When CSR meets plural legal order: can palm oil companies do better than public authorities by committing to zero-deforestation in Indonesia?

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Abstract

Corporate Social Responsibility (CSR) has been seen as the manifestation of corporate citizenship or the contribution of corporations as part of society. As such, the initiatives and activities within the scope of CSR are often aimed at contributing to the society’s greater good. However, little has been discussed on the significance and implications of CSR activities in the context of plural, often conflicting, legal orders.
This paper discusses a particular case when a CSR initiative overlaps with global private and national public regulations on sustainability. One of the most controversial issues in public and political debates on sustainability is the expansion of palm oil as a global commodity at the expense of forests in Indonesia. The Roundtable on Sustainable Palm Oil (RSPO) and its standard launched in 2007 is a private multi-stakeholder regulation and was the only regulatory authority at both the global and national level to set rules for sustainable palm oil in palm oil producing countries. This changed when Indonesia, being the largest producer and exporter of palm oil, launched the mandatory Indonesian Sustainable Palm Oil (ISPO) standard in 2011. Palm oil buyers generally demand compliance with the RSPO standard, while Indonesia insists that ISPO is the mandatory standard for palm oil producers in Indonesia. As a result, the regulatory system to govern sustainable palm oil in Indonesia has changed from a singular to a plural system. This plural legal order has become more diversified and complicated when in 2014 four very large palm oil companies committing themselves to zero deforestation production of palm oil through self-regulation and establishing the platform of the Indonesian Palm Oil Pledge (IPOP). Self-regulation is seen as one of the ‘new’ forms of CSR (Auld et al. 2008). The companies’ self-regulation may overlap with the requirements of the RSPO and ISPO. At the same time, their self-regulation may also conflict with the national regulation on plantations, which stipulate that concession holders cannot leave their entitlements idle and must clear the land to plant the oil palm.
We analyze the process through which the large palm oil companies promote zero-deforestation and navigate across different regulatory authorities and systems. For this purpose, we use the concept of interlegality (de Sousa-Santos 1987), that refers to interactions between different standards, norms, principles among different legal orders. We also use the concept of governance interactions (Eberlein et al. 2014) to explore whether and how interactions at the actor level can be characterized in terms of competition, cooperation, cooptation or chaos.
The paper contributes to policy debate on CSR in plural legal order by reflecting on the inception of the Indonesian Palm Oil Pledge (IPOP) and the interactions of IPOP with Indonesian public authorities, leading to the termination of IPOP. The paper concludes that good intentions of zero-deforestation and sustainability standards of private companies that are stricter than those of public authorities, are not necessarily well accepted by these authorities. On the contrary, collective organization of CSR may be considered a threat to public authorities, certainly when these authorities perceive the standards as influenced by foreign powers and not beneficial for smallholders.
Original languageEnglish
Number of pages13
Publication statusPublished - 2016
EventConference on Political Corporate Social Responsibility - CASS Business School London, London, United Kingdom
Duration: 14 Oct 201614 Oct 2016

Conference

ConferenceConference on Political Corporate Social Responsibility
CountryUnited Kingdom
CityLondon
Period14/10/1614/10/16

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