulation No. 11/2015. In Minister of Agriculture Regulation 11/2015, ISPO certification is mandatory for oil palm companies. Meanwhile, ISPO certification also applies voluntary to independent and plasma oil palm smallholders farmers and also plantation companies that produce palm oil for renewable energy.
The celebration of the 11th anniversary of ISPO in 2020, was also marked by the issuance of Presidential Regulation No. 44/2020 concerning the Indonesian Sustainable Palm Oil Plantation Certification System. This Presidential Regulation concerning ISPO does not revise or replace Minister of Agriculture Regulation 11/2015, as long as the regulations in the Minister of Agriculture Regulation do not conflict with the provisions in the Presidential Regulation (article 28). This regulation was also made to complement the regulations regarding the existing palm oil sustainability certification system in the context of strengthening ISPO. This can be seen from the objectives of implementing the ISPO certification system which has more comprehensive (article 3), namely: (a) ensuring and improving the management and development of oil palm plantations in accordance with ISPO principles and criteria; (b) increase the acceptance and competitiveness of Indonesian oil palm plantations in national and international markets; and (c) increasing efforts to accelerate the reduction of greenhouse gas emissions.
In the Presidential Regulation, there is also a definition of ISPO certification, which is a series of conformity assessment activities for the oil palm plantation business that is related to the provision of written guarantees that the oil palm products and/or governance have met the ISPO principles and criteria. Article 4 also mentions ISPO principles that have differences compared to the previous ISPO Ministry of Agriculture, while the seven principles include: (1) Compliance with Laws and Regulations; (2) Application of Good Plantation Practices; (3) Management of the Environment, Natural Resources and Biodiversity; (4) Employment Responsibilities; (5) Social Responsibility and Community Economic Empowerment; (6) Implementation of Transparency; and (7) Sustainable Business Improvement.
The issuance of the ISPO Presidential Regulation also reflects that the sustainable development of the palm oil industry is the responsibility and focus of the government. Unlike the ISPO Commission (in the Ministry of Agriculture) which is chaired by the Director General of Plantations at the Ministry of Agriculture and assisted by the ISPO Secretariat, the ISPO Committee (in Presidential Regulation) involves several related ministries/institutions (ex officio), which means the responsibility of organizing ISPO no longer the responsibility of one ministry/sector. The Steering Committee of the ISPO Committee is chaired by the Minister from Coordinating Minister for the Economy Affairs, and the Minister of Agriculture as a daily chairperson, with members from the Minister of Environment adn Forest, the Minister of Agrarian and Spatial Planning, the Minister of Trade, the Minister of Industry, the Minister of Home Affairs and the Head of the National Standardization Agency (BSN) / National Accreditation Committee (KAN). With the formation of the ISPO Committee, it is expected to be able to solve the problems that have been obstacles in the realization of ISPO, related to various government regulations that lock each other and overlap. In addition to ministries and government institutions, the ISPO Committee also consists of associations, academics and independent observers.
Another difference that is quite fundamental in the rules of Ministry of Agriculture Regulation 11/2015 and Presidential Regulation 44/2020 is that the ISPO obligation applies not only to oil palm plantation companies (cultivation, processing and integration), but smallholders (independent and plasma) are also required to have ISPO certification. To apply for ISPO certification, smallholders must attach a Plantation Registration Certificate (or Surat Tanda Daftar Perkebunan/STDB) and land rights. The ISPO mandatory for oil palm smallholders farmers is valid for 5 years from the issuance of this regulation. And if the business actor violates the mandatory provisions of the ISPO, administrative sanctions will be imposed including written warnings, fines and even suspension from oil palm plantations.
Oil palm farmers also get funding assistance to facilitate ownership of ISPO. The source of these funds comes from the APBN, APBD and/or other legal sources. One of the sources of ISPO certification funds can come from palm export levies managed by BPDPKS. Based on Decree of the Director General of Plantations No.144/Kpts/OT.05/4/2020 concerning Technical Guidelines for Palm Oil Plantation Facilities and Infrastructure in the Funding Framework for the Palm Oil Plantation Fund Management Board, explaining there is a technical verification process and several requirements related to disbursement of ISPO funds. One of the requirements is the incorporation of Farmer Groups/cooperatives or other economic institutions of farmers who have legality and legal status or are registered with the relevant authority.
In addition, referring to Presidential Regulation 44/2020 which states that ISPO certification can be given directly by ISPO Certification Institute without going through ISPO Committee approval. The ISPO Certification Institute must be accredited by the National Accreditation Committee/KAN and fulfill the requirements of SNI ISO/IEC 10706: 2012. This aims to ensure independence in the assessment of plantation sustainability and reduce government intervention in the process of assessing and issuing certificates. In addition to accrediting LS, the active involvement and support of KAN and BSN in the ISPO Committee is also expected to be able to increase the confidence and acceptance of the ISPO certification system on oil palm cultivation and products both in national and global markets.
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