Strategies Inclusive Green Productivity for Environmental Sustainability in the Palm Oil Industry

Palm oil constitutes a vital agrarian product that is influences the economies of producing nations like Indonesia and Malaysia which together account for a substantial share of global production. However, this growth in production has been accompanied by significant environmental consequences. The expansion of palm oil plantation has contributed to large-scale deforestation, loss of biodiversity, and increased carbon emissions. Raising concerns about the sustainability of palm oil production [1, 2].

Various efforts have been made to reduce forest conversion into palm oil plantations. RSPO (Roundtable on Sustainable Palm Oil) certification enhances sustainability in the palm oil industry. Research conducted in Indonesia and Malaysia show that RSPO certification has been ineffective in preventing deforestation for palm oil cultivation but has had a positive impact in reducing the conversion rate [3-5]. Reducing the conversion rate exerts an influence on the viability of palm oil production and subsequently on Green Productivity (GP) globally. World growth in 2011 [6] reports that the Indonesian palm oil industry faces criticism from several non-governmental organizations (NGOs) who campaign against this industry. This criticism is a response to plantation expansion which is considered to be taking place quickly and massively. This growth has been attributed to deforestation, increased carbon emissions, and a decline in biodiversity [7, 8]. In accordance with this, accusations concerning the unsustainability industry of palm oil have surfaced. Pierre [5] also stated that RSPO also encourages conservation and has a beneficial influence on the climate by diminishing the pace of tropical forest conversion.

Recent studies have shown that certified production processes such as ISPO, have contributed to reduced emissions and more efficient use of land, particularly by decreasing palm oil processing on peatlands and increasing the use of sustainable technologies like biogas. However, the effectiveness of these systems in fostering widespread adoption of Green Productivity practices among farmers remains uncertain, especially in terms of their socio-economic impacts. Considering these challenges, the agricultural sector plays a significant role in Indonesia’s economic activities, contributing approximately 12.98% in 2018. The plantation subsector contributed 3.3% to the total GDP [9] These economic statistics underscore the critical importance of sustainable agricultural practices. The challenge lies in balancing economic growth with environmental stewardship.

The escalating environmental consciousness of European consumers which directs them to engage in consumption in accordance with eco-friendly principles, namely Green Chemistry, develops chemical process innovations that shift, reduce or renew traditional conventional chemical processes to be more friendly to the environment and humans without abandoning the principles of process optimization. production. The implementation of green chemistry is an important step towards sustainable development of policies and governance are crucial for food exporting nations. The association with palm oil cultivation. Indonesia addresses to eco-conscious consumers through Indonesian Sustainable Palm Oil (ISPO). ISPO serves as a regulatory mechanism and a sustainability framework to actualize the tenets of the formal articulation of sustainable palm oil development is delineated in Presidential Regulation 44 of 2020, Republic of Indonesia. To mitigate the degradation of ecological resources and the surrounding ecosystem, whatever the coconut plantation business model Palm oil is essential for implementing effective production management principles. (good governance). implementation of sustainability standards through the implementation of good production governance, is basically an effort to internalize the costs of negative externalities resulting from risks from production activities so that environmental destruction can be minimized [10, 11] Environmental problems related to palm oil businesses include deforestation, biodiversity and climate change [3, 7, 12].

ISPO regulation is a Green Productivity initiative to overcome social and ecological problems concerning palm oil in Indonesia. Indonesian palm oil has been subject to significant critique owing to its adverse socio-ecological effects, particularly concerning ecological transformation, deforestation, and extensive alterations in land cover. Concerns regarding loss of biodiversity, land appropriation, and social conflict. Agrarian territorial dynamics between corporations and traditional communities are part of the ecological and agricultural challenges associated with palm oil cultivation in Indonesia. The execution of ISPO encounters numerous intricacies, particularly within local and regional governmental authorities.

In its application, ISPO provides some advantages and risks. For consumers, ISPO will be useful in guaranteeing environmental security. ISPO enhances market credibility for producers. Nevertheless, ISPO has the risk of being financially expensive for small farmers. In the meantime, for municipal and provincial authorities, ISPO not solely formulates directives but also promotes the procedure of socialization, education and guidance, or other technical assistance which necessitates substantial expenditures. The Indonesian government's readiness to carry out the ISPO accreditation procedure encounters multi-tiered impediments. Schouten and Glasbergen in 2011 [6] articulated that there exist challenges pertinent to the elucidation of the significance of sustainable palm oil accreditation which is not cohesive among diverse strata of governance. Regionalization policies have given rise to numerous interpretations among governmental entities of various tiers.

While mitigating effort such as RSPO and ISPO certifications already implemented to overcome these environmental impacts, the effectiveness of these frameworks in fostering both Green Productivity and social inclusion remains unclear. Other studies may focus on the environmental aspects, but the integration of socio-economic factors such as farmer livelihoods, education, and access to resources into sustainable palm oil production practices has not been fully explored. The role of Green Productivity practices in enhancing both environmental and economic outcomes in the palm oil industry needs further research.

This study aims to address this gap by investigating the relationship between Green Productivity practices and social inclusion in the context of the palm oil industry in Jambi, Indonesia. Specifically, the study will analyze the socio-economic factors such as income, education, and access to land that influence farmers’ adoption of Green Productivity practices. Assess the effectiveness of ISPO along with RSPO in promoting both environmental sustainability and improved livelihoods among stakeholders. Then examine how the strategy of inclusivity can enhance the adoption of sustainable practices in terms of Green Productivity for contributing to both environmental and economic benefits.

As a result, there has been no significant enhancement in the sustainability effects of palm oil at local or regional tiers remain influenced by the evolving regulatory and policy frameworks established at the national government level. Diverse domains and levels of operational authority have resulted in miscoordination within scales of authority or function between organizations, particularly within sub-national contexts. Meanwhile, despite having extensive independence and greater authority to formulate resolutions and execute policies to the ratification of the Village Legislation, regional administration still has weak palm oil implementation and governance units. At the regional populace's subsistence tier, the circumstance remains still not advantageous. Deficiency of human capital and constrained capacity regarding technical, physical, and financial resources have resulted in small-scale agriculturalists possessing minimal prospects to address these demands, a governance occurrence that operates as sustainable palm oil governance. Furthermore, achieving better outcomes in sustainable palm oil requires attention to fundamental agronomic practices. It is crucial to consider the establishment of appropriate planting densities during the initial planting phase [13]. Improvement of palm oil using the implementation of Green Productivity will not run well without analyzing the income strategies by households involved in palm oil cultivation. The strategy can look deeper into the development of the concept of social inclusion [14] which is combined with the advancement of palm oil implementing sustainable Green Productivity so that this research finds in the literature review "green inclusive productivity" because productivity is not only in the amount of production but also in socio-economic impacts resulting from palm oil plantations.

From Table 1, the distribution of farmers by age group shows that the largest proportion of farmers are between 31-40 years (40%), followed by those in the 20-30 years age group (25%). Older farmers, those aged above 51 years, represent a smaller percentage (15%). This age distribution may influence the adoption of green practices, with younger farmers generally more adaptable to new technologies, while older farmers tend to have more traditional practices. The educational background of the farmers indicates that 45% have completed high school, while 40% have obtained a university degree. A smaller percentage, 15%, have postgraduate education.  From the data, it can be concluded that higher education might correlate with higher adoption rates of Green Productivity practices, as farmers with higher education levels may have more access to information and resources related to sustainable practices. Most farmers have 4-6 family members (50%), followed by 30% with 1-3 members. Smaller percentage (20%) have 7+ family members. The family size distribution suggests that larger households may have more labor available to implement sustainable farming practices, such as agroforestry, but it could also imply more challenges in terms of land and resource allocation. Most farmers (45%) have 6-10 years of farming experience, while 30% have more than 11 years of experience. The remaining 25% have 1-5 years of farming experience. The adoption of Green Productivity could be influenced by the length of farming experience, with more experienced farmers likely to have a deeper understanding of traditional farming methods. The rapid proliferation of oil palm plantation across Indonesia over the past decades has dramatically transformed rural landscapes, posing significant challenges to ecological systems and local community livelihoods. These transformative changes underscore the critical importance of understanding the complex interplay between agricultural expansion, environmental sustainability, and socio-economic dynamics [16]. These socio-economic characteristics should inform policy makers in the agricultural sector. For example, policies to enhance the adoption of Green Productivity practices could target younger farmers or those with lower educational levels. Additionally, policies that address the labor and resource constraints of larger households may help in scaling sustainable practices like agroforestry. In the future, farmers are expected to encourage improved farming practices and livelihood assessment [1]. The data in Table 2 provides further insights into how these factors influence the adoption rates of sustainable farming practices, economic benefits, and environmental outcomes in the palm oil. Examining the relationship will provide a better understanding of the dynamics that drive the implementation of green practices and the challenges.

From Table 2, it can be concluded that higher education correlates with higher adoption rates of Green Productivity practices. Educated farmers experience higher income increases and profitability from adopting sustainable practices. The income rise is particularly notable in those with higher educational levels. Farmers with higher education show impactful reductions in emissions and deforestation. This concise analysis highlights the key findings from the data and emphasizes how education, along with other socio-economic factors like age, family size, and experience, influence the adoption of sustainable farming practices, leading to positive economic and environmental outcomes.

This is succeeded by an examination of farmer profiles related to Green Productivity and finally, a framework is presented based on the strength of the correlation between socio-economic profiles. Palm oil plantation is Jambi will continue to grow due to the large area of secondary forest. In general, the development of palm oil agribusiness still has prospects, in terms of price prospects, exports and product development. Internally, the growth of the palm oil business is supported by the potential suitability and availability of land, productivity which can still increase and the further development of the downstream industry.

Table 3. Development of area and palm oil production in Jambi Province 2016-2021

Source: Ministry of agricultural 2021 [17]

From Table 3, the quantity of land and palm oil production has risen every year starting 2016 until 2021. Efforts are needed to maintain the expansion of land utilization and palm oil production. The land area determines the amount of production that will be produced per year, by carrying out good maintenance on oil palm plantations. The area and production of palm oil in Jambi Province in 2016 was 736,095 Ha with production of 1,910,028 tones, the area and production of palm oil in the province in 2021, namely 1,190,813 Hectare and production of 2,431,643 tones.

Table 4 shows that the development of oil palm plants in Jambi Province has increased in every district in Jambi Province. For example, Tanjung Jabung Timur Regency with the largest land area, namely 201,302 Ha, followed by Tanjung Jabung Barat Regency with total area of 166,854 Hectare and next is Muaro Jambi Regency with a land area of 2021 is 86,088 Ha. The largest Fresh Fruit Bunches (FFB) production is Tanjung Jabung Timur Regency with production 390,324 tons, Merangin Regency with production of 248,596 tons and Muaro Jambi Regency with production of 196,321 tons in 2021.

Tanjung Jabung Timur Regency has the largest area and production of oil palm, namely 201,302 hectares or around 26% of the total area and production of 390,324 tons. Tanjung Jabung Timur Regency has quite a big effect on the palm oil industry.

Table 4. Land area and production palm oil in each regency in the Province Jambi 2021

Source: Ministry of agricultural 2021 [17]

Jambi Province is situated among the foremost ten palm oil generating provinces in Indonesia regarding both expanse and yield. Palm oil plantations developed rapidly in the 1980-1990 era when there was a phenomenon of transmigration from Java to Sumatra Island where most of the population cultivated palm oil plantations as a commodity to support the family economy. Palm oil plantations in Jambi Province are operated independently or in partnership with companies. The establishment of palm oil plantations has induced significant population mobility, transforming adjacent regions into hubs of rural economic development. This condition has led to an increase in the purchasing power of rural communities, especially for routine household needs and utility needs on palm oil plantation production [18].

Palm oil smallholders in Jambi Province are economically capable in increasing people's income as seen from the growth before and after the advancement of palm oil plantations. The area of palm oil plantations in Jambi Province based on ownership is dominated by smallholder plantations, while the development of state plantations tends to be stable, but smallholder plantations tend to increase. Based on data, around 75 percent of palm oil in Jambi based on control are smallholder farmers. The expanse of individual palm oil cultivation in 2017 was more than 500 thousand hectares. This number will continue to increase by seeing the enthusiasm of the community for the palm oil plantation business [19].

The community's economic improvement continues to increase by working on plantations. Industry palm oil in Jambi province as a whole absorbs ± 1,414 people as workers, with a ratio of 75% men and 25% women. Palm oil does not yet have plasma but has guaranteed partnerships with independent farmers through the Created Share Value (CSV) program, which prioritizes the development of farmers around the plantation so that the resulting production increases and has better quality. Socially does not change women's social relations in domestic work, so that women around plantations can still work on plantations and in the domestic sector [19].

A total of 2,002 individuals constitutes the total size of palm oil smallholder. Further classification regarding family size shows that the majority are in the 5-8 range representing around 62%. Meanwhile, 79% of the full-time workforce in palm oil plantations are full-time non-family workers with an average of 2 full-time non-family workers, while the average full-time family workforce is estimated at one individual in household. The distance traveled by palm oil farmers from home to the plantation is an average of 2 km, the closest distance from the palm oil farmer's factory to the plantation is estimated to be 11 km and closest mean distance from the agricultural produce gathering location to the cultivation site is estimated to be 2 km.

Table 5. Summary of cost and revenue in palm oil productions

From Table 5, regarding total costs, comprising fixed and variable expenses, are pivotal for calculating net income, defined as total revenues with less total costs [20]. Furthermore, ending hunger does not stop at increasing productivity, but is also related to increasing incomes and strengthening markets so that people can access food when facing challenges that can hamper production [21]. Therefore, the next sub- section links the income of smallholder palm oil farmers to poverty alleviation. In this paradigm, comprehending the financial intricacies, including the comprehensive production expenses and the earnings of smallholder agriculturists, is imperative for achieving the overarching objectives of poverty reduction and food security. Given that the agricultural sector, especially palm oil cultivation, occupies a pivotal position within Indonesia’s economic framework, addressing income inequalities and improving market accessibility is essential for combating hunger and poverty. These considerations align with the United Nations Sustainable Development Goals (SDGs).

Sustainable Development comprises 17 foundational pillars that encapsulate the collective aspirations of nations and global society towards achieving a more sustainable future as a UN member state, Indonesia has officially supported the UN Sustainable Development Goals over Presidential Regulation 59 of 2017, thereby aligning with the established objectives. In the 2030 agenda for Sustainable Development aims to actualize governmental pledges toward these objectives. Presidential Regulation 59 of 2017 is one of several policy documents facilitating the UN Sustainable Development Goals complement Indonesian Law 32 of 2009 pertaining to Environmental Safety and Management, underscoring the government's commitment to sustainable development. The objective encompasses that the utilization of natural assets must be in concordance and equilibrium with the role of the ecosystem. Consequently, developmental strategies, frameworks, and initiatives are supposed to be permeated with the imperative to conserve the natural environment and achieve sustainability objectives. Secondly, Presidential Regulation 2 of 2015 addresses the National Medium Term Development Plan for 2015-2019. Indonesia Road Map towards 2030 SGS delineates a strategic planning framework outlining the stages and objectives necessary for Indonesia to realize the Sustainable Development Goals in alignment with national development aspirations from 2017 to 2030.

Indonesian Sustainable Palm Oil (ISPO) constitutes a strategic endeavor commenced by Government of Indonesia throughout the Agricultural Ministry to enhance the status of palm oil in Indonesia within the international economic landscape. The framework advances the Indonesian President's pledge to mitigate greenhouse gas emissions and address ecological challenges. The execution ISPO is anticipated to bolster the advancement of Indonesian palm oil through an array of regulations and policies, particularly concerning various facets of the Triple Bottom Line, encompassing individuals, the environment, and financial gain. The policies instituted are not solely profit-centric, but also emphasize ecological and societal dimensions. This arises from the recurrent challenges linked to the enhancement of Indonesian palm oil, particularly concerning ecological and community concerns, governed by Presidential Regulation 44 of 2020 about the Indonesian Sustainable Palm Oil Accreditation Procedure. Presidential Regulation 44 constitutes a modality of actualization of the ISPO policy by acknowledging that Indonesian palm oil estates engage a significant workforce. For this rationale, Indonesia necessitates proficient, effective, equitable, and sustainable administration of palm oil estates to bolster national economic progression and as a measure to reinforce ecologically sustainable Indonesian palm oil advancement in accordance with prevailing rules and protocols. The antiquated Sustainable Palm Oil Plantation certification procedure in Indonesia necessitates enhancement as it is no longer congruent with global advancements and legal stipulations.

The newly instituted ISPO Plantation Accreditation Procedure predicated by Presidential Regulation command perpetuates the primary objectives of ISPO, namely to a). ensure plus improve the managing and also progress of oil palm agricultural estate in accordance with ISPO standards and benchmarks; b). enhance the marketability and the competitive viability of Indonesian oil palm plantation outputs. domestically furthermore globally, c). accelerate the initiative for diminishing greenhouse gas emissions in accordance with the tenets of the Sustainable Development Goals.  This statute is directed towards entities engaged in enhancing palm oil advancement in Indonesia, encompassing palm oil cultivators, enterprises, and other pertinent stakeholders. Initiatives undertaken as a demonstration of the administration's earnestness in tackling and resolving significant issues pertaining to Indonesian palm oil comprise the subsequent: Enhancing ISPO Certification administration by facilitating avenues for involvement, responsibility, and openness. ISPO certification is presently in the enhancement phase with the promulgation of additional regulations pertaining to ISPO protocols and stipulations. This amendment is encompassed in Presidential Regulation of the Republic of Indonesia 44 of 2020 and Ministry Regulation of Agriculture 38 of 2020. These dual statutes additionally establish novel frameworks that enhance the antecedent ISPO Certification.

The ISPO authority previously exhibited deficiencies in executing its membership protocols, responsibilities, and functions. Enhancements are necessary to strengthen the ISPO Committee's reliability by activating the National Accreditation Committee (KAN) within the accreditation framework. KAN's involvement is pivotal in elevating ISPO certification standards, thereby facilitating a more autonomous process for issuing ISPO Certificates by Certification Bodies, with a focus on critical environmental issues. It is in line with the 4 variables in Green Productivity, namely social, economic and environmental. Implementing Green Productivity in palm oil has a major impact on productivity levels. This is in line with the explanation above regarding the costs that must be incurred by palm oil companies in the production process. The implementation of Green Productivity answers critical problems by enhancing initiatives to enhance the growth of palm oil, which necessitates addressing ecological concerns in addition to implementing a reliable, self-sufficient oversight framework, which will positively impact efforts to strengthen the sector.

Standardization is very important to apply both to the life and health of humans, animals and plants. Indonesian National Standards (SNI) will create standards for products or services with identical criteria for all Indonesian individuals and the global community who utilize or engage with domestic goods and services. SNI serves as the exclusive national criterion for all goods and services in Indonesia, with a standardization framework aligned with WTO ethical codes adopted as a national benchmark for palm oil operations, confirming that ISPO-compliant palm oil enterprises are economically viable, socially responsible, environmentally sustainable, and legally compliant. Therefore, if ISPO certification is implemented compulsorily and adequately, then all issues and obstacles pertaining to the execution of sustainable palm oil in Indonesia will be examined as articulated by Presidential Regulation 59 of 2017 regarding the implementation of Sustainable Development Goals (SDGs). Widespread ISPO accreditation exerts a significant positive influence on endeavors to bolster Indonesian palm oil improvement. ISPO official recognition, as delineated in Presidential Regulation of Indonesia 44 of 2020 concerning the Indonesian Sustainable Palm Oil Certification Procedure, is "Mandatory, Not Optional." This assertion is corroborated by the implementation guidelines outlined in the Indonesian Minister of Agriculture's Statute 38 of 2020, which governs the framework for ISPO authorization. Consequently, the execution of the Sustainable Development Goals regarding ISPO is achieved through the establishment of novel regulations that embrace the Sustainable Development Goals which emphasize the principle of sustainability. This statute will transition into an ISPO statute after the promulgation of Presidential Regulation 44 of 2020 pertaining to the Indonesian Sustainable Palm Oil Accreditation Framework and the regulation of Agricultural Ministry 38 of 2020 regarding the Certification of ISPO. The incorporation and execution of Sustainable Development Goals within diverse ISPO certification initiatives play a vital part in enhancing the palm advancement.

This inquiry studies the ecological and sustainability barriers connected to palm oil production, especially within Jambi, Indonesia. The results underscore the substantial environmental repercussions of palm oil cultivation, encompassing deforestation, loss of biodiversity, and heightened carbon emissions. Even with the creation of sustainability certifications like ISPO and RSPO, unfavourable outcomes continue to exist. Although these certifications have demonstrated a degree of effectiveness in enhancing land-use efficiency and curtailing emissions, they encounter significant obstacles including limited enforcement mechanisms, insufficient integration of smallholder farmers, and inconsistent application throughout the industry.

Moreover, the research delineates critical opportunities for alleviating environmental risks via Green Productivity methodologies. These methodologies encompass the advocacy for agroforestry systems, the execution of more effective land-use strategies, and the enhancement of water and waste management practices.

Even so, the investigation has its shortcomings. A notable limitation is the regional concentration on Jambi, which may not fully encapsulate the broader challenges encountered by other palm oil-producing regions within Indonesia. Additionally, while the manuscript recognizes the significance of certifications and regulations in fostering sustainability, it lacks an extensive quantitative analysis of their direct environmental impacts, particularly in the context of Jambi. This gap highlights the necessity for further empirical investigation to enhance understanding of the efficacy of these policies and practices in practical settings.

Future investigations should prioritize the execution of quantitative evaluations concerning the environmental ramifications of palm oil production, especially regarding greenhouse gas emissions, land-use alterations, and biodiversity decline across diverse regions of Indonesia. Furthermore, more comprehensive studies are required to assess the effectiveness of ISPO and RSPO certifications in mitigating environmental risks, with a specific focus on case studies that monitor progress over time. Research should also delve into Green Productivity practices at a more detailed level, identifying specific practices that can be scaled within the palm oil industry to optimize sustainability. Finally, examining the role of multi-stakeholder partnerships in surmounting barriers to sustainability and facilitating Green Productivity will be crucial in shaping forthcoming policies and industry standards.

This examination broadens the expanding knowledge base related to sustainable palm oil production and forms a stepping stone for later inquiries intended to lessen the environmental and social ramifications of the palm oil trade. By confronting the challenges and opportunities delineated, this study offers significant insights that could inform policy decisions and industry practices in the quest for a more sustainable palm oil sector in Indonesia.

Conceptualization, E.H., H.H., T.E.B.S. and R.; methodology, E.F. and H.H.; format analysis, E.H. resources, E.H.; data curation, E.H.; visualization, E.H.; writing – original draft preparation E.H., H.H., T.E.B.S. and R.; writing-review and editing E.H., H.H., T.E.B.S. and R.; visualization, E.H., supervision, H.H., T.E.B.S. and R.; project administration, E.H. All authors have read and agree to the published version of the manuscript.