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When the State Brings Itself Back into GVC: The Case of the Indonesian Palm Oil Pledge

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  • Ahmad Dermawan
  • Otto Hospes

Abstract

During the last decades the role of the state in governance of Global Value Chains (GVC) for sustainability has been largely ignored. This paper contributes to the re‐centering the state in GVC analysis. We provide an analysis of the rise and fall of the Indonesian Palm Oil Pledge (IPOP). IPOP is a commitment of some biggest palm oil companies towards zero‐deforestation in Indonesia, but was dissolved after serious critique from the Government of Indonesia (GoI). Our question is: why and how did the GoI decide to put an end to the IPOP? We show that the GoI orchestrated the IPOP's demise by framing it as a danger to smallholder development, as not acknowledging public standards, and as an illegal cartel. The GoI's counter‐framing re‐asserts its sovereignty over producers, rule‐making and economic organization. We argue that when a state perceives that when non‐state‐driven GVC governance threatens its sovereignty over producers, rule‐making and economic organization, it will engage in discursive power struggle with non‐state actors. More specifically, collective action of non‐state actors can particularly trigger a state to engage in discursive power struggle with non‐state actors.

Suggested Citation

  • Ahmad Dermawan & Otto Hospes, 2018. "When the State Brings Itself Back into GVC: The Case of the Indonesian Palm Oil Pledge," Global Policy, London School of Economics and Political Science, vol. 9(S2), pages 21-28, October.
    • Handle: RePEc:bla:glopol:v:9:y:2018:i:s2:p:21-28
    DOI: 10.1111/1758-5899.12619
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    Cited by:

    1. Janina Grabs & Rachael D. Garrett, 2023. "Goal-Based Private Sustainability Governance and Its Paradoxes in the Indonesian Palm Oil Sector," Journal of Business Ethics, Springer, vol. 188(3), pages 467-507, December.
    2. Valentina De Marchi & Matthew Alford, 2022. "State policies and upgrading in global value chains: A systematic literature review," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 88-111, March.
    3. Janina Grabs & Sophia Louise Carodenuto, 2021. "Traders as sustainability governance actors in global food supply chains: A research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1314-1332, February.
    4. Eusebius Pantja Pramudya & Lukas Rumboko Wibowo & Fitri Nurfatriani & Iman Kasiman Nawireja & Dewi Ratna Kurniasari & Sakti Hutabarat & Yohanes Berenika Kadarusman & Ananda Oemi Iswardhani & Rukaiyah , 2022. "Incentives for Palm Oil Smallholders in Mandatory Certification in Indonesia," Land, MDPI, vol. 11(4), pages 1-28, April.
    5. Johnson, Adrienne, 2022. "The Roundtable on Sustainable Palm Oil (RSPO) and transnational hybrid governance in Ecuador’s palm oil industry," World Development, Elsevier, vol. 149(C).
    6. Dermawan, Ahmad & Hospes, Otto & Termeer, C.J.A.M., 2022. "Between zero-deforestation and zero-tolerance from the state: Navigating strategies of palm oil companies of Indonesia," Forest Policy and Economics, Elsevier, vol. 136(C).
    7. José Carlos Marques & Burkard Eberlein, 2021. "Grounding transnational business governance: A political‐strategic perspective on government responses in the Global South," Regulation & Governance, John Wiley & Sons, vol. 15(4), pages 1209-1229, October.

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