Transformative land investment: Trends in transnational governance

Key messages

  • Land governance standards, regulations and ‘food systems transformation’ have very different meanings across different actors, and different perceived roles – from facilitating large-scale land investments to preventing them.
  • The promise that voluntary standards would mobilize significant additional investment has not materialized.
  • Challenges with corporate self-regulation have led many, including some private sector actors, to push for mandatory regulation. However, this also comes with specific weaknesses and risks (e.g., bias towards those with the resources to comply); corporate disclosure has been inadequate to date.
  • Under the right political and contextual conditions, even what appear to be weak land governance instruments can provide opportunities for the poorest farmers to protect their land rights.
  • It is essential to understand and make explicit the different visions and assumptions regarding ‘development’ behind standards and initiatives, and their implementation pathways, in order to identify common ways forward.

Oil Palm Economic Benefit Distribution to Regions for Environmental Sustainability: Indonesia’s Revenue-Sharing Scheme

Palm oil is considered a key commodity in supporting the Indonesian economy, generating both domestic revenue and foreign exchange. Such revenue needs to be distributed equally for the benefit of the government and society. This paper discusses the opportunities and challenges of the proposed revenue-sharing scheme, DBH Sawit, sourcing from palm oil, particularly between central and local governments. It examines how the proposed scheme can be implemented and what strategies can reward regions for moving toward environmental sustainability practices. Research methods used in this paper include a literature study, stakeholder interviews, the SWOT method and analytical hierarchy processes. Results indicate that DBH Sawit is one of several fiscal instruments that could potentially incentivize sustainability. It has both strengths and anticipated opportunities, such as increased CPO production and global demand for palm oil. It faces, however, serious weaknesses, such as unauthorized oil palm plantations and the absence of traceability systems. It is also threatened by unfair market and global policies. This paper recommends diverse strategies to increase palm oil productivity, accelerate sustainability certification and develop a tracing system. To accelerate the adoption of environmental sustainability, the paper advocates an ecological-based fiscal transfer system.

Les impacts de l’APV-FLEGT: Synthèse des resultats dans sept pays

La présente étude constitue une synthèse des données qualitatives et quantitatives des impacts de l’accord de partenariat volontaire (APV) UE-FLEGT dans sept pays : le Cameroun, le Ghana, l’Indonésie, la République du Congo, la Côte d’Ivoire, le Guyana et le Honduras. Ces pays se situent à différents stades du processus APV, entre négociation, mise en oeuvre et obtention des licences FLEGT (Application des réglementations forestières, gouvernance et échanges commerciaux). L’examen de pays situés à ces différents stades offre la possibilité de tirer des enseignements à l’échelle globale dans diverses géographies et à différents moments.

Collecting evidence of FLEGT-VPA impacts: Global synthesis report

This study synthesizes qualitative and quantitative evidence of EU-FLEGT Voluntary Partnership Agreement (VPA) impacts across seven countries – Cameroon, Ghana, Indonesia, Republic of Congo, Côte d’Ivoire, Guyana and Honduras. These countries are at different stages of the VPA process – from negotiation to implementation to issuance of Forest Law Enforcement, Governance and Trade (FLEGT) licences. By studying countries at different stages, findings allow for global lessons to be learned across different geographies and time.

The agrarian, structural and cultural constraints of smallholders’ readiness for sustainability standards implementation: The case of Indonesian Sustainable Palm Oil in East Kalimantan

The expansion of oil palm plantation has caused adverse impacts on the ecosystem. It has been associated with deforestation, biodiversity loss, disturbances to environmental services and livelihood change. The government of Indonesia has made an effort to control the negative effects by issuing relevant policies. One of the policies is Indonesian Sustainable Palm Oil (ISPO)’s sustainability standards to which large-scale plantations and smallholders are obliged to adhere. This study assesses the readiness of two types of smallholders, namely, the nucleus–plasma scheme and independent smallholders to adopt ISPO standards. Using a case study research approach in two oil palm plantation villages in East Kalimantan, the study found out a number of ISPO implementation challenges, grouped into structural and socio-cultural challenges, which make smallholders less ready to adhere to this mandatory policy. Coping with these challenges, this study proposed that land and business legality programs be expedited to strengthen property rights, and that training and education programs be intensified to enhance awareness, knowledge and capacity of smallholders to enable them to comply with sustainability standards.

Transformation of coffee-growing landscapes across Latin America. A review

In Latin America, the cultivation of Arabica coffee (Coffea arabica) plays a critical role in rural livelihoods, biodiversity conservation, and sustainable development. Over the last 20 years, coffee farms and landscapes across the region have undergone rapid and profound biophysical changes in response to low coffee prices, changing climatic conditions, severe plant pathogen outbreaks, and other drivers. Although these biophysical transformations are pervasive and affect millions of rural livelihoods, there is limited information on the types, location, and extent of landscape changes and their socioeconomic and ecological consequences. Here we review the state of knowledge on the ongoing biophysical changes in coffee-growing regions, explore the potential socioeconomic and ecological impacts of these changes, and highlight key research gaps. We identify seven major land-use trends which are affecting the sustainability of coffee-growing regions across Latin America in different ways. These trends include (1) the widespread shift to disease-resistant cultivars, (2) the conventional intensification of coffee management with greater planting densities, greater use of agrochemicals and less shade, (3) the conversion of coffee to other agricultural land uses, (4) the introduction of Robusta coffee (Coffea canephora) into areas not previously cultivated with coffee, (5) the expansion of coffee into forested areas, (6) the urbanization of coffee landscapes, and (7) the increase in the area of coffee produced under voluntary sustainability standards. Our review highlights the incomplete and scattered information on the drivers, patterns, and outcomes of biophysical changes in coffee landscapes, and lays out a detailed research agenda to address these research gaps and elucidate the effects of different landscape trajectories on rural livelihoods, biodiversity conservation, and other aspects of sustainable development. A better understanding of the drivers, patterns, and consequences of changes in coffee landscapes is vital for informing the design of policies, programs, and incentives for sustainable coffee production.

Certification, good agricultural practice and smallholder heterogeneity: Differentiated pathways for resolving compliance gaps in the Indonesian oil palm sector

Enhancing smallholder compliance with sustainability standards and good agricultural practices features prominently on the global sustainability agenda. Operating in a sector that bears intense public scrutiny, Indonesia’s oil palm smallholders are especially confronted by pressures to enhance their environmental performance. Because smallholders experience differentiated compliance barriers however, it is widely recognized that for the purpose of more effectively prioritizing and targeting the necessary intervention support, smallholder heterogeneity needs to be better understood. This is especially the case for independent – in contrast to ‘plasma’ – oil palm smallholders, for whom corporate technical, input and financial support is comparatively inaccessible. Through multivariate analysis, this article contributes to these needs by developing a typology of independent oil palm smallholders in Indonesian Borneo. We subsequently model the predicted probabilities of different types of smallholders complying with Indonesia’s major national sustainability standard and select indicators of good agricultural practice. This analysis reveals structural compliance gaps, which threatens to restrict smallholder access to formal markets in future. In showing that intervention strategies to resolve these compliance gaps can be more impactful when these are adapted to smallholder livelihood assets, portfolios and strategies, this article points to the importance of more explicitly accounting for socio-economic differentiation when addressing contemporary smallholder upgrading challenges. With results however revealing how local entrepreneurs and elites complicit in regulatory evasion and illegal land encroachments play a significant role in the sub-sector, local political resistance to initiatives that aim to bring the sub-sector above board can be anticipated. This highlights how institutional building needs to be more explicitly incorporated into the design of smallholder-centric intervention strategies; through, for example, the adoption of more integrative landscape-level planning approaches.

Influence of FSC certification on the governance of the logging sector in the Congo basin

The performance of private forest governance systems, such as the standard and approach developed by the Forest Stewardship Council (FSC), is often assessed at the local level although they also have an indirect influence on public policies at the national level. Such spillover effects must be understood to assess the effectiveness of certification in contributing to improved forest governance. With this purpose, this article analyses the influences of the implementation of FSC standards on changes in forest governance in Cameroon, Congo and Gabon based on perceptions of 43 “knowledgeable” actors of FSC natural forest management. The information was collected through the use of semi-open and open interviews, and rankings. Findings show that perceived FSC influence on forest governance has followed two pathways: (a) a clear impact on stakeholder participation and timber traceability; and (b) a limited impact on improving national governance, as illustrated by the lack of global improvement in resource management practices or in biodiversity conservation. Moreover, interviewees agreed that struggles against corruption and transparency have not been impacted by the FSC certification in the Congo Basin. This mitigated influence of FSC on forest governance is first explained by a limited spillover effect of the virtuous practices of the seven FSC-certified companies on the national logging sector. Secondly, progress in FSC certification has been little taken up by public policies, which remain the main leverage for action on forest governance in producing countries.

Corporate commitments to zero deforestation: An evaluation of externality problems and implementation gaps

This research critically examines implementation gaps and externality problems associated with the recent proliferation of zero deforestation commitments (ZDC) by large commodity producers. By developing and employing a hierarchical framework, we evaluate the policies and strategies of 50 leading ZDC adopters in high forest-risk commodity sectors (soy, oil palm, cattle and wood). The analysis shows that while most ZDC adopters formulated strong ZDCs, there is significant room for further refining implementation mechanisms. Specifically, it finds that weak commitment to full transparency, notably disclosure of sourcing locations and suppliers, and to independent verification, undermines ZDCs’ transformative potential and ability to hold companies accountable for failure to comply with their ZDCs. Our analysis also reveals that most sampled companies do not explicitly account for the socially detrimental externalities that their ZDCs threaten to produce. Where this is acknowledged, it is acknowledged implicitly through standing commitments to full voluntary certification, especially in the wood and oil palm sector. As a result, issues related to free, prior and informed consent (FPIC) and protection of high conservation value (HVC) ecosystems are comparatively well addressed by adopters, but challenges faced by smallholders, food security risks, and indirect land use change issues are only minimally accounted for. Our results suggest that for ZDCs to contribute meaningfully to inclusive and sustainable development potential, complementarities between private and public regulatory initiatives need to be better leveraged.

Estimating water user demand for certification of forest watershed services

Eco-certification is one solution to the common problem of verification of delivery of services in payment for ecosystem services (PES) schemes. Certification incurs costs, which may limit uptake, so it should be able to benefit users of certified services for it succeeds. In part to inform a project targeting expansion of the Forest Stewardship Council’s forest management certification to include ecosystem services, we tested market demand for a potential certification scheme for watershed services. Using choice experiments among end-users of water subject to an existing PES scheme in Lombok, Indonesia, we assessed potential business values of certification. Our results suggested that preferred business values included credible information disclosure on improved water quality, reduced flood risk, environmental safeguards, and/or social safeguards of the upstream forests. These preferences indicate potential demand for a certification of forest watershed services designed to provide such information to end users.

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